Credit deflation and the reflation cycle to come (part 8)

[Alex]

2 minutes ago, Loki said:

Narco private militias? 

That was seriously my first thought, but presumably these are government assets?

[Cattle Prod]

4 hours ago, ThoughtCriminal said:

You should have a separate thread for these widow maker shares.

We could call it the "No cry baby, soy boy whinging cocksuckers allowed" thread.

I might even post some names if that was a rule 

[onlyme]

11 minutes ago, CannonFodder said:

I don't want to clutter this thread too much with war stuff but it is appearing more and more that the West is realising it won't win an armed conflict so is not even going to try. It's shit or get off the pot time, and the arms companies shares are worried about off the pot. West now needs to triple arms budgets or not even try and that's too political.

Yemen has been a disaster for Western military and China, Russia, Iran and North Korea are much tougher nuts to crack than Yemen. Yanks are now offering Houthis deals to stop attacking shipping including US warships. You shoot at a US warship and the US starts offering you concessions, you see where this is going.

https://www.google.com/amp/s/www.middleeastmonitor.com/20240404-us-may-remove-houthis-from-terror-list-if-red-sea-attacks-cease/amp/

As for Russia, latest global firepower numbers are out, and the level of armament nearly made me fall off my seat.

Let's take navy for example, left column is prior to war in Ukraine and right is latest update (now). A 176 increase in the number of naval assets is reported. I was expecting 60 new ships. Like wtf. That's the artic sown up. This is a pro-western site by the way.

China's numbers are reported as technically down, they are moving a lot of warships from their navy to their coastguard. 10,000 ton destroyers now classed as civilian cutters lol. Totally not hiding their strength.

Even North Korea is looking tasty now, US now in fourth place with ship numbers reducing due to delays in new ships not being ready as end of life occurs for existing. Military is a failing institution without the money to fix it, so war preparations may be off.

Israel is now pulling it's troops out from Gaza while Hamas is rejecting a ceasefire which won't be reported as such but is a retreat. Another nail in arms shares.

The above is not investment advice, while gov policy is it's too skint for an arms race, humanity has always chosen war in the long term.

 

Certainly one option and certainly facing humiliation as not likely to come out on top as you say. 

 

Below looks like trigger for selloff, big enough to cause one if they give their hedge fund mates the nod.

.....

Goldman Sachs said in a note released on Tuesday that European defence stock valuations now likely presented more downside than upside risk going into 2025.

"While our Portfolio Strategy team are relatively constructive on the European Defence outlook, they are not recommending EU Defense given the challenging valuation premium and recent outperformance," the note said.

[Loki]

6 minutes ago, Cattle Prod said:

I might even post some names if that was a rule 

Make it one of those private groups rather than a thread

[jamtomorrow]

19 minutes ago, Jesus Wept said:

Stupid question but…..

I don’t get how this would particularly affect RR or BAe ? 

I was thinking Iran going direct on Israel might be a "sell the news" moment for the "arms manufacturers gonna be busy" thesis

[CannonFodder]

24 minutes ago, Alex said:

Colombia?! What the fuck?

Its total number of vessels as opposed to tonnage and is influenced by

The number of small patrol vessels 

Whether a country has a civilian coastguard or dumps everything under navy military command.

Country versus country is a bit meaningless but growth in a country's ships between one year and the next can certainly be viewed as investment in military capability.

[onlyme]

17 minutes ago, Jesus Wept said:

They changed their tune in the last two weeks. 

March 21st - They had it as a “BUY” and reissued a new target of 520p.

 

One of the biggest fallers ths morning.

 

Goldman raises target for Rheinmetall to 606 euros - 'Buy'

April 09, 2024 at 07:05 am EDT

NEW YORK (dpa-AFX Broker) - The US investment bank Goldman Sachs has raised its price target for Rheinmetall from 381 to 606 euros and left its rating at "Buy". In view of the increase in government defense budgets, European defense stocks are currently trading at historically high valuations, analyst Victor Allard wrote in an industry report published on Tuesday. Looking ahead to 2025, the expert sees more downside than upside potential. Shares in companies such as Thales, Dassault, Rolls-Royce and Airbus with long-term growth themes and very predictable growth are to be preferred, he said. His estimates for Rheinmetall are above market forecasts and Allard expects a record year for orders. The valuation of Renk is now somewhat overstretched. The significantly higher price targets for MTU, BAE and Leonardo are primarily the result of the increased sector valuation./ajx/la

[Democorruptcy]

2 hours ago, Lightscribe said:

https://www.cnbc.com/amp/2024/04/09/corporate-bullying-abrdn-cio-slams-jabs-at-companys-rebranded-name.html

Really?? 

Obviously a name change to Silver <insert animal name> Asset Management is on the cards to hike up the share price 

Did the Abrdn CIO really say their name is "vowel-less"?

[ThoughtCriminal]

1 hour ago, Loki said:

Make it one of those private groups rather than a thread

How do we do that then? These new fangled concepts are beyond me.

I definitely think we should have a Widowmakers thread, and just call it that name, leaves no doubt. 

Name the share, give your reasoning and then up to everyone else to weigh in, buy it, or tell the poster he's a loon.

[Loki]

6 minutes ago, ThoughtCriminal said:

How do we do that then? These new fangled concepts are beyond me.

I definitely think we should have a Widowmakers thread, and just call it that name, leaves no doubt. 

Name the share, give your reasoning and then up to everyone else to weigh in, buy it, or tell the poster he's a loon.

 

By the time I'd double-checked there was a facility I thought I might as well just make it

People will have to let me know if it works etc

Edited April 9 by Loki

[supernaut]

3 minutes ago, ThoughtCriminal said:

How do we do that then? These new fangled concepts are beyond me.

I definitely think we should have a Widowmakers thread, and just call it that name, leaves no doubt. 

Name the share, give your reasoning and then up to everyone else to weigh in, buy it, or tell the poster he's a loon.

telegram groups work really well, similar to whats app , do not have to share any details with other folk on the group, I'm in a gambling telegram group that works well, just need someone to create the group and folk can be added to the group

[leonardratso]

Ill join your stinking club

 

Edited April 9 by leonardratso

[Loki]

4 minutes ago, leonardratso said:

Ill join your stinking club

I'm still not rich, this is bullshit

[Democorruptcy]

23 minutes ago, Loki said:

 

By the time I'd double-checked there was a facility I thought I might as well just make it

People will have to let me know if it works etc

It would be a nice gesture if you awarded the first ten members some sort of prize.

[leonardratso]

Just now, Democorruptcy said:

It would be a nice gesture if you awarded the first ten members some sort of prize.

free shares in ukog

 

[Loki]

1 minute ago, Democorruptcy said:

It would be a nice gesture if you awarded the first ten members some sort of prize.

Free Pepe JPGs?

 

[TNS]

20 minutes ago, Jesus Wept said:

2.0% rise in Pt and Pd equates to about 5-6% on Sibanye - US markets just opened. 

So basically a highly leveraged play on Ag, Pt, Pd and Au.

If you look at the 5 year chart you can see that when Ag, Pt and Pd all DOUBLED  from March 2020 Sibanye went from $5 to $20.

Ag is virtually at the highs it was in Aug 2020 after it doubled from $13 back then, today it is again around $27. Pt and Pd have a lot of catching up to do and should triple from $1000 to get back to ATH of $3000.

I did similar with Potash in MOS, SDF, Nutrien, when the price of potash increased back in 2020 ( @DurhamBorn 🍻 )  but didn’t realise how high these companies could go historically and took profits far too early 100% as opposed to 5x bagging.

It’s still early days here with Sibanye. $6 a share.

Long term SP shows it is still historically very low.

It’s the best large  $3.5bn company with potential to 3-5x bag north of $20.

Every so often an opportunity comes along - patience is the key. Taking the opportunity when it comes.
 

Would you agree with this @DurhamBorn? Any further insight. I know you are in on this one.

 

I'm a fucking idiot, mentioned it other day but forgot to buy at 4.5, what a tosser.

[belfastchild]

2 hours ago, jamtomorrow said:

Iran NOTAM?

 

Could be just a firework display for the end of Ramadan tonight... ;-)

[DurhamBorn]

18 minutes ago, Jesus Wept said:

2.0% rise in Pt and Pd equates to about 5-6% on Sibanye - US markets just opened. 

So basically a highly leveraged play on Ag, Pt, Pd and Au.

If you look at the 5 year chart you can see that when Ag, Pt and Pd all DOUBLED  from March 2020 Sibanye went from $5 to $20.

Ag is virtually at the highs it was in Aug 2020 after it doubled from $13 back then, today it is again around $27. Pt and Pd have a lot of catching up to do and should triple from $1000 to get back to ATH of $3000.

I did similar with Potash in MOS, SDF, Nutrien, when the price of potash increased back in 2020 ( @DurhamBorn 🍻 )  but didn’t realise how high these companies could go historically and took profits far too early 100% as opposed to 5x bagging.

It’s still early days here with Sibanye. $6 a share.

Long term SP shows it is still historically very low.

It’s the best large  $3.5bn company with potential to 3-5x bag north of $20.

Every so often an opportunity comes along - patience is the key. Taking the opportunity when it comes.
 

Would you agree with this @DurhamBorn? Any further insight. I know you are in on this one.

 

I said a month ago i thought the 2nd big capital making moment of the cycle was upon the thread and that proved very timely.Now we could see big pullbacks,even declines below our buying prices yet,but given the structure of where we are in the cycle id rather risk losing these quick profits than leaving a very big trade with 50% in a month and losing the inflation hedge.99% of portfolios have zero to tiny inflation hedges.IF capital wakes up to the fact this inflation is not going away without a massive financial crash then this is just the start.

I should add the risk of a BK is also getting bigger with these PM increases.People have a bit of a laugh on here about David Hunter,but he is one of a handful of macro strategists left from the team at Fidelity,the best macro team the world has ever seen.

We need to see how this PM rally develops,but be open to selling into it later and into treasuries maybe.

For now the market might try to shake weak hands out of the sector,then go parabolic,im holding for now to see how it develops.

[Eventually Right]

2 minutes ago, DurhamBorn said:

 

I should add the risk of a BK is also getting bigger with these PM increases.People have a bit of a laugh on here about David Hunter,but he is one of a handful of macro strategists left from the team at Fidelity,the best macro team the world has ever seen.

We need to see how this PM rally develops,but be open to selling into it later and into treasuries maybe.

For now the market might try to shake weak hands out of the sector,then go parabolic,im holding for now to see how it develops.

I'm definitely thinking of buying some out OOTM 2026 calls on TLT and UUP (dollar etf) as insurance in the next couple of months.  It wouldn't surprise me at all if he's right on those getting a massive flight-to-safety bid if we do have a BK.

[Pip321]

6 hours ago, Yellow_Reduced_Sticker said:

paging @MrXxxx

anyone moving in @Pip321 ?...hoping for 'em to do what 'NEXT' did back in the 90's

 

 

Nope….Superdry may fly but happy watching. Too many risks. I did my risk taking with a mini punt on Evraz…..happy to stick at that. 😉

I Need to step up and buy back into commods but I don’t want to then hit a dip…

Happy with my Blackrock gold, Fres and GJGB but not nearly in deep enough….waiting to buy on any pull back. TBF if they keep going up I am holding on…regardless. If they dip back I am buying more. 

[CannonFodder]

31 minutes ago, DurhamBorn said:

I said a month ago i thought the 2nd big capital making moment of the cycle was upon the thread and that proved very timely.Now we could see big pullbacks,even declines below our buying prices yet,but given the structure of where we are in the cycle id rather risk losing these quick profits than leaving a very big trade with 50% in a month and losing the inflation hedge.99% of portfolios have zero to tiny inflation hedges.IF capital wakes up to the fact this inflation is not going away without a massive financial crash then this is just the start.

I should add the risk of a BK is also getting bigger with these PM increases.People have a bit of a laugh on here about David Hunter,but he is one of a handful of macro strategists left from the team at Fidelity,the best macro team the world has ever seen.

We need to see how this PM rally develops,but be open to selling into it later and into treasuries maybe.

For now the market might try to shake weak hands out of the sector,then go parabolic,im holding for now to see how it develops.

Could you please explain to me like i am a small child or a Labrador why high PMs could result in a BK?

Honest question, is it due to liquidity moving into the PM market which is overall quite small relative to equities.

And also is this likely before the US Nov election. I know a hard question.

[Noallegiance]

30 minutes ago, DurhamBorn said:

I said a month ago i thought the 2nd big capital making moment of the cycle was upon the thread and that proved very timely.Now we could see big pullbacks,even declines below our buying prices yet,but given the structure of where we are in the cycle id rather risk losing these quick profits than leaving a very big trade with 50% in a month and losing the inflation hedge.99% of portfolios have zero to tiny inflation hedges.IF capital wakes up to the fact this inflation is not going away without a massive financial crash then this is just the start.

I should add the risk of a BK is also getting bigger with these PM increases.People have a bit of a laugh on here about David Hunter,but he is one of a handful of macro strategists left from the team at Fidelity,the best macro team the world has ever seen.

We need to see how this PM rally develops,but be open to selling into it later and into treasuries maybe.

For now the market might try to shake weak hands out of the sector,then go parabolic,im holding for now to see how it develops.

I've been sold on Hunter for a long time.

He's consistent, intelligent, experienced and nuanced.

I'm aiming for a gradual mid hockey stick exit this year to sit in cash while the financial world burns, then I'm all in divi paying commodities and EMs.

Having talked about this now-unfolding event for so long I feel both excited and a little nauseous.

[Funn3r]

10 minutes ago, Noallegiance said:

Having talked about this now-unfolding event for so long I feel both excited and a little nauseous.

We all get excited about rare events but don't forget to protect yourself. Here are some safe and effective special glasses you can wear to watch the BK in safety

[DurhamBorn]

40 minutes ago, CannonFodder said:

Could you please explain to me like i am a small child or a Labrador why high PMs could result in a BK?

Honest question, is it due to liquidity moving into the PM market which is overall quite small relative to equities.

And also is this likely before the US Nov election. I know a hard question.

More because the roadmap signals PMs would rise as the CBs lost control of liquidity v inflation.The Fed has nearly emptied the Reverse Repo,that means they have got the liquidity into the system,and now they want to start a private sector credit cycle by cutting rates.The solvency of the US and West depends on that,but inflation is moving up again when at this part of most cycles it should be becalmed.This thread explains why,but in simple terms that liquidity is going out of the country to buy things to consume.The Fed needs to cut rates hard into inflation.If they stall,as they might,they will ensure a BK,if they cut they might just avoid a BK,but a very difficult inflation cycle.Im not sold yet on how a BK looks.It could be more a fall,then grind lower in any investments that cannot inflation price.

The state is consuming too much through its proxies.The only way to cut inflation now is a huge crash,a huge cut in the state,or accept higher inflation,but invest in production.