Credit deflation and the reflation cycle to come (part 7)

[Alifelessbinary]

43 minutes ago, ashestoashes said:

yes, some real losers suggested on these threads, cna, vod, abdn, 1&1, wood group even bat, guess should stick to what you know

The strange thing about losers, as they can turn round. CNA is now one of my top performing shares, I started investing in them in 2018 after they dropped to 1999 values. It was extremely difficult investing in a falling knife but managed to grab a lot at the bottom and now very happy to hold them for the next 10 years.

The main ting I've learnt is while I'm alright at buying shares I'm terrible at selling them. My Sibanye SBSW shares pretty much 4 bagged, but I'm a real fan of a long term hold and have now watched them slowly decent back to their original price. There's quite a few sectors that are now are now showing value, I might just adopt a spray and approach.

I hate having to be an active investor, as after my job I have limited free time, but many of the veterans on here are correct that in this market you can't rely on the indexes to do all the heavy lifting. 

 

[Frank Hovis]

32 minutes ago, Harley said:

I can't say it enough.....

RISK!

Apples and oranges!  Different risk profiles.  BATS is simply more risky overall.  Both as an equity asset class and as a company.  You need to compare risk adjusted returns using reasonable individual risk scores.

By all means include in a portfolio but at an overall weighted adjusted risk that is appropriate for you. 

One you ain't going to cry about.  For example, a capital preserver may cry about an irretrievable loss while an accumulator may cry about the loss as an opportunity (capital gain or compounding).

PS:  "You" = IMO everyone!

 

Yup, I have a dividend portfolio which certainly includes BAT.

But i have other profolios with different purposes.

[Jay]

8 hours ago, Eventually Right said:

Presumably he said this several years ago?  
 

I’m sure he’s right on 99% of cryptos, I’d question Bitcoin itself though. The longer it survives, has ETFs launched for it etc, the harder I think it becomes to ban too many ‘regular’ people holding it in retirement accounts etc-becomes politically toxic.

of course, always a chance the PTB declares Hamas was funded by Bitcoin, and there’s an international ban on it in the west…but I think they’re running out of time if there’s a plan to ban it.

A ban would be nice though-send those degenerate speculators back to where they belong…precious metals 

I would love the banning of bitcoin in the west..the us tried with gold in the 30s..I also believe the biggest holders of bitcoin are in the west..the price would go parabolic..

countries have already tried it and failed to ban crypto…bans create opportunities for innovation as the prohibition showed…I fear state nationalism of industries and restrictions of freedom than any crypto ban..

just to add I don’t think gold is going offer the returns in the future that it has offered over the last 20 years..neither will bitcoin..be lucky..

[desertorchid]

31 minutes ago, Alifelessbinary said:

The strange thing about losers, as they can turn round. CNA is now one of my top performing shares, I started investing in them in 2018 after they dropped to 1999 values. It was extremely difficult investing in a falling knife but managed to grab a lot at the bottom and now very happy to hold them for the next 10 years.

The main ting I've learnt is while I'm alright at buying shares I'm terrible at selling them. My Sibanye SBSW shares pretty much 4 bagged, but I'm a real fan of a long term hold and have now watched them slowly decent back to their original price. There's quite a few sectors that are now are now showing value, I might just adopt a spray and approach.

I hate having to be an active investor, as after my job I have limited free time, but many of the veterans on here are correct that in this market you can't rely on the indexes to do all the heavy lifting. 

 

I think you must have bought the CNA shares off me

Can I have them back please?

[Jay]

1 hour ago, ThoughtCriminal said:

I know you keeping caveating it by saying the Titanic (UK) will eventually change course and avoid the iceberg, but I keep wondering, there's has to be a point of no return surely? We can't just keep heading towards the metaphorical iceberg forever.

Maybe it is that we are old or different generations…just finished reading howes fourth turning…next generation want structure, community and collectivism imo..we as the generation of old don’t want it as we never had it and can’t see it working..

he talks specifically about the usa but it is clear we are heading in that direction, for example multi generational living, diversity and inclusion, state doctrine etc etc..not my cup of tea but maybe the young uns/bairns are craving it..he talks about cycles which I kind of agree..a brave new world where dinosaurs such as myself face extinction..still I got my day in the sun..there’s always Jurassic Park for me..so am hopeful that there is a future for my sort..I am beginning to see rays of light partly because of the views offered in this thread and will be able to deal well with this turning..even the titanic had survivors..be lucky..

[JMD]

3 hours ago, jamtomorrow said:

Thermodynamically, what matters is the total amount of energy and how that energy is organised - the energy-information, if you like.

Thermodynamically speaking, a diesel engine is as much a processor of energy-information as a computer.

And, (coincidentally? or maybe not - the "hidden hand" of the thread?) I see Bitcoin is bubbling up again as a discussion topic, which is interesting because Bitcoin still uses proof-of-work to secure the blockchain, and is therefore subject quite directly to such thermodynamic considerations.

Here's a thought experiment (and I don't know the answer - yet). At today's difficulty and typical ASIC perf-per-watt, how much energy would it take to recompute all the mining hashes in the Bitcoin blockchain? In other words, how much energy is - effectively - now tied up in the Bitcoin blockchain?

Edit to add: found some useful recent numbers here https://ezblockchain.net/article/self-mining-vs-bitcoin-mining-hosting-service/

266Mwh per block

Times 813352 (current block height)

Gives ~ 216TWh, which is about 8 months of UK electricity generation.

It's also interesting that over half, and increasing, of BTC mining is powered by renewable/stranded(eg otherwise wasted gas flaring) energy.

https://cointelegraph.com/news/bitcoin-clean-energy-usage-exceeds-50-percent-tesla-accepting-btc-payments

 

[Jay]

9 hours ago, Pip321 said:

@SpectrumFXhas it amusingly more accurate……

Energy absolutely cannot be created or destroyed, that’s physics.

However, it can effectively be ‘wasted’ because it isn’t kept in an isolated system…..eg a pendulum wastes its kinetic and potential energy in its swing by dispersing a small amount of heat energy the pendulum hinge emits each swing. That heat isn’t lost but dispersed into the air but is effectively then useless. 

Physics can be fascinating……but not least how anyone could be bothered to spend the time to conceptualise these things through and then conduct experiments to illustrate them. I bet they were fun down the pub explaining their Shinto everyone 😂😂

Not sure about that…bloke called Newton..did a bit physics and wrote about gravity..he made money and sold out and got greedy and bought and lost it in the south sea bubble..what goes up…he was also in charge of the royal mint..probably could a few good tales about coin clipping, how he lost it all..I would buy him a drink to hear such tales..not confident I wouldn’t laugh at him when he finished..

[Joxer]

1 hour ago, ashestoashes said:

yes, some real losers suggested on these threads, cna, vod, abdn, 1&1, wood group even bat, guess should stick to what you know

Don't forget Henderson Far East Asian Income and SEDY

[Harley]

1 hour ago, Jay said:

just to add I don’t think gold is going offer the returns in the future that it has offered over the last 20 years..neither will bitcoin..

You can't just say that!!!!! You, and all the rest who do this need to say why!

Edited October 25, 2023 by Harley

[NogintheNog]

16 hours ago, Red Debt Redemption said:

Planets not maxed out now or you wouldn't be able to increase it any further at the this current moment in time

Okay, I've not worded that correctly! What I should have said was the Planets nearly maxed out.

Good luck getting that extra 25% of population growth without huge energy availability growth.

[Harley]

35 minutes ago, Joxer said:

Don't forget Henderson Far East Asian Income and SEDY

I warned ya'll - income out of returned capital!  That said, we bought SEDY when it seemed to have bottomed out (never say never in this game!.  We're down about 4% atm.  We sold down recently to our minimum model holding size (2%).  We would normally be 10% max, 5% if the weekly or monthly is signalling a negative, 2% if both are or the macro just seems particularly dark.  It's all about the macro for us atm so asset allocation, etc.

Edited October 25, 2023 by Harley

[Harley]

1 hour ago, Alifelessbinary said:

I hate having to be an active investor, as after my job I have limited free time, but many of the veterans on here are correct that in this market you can't rely on the indexes to do all the heavy lifting. 

You can achieve a lot with little time (Paretoesque) if you get the right level (not total index, not individual stock, so say regional and/or sector/trend) and have the "right" signalling approach (if you can stick to it).  For the later, you could sign up to a service (a seemingly good one was listed here a while back).  If DIY, I strongly suggest learning Heikin Ashi candles for the weekly and/or monthly data if you just want to ride trends without too much timing precision (precision takes time and effort and even then takes you only so far, the rest being an illusion where more <> better).  I can suggest a few HA formations to consider watching out for, once you understand the basics.

Edited October 25, 2023 by Harley

[NogintheNog]

15 hours ago, Stuey said:

Some people have forgotten that energy can't be destroyed. 

You are of course correct @Stuey

Unless we can live in a vacuum everything we do results in energy losses to 'disorganised energy'.

A car travels down the highway. It's mechanical engine uses the stored energy in petrol, diesel or even god forbid a battery to propel the vehicle via chemical combustion. (With the EV the combustion took place at the gas fired power station).

Much of that energy is lost not in the propulsion process but in noise, heat, and light in the combustion.

Ultimately it ends up as heat that dissipates into the atmosphere heating it up. The planet radiates much of the energy back into space where it is very cold!

So @Stuey can you tell us how we get that 'disorganised energy' of heat in the atmosphere back. I'm assuming that's the point you were making?

[Harley]

Government bonds looking intermediate weak so are continuing to follow equity!  Only one we are interested in atm is more indexed linked (which we always have, well before Lyn mentioned them!).  Note Indexers apparently tend to do better with low inflation!  Whatever we just follow the techs.  Amazing the narratives on rates, etc is still driving things rather than broadly building geo and domestic political tensions.  Could see a rubber band if the old relationship re-asserts itself, even if only for a while.  It's a bit of a classic setup (herd disconnect and a come to Jesus moment).  Some funds/asset managers are going to need it as they have lost a lot of their profits from the 2020 run since going long long dated USTs, etc. 

We're down 20% on a legacy IBTL holding.  We smelt the coffee and bugged out a while back and would be down massively more if we hadn't.  We moved to VUTY for our UST core holding which had a broader time spread and better yield.  That's been OK (up 1% ex yield) but weakening on the weekly (better still on the monthly).  A fair hold for us given the macro tensions, plus a needed currency hedge.

Edited October 25, 2023 by Harley

[Libspero]

38 minutes ago, Joxer said:

Don't forget Henderson Far East Asian Income and SEDY

HBRL was mentioned at the same time IIRC.   That has faired slightly better.  10% ish divi and up about 10% since then.  It would probably average out if you bought both.

[NogintheNog]

3 hours ago, Lightscribe said:

But in particular with BTC they don’t even have to ban/confiscate etc. If US ETF is approved it can just manipulate the paper price (and in turn the rest of regulated crypto) just like they do with gold and silver. It has been/will be allowed (and possibly created in the first place) for controllability otherwise they would have stamped it out years ago. 

One of the problems with Gold and Silver is people don't want to have the risk of the physical storage. Throughout history Decentralized Bearer Assets such as Gold and Silver have been stolen in heist after heist!

But I'd like someone to explain to me why you would hold a paper Bitcoin ETF when you can just hold Bitcoin?

[Democorruptcy]

This is a classic, sums up the UK beautifully. BUPA doctors want 20% pay rises because the expensive private sector, is now the less well off cousin of the NHS.

https://www.ft.com/content/0c15b7d8-fd19-4180-aea4-8d571e43969a

The rebellion underscores the complex nature of Britain’s healthcare system where consultants employed by the NHS can also choose to work in their spare time at private hospitals such as those run by Spire, HCA International or Circle Health Group, with the fees paid for by patients, the NHS or insurers. 

Insurers traditionally held a powerful position as they brought by far the largest volume of cases to private consultants and hospitals.

This has been shifting as the number of self-pay and NHS-funded patients increased, said Michelle Tempest, analyst at healthcare consultancy Candesic. “The [private medical insurance] sector is beginning to look like the less well-off cousin,” she added.

[Lightscribe]

2 hours ago, ashestoashes said:

yes, some real losers suggested on these threads, cna, vod, abdn, 1&1, wood group even bat, guess should stick to what you know

It was all personal choice and circumstances.
 

I never bought in to some of the suggested on here as I didn’t fancy the outlook for them.

Card Factory

Centrica

US regional banks (or any banks)

Asset managers; Jupiter, ABDN (was looking at my first trigger pull the other week but didn’t go through with it), 1&1, Wood Group.

Some I sold and took profits way too early

Mosaic/Nitrogen/K+S

Some I sold and took profits but wish I held 

XOM/Repsol/Shell/BP

Guinness global energy fund

BAE systems 

Some I did but have taken profits and sold and was glad I did.

BT

Polymetal

Eqitrans Midstream

Royal Mail.

Rolls Royce (I was one of the first on the thread to put this one forward - took the share split etc)

BATS - I bought early and sold out last year for profits (I’ve always mentioned my trades on here) and then have recently bought back in at the 2400-500 zone (as I mentioned on here several times that I would)

Brazilian equities (rose quickly and took profits but will rebuy) BRF, Braskem 

Losses (but not losses until they are crystallized)

StageCoach - got bought out. Unlucky, but didn’t really gain or lose, an example of the right sector but wrong point in the cycle.

Vodafone - loss so far out of the above mentioned stocks (about 12% down) as I’ve averaged down in ladders.

Gold/Silver miners - I’ve mentioned several times when I’ve bought and sold, and Harmony’s been my best performer. Sibanye my worst. 

So all in all I’ve done better for myself than a lot of fund managers would and once tech/FAANGs go, the losses will be immense.

 

 

Edited October 25, 2023 by Lightscribe

[ashestoashes]

2 hours ago, DurhamBorn said:

Mosaic made double the losses on all those put together.So did DRAX,and many many more.Many are up on Centrica,i made profits on ABRDN,iv added 54% to net worth in 3 years while most pensions have seen big losses.This game is hard.Im glad some things are down because my next big uplit to family wealth will come from some of them.VOD has been a real let down no question,there will be may more.

the initial idea was these were long term holds, but in fact it's been quite an active trading approach, so if you don't keep up with the thread then exit points and warnings can be missed.

As can be seen from your reply your ego is a bit wrapped up in these stock picks which takes away from objectivity a bit.

[Jay]

40 minutes ago, Harley said:

You can't just say that!!!!! You, and all the rest who do this need to say why!

There was a timeframe given..measuring the returns is dependent on your measuring tools..bitcoin is easy as from basically zero to 30k..gold basically up 5 times..I don’t think gold goes 5 times from here..why should it..inflation hedge, store of value, currency change, conflict…got those already so some priced…could I be wrong, of course but I could right..so to be right I need to be lucky..

[JMD]

10 hours ago, Eventually Right said:

Presumably he said this several years ago?  
 

I’m sure he’s right on 99% of cryptos, I’d question Bitcoin itself though. The longer it survives, has ETFs launched for it etc, the harder I think it becomes to ban too many ‘regular’ people holding it in retirement accounts etc-becomes politically toxic.

of course, always a chance the PTB declares Hamas was funded by Bitcoin, and there’s an international ban on it in the west…but I think they’re running out of time if there’s a plan to ban it.

A ban would be nice though-send those degenerate speculators back to where they belong…precious metals 

I also don't think BTC will be banned. After all it's traceable Blockchain ledger is far too useful to TPTB. 

I know the topic splits opinion on the thread. But FWIW hold BTC for several different reasons, monetary reset hedge, potential technology play, etc. One interesting tech play investment case - written about by Lyn Alden - is the potential for the Blockchain and 2nd/3rd layer crypto coin infrastructure to support future internet crypto micro payments, where such payment costs would in effect be used to validate and secure internet use by attaching a fractional cost to all comms, transactions, etc. Apparently could be used to prevent future dangers of AI in regard to self generating programmes etc. But this is really only expanding on the idea/methodology already implemented in denial-of-service hashing software used today in preventing spam attacks.

I think the main point here is that proven and easily implemented tech like BTC will be increasingly required (and it's why I think $1M Bitcoin forecasts are not outrageous, after all that would only be 1cent/Satoshi !!). But do accept at same time it could/will be easily exploited by government... Yes the technology is worryingly about control (isn't everything these days?). However as @Harleysaid in a recent post, although he won't have sugar poison in the house, he would still entertain buying shares in the sugar producers! 

Edited October 25, 2023 by JMD

[Lightscribe]

24 minutes ago, NogintheNog said:

One of the problems with Gold and Silver is people don't want to have the risk of the physical storage. Throughout history Decentralized Bearer Assets such as Gold and Silver have been stolen in heist after heist!

But I'd like someone to explain to me why you would hold a paper Bitcoin ETF when you can just hold Bitcoin?

The thesis is that BTC will explode higher, as it will be ‘viewed’ as a legitimate asset.

A regulated approved ETF will can then be fractioned off into mainstream funds, and boomers (who don’t know how to buy or set up wallets) can buy via their regular broker. 

Basically widening the range of access into the older generations (where all the stored wealth is) will send BTC on a bull run.

[Axeman123]

3 hours ago, Lightscribe said:

But in particular with BTC they don’t even have to ban/confiscate etc.

Could be as simple as requiring it to be held by a registered intermediary and all transactions reported, all self-custodied BTC becomes tainted after a certain date. While a segregated shadow economy for "dark" BTC would persist the permanent ledger feature would create two distinct BTCs, with no way to launder or rehabilitate the dark stuff. Think of having a million in fiat notes in a suitcase under your bed and how limited the opportunities to actually use it would be as an example. It would seem innevitable that an exchange rate differential would arise, with dark BTC trading at a discount.

Assuming the majority of BTC would end up held in a compliant manner (even 51% AIUI would work) then a fork of the blockchain could potentially invalidate all non-compliant BTCs. It would be an easy sell on the basis that most BTC has been stolen or used on the silk road to buy drugs etc at some point and a permanent record of this exists. The offer might be: Regularise your BTC with proof of legitimate funds for initial purchase and sort out any tax implications then all sins will be wiped, anyone that doesn't has conceeded guilt forfeiting the BTC. The constant push for proof of stake over proof of work would also advance this agenda if it suceeded, since Blackrock would end up holding an awful lot of it as ETF custodians etc giving them the voting rights (bit vague on the intricacies of POS tbf) much like with equity ETFs. I am sure Blackrock would also lobby to be able to buy large BTC holdings from approved individuals no questions asked, enabling them to launder grey BTC for politically connected people at a discount to spot.

3 hours ago, ThoughtCriminal said:

I just keep thinking of that Big Short moment where he says it's time to call bullshit and he's asks him on what: "Everything".

Now I'm not say that NOW is that moment, I'm not omniscient, but everything just feels artificial, like it's one rug-pull away from crashing down.

I am leaning towards the idea that we haven't had the surreal manic rally that makes no sense yet. 

[Loki]

If we get BTC futures it becomes just another spot price in the long list of manipulated spot prices

[Noallegiance]

39 minutes ago, Democorruptcy said:

This is a classic, sums up the UK beautifully. BUPA doctors want 20% pay rises because the expensive private sector, is now the less well off cousin of the NHS.

https://www.ft.com/content/0c15b7d8-fd19-4180-aea4-8d571e43969a

The rebellion underscores the complex nature of Britain’s healthcare system where consultants employed by the NHS can also choose to work in their spare time at private hospitals such as those run by Spire, HCA International or Circle Health Group, with the fees paid for by patients, the NHS or insurers. 

Insurers traditionally held a powerful position as they brought by far the largest volume of cases to private consultants and hospitals.

This has been shifting as the number of self-pay and NHS-funded patients increased, said Michelle Tempest, analyst at healthcare consultancy Candesic. “The [private medical insurance] sector is beginning to look like the less well-off cousin,” she added.

They need the extra pay so they can afford to be taxed to pay for their NHS counterparts.