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

[Harley]

10 minutes ago, wherebee said:

how does a ETF based on oilies pay no dividends?  Surely that doesn't make any sense - if it has underlying holdings in oilies, the fund will be caning it in?  Where does that money go?

Accumulation versus Distribution fund.  You often get both versions. Good for tax planning (CGT v income tax), etc.  I like to compare them to see which did better over say five years.  Usually the same when looking at total returns.  I usually prefer accumulation as it puts everything on a comparable basis.

Edited February 12 by Harley

[wherebee]

4 minutes ago, Bobthebuilder said:

2008 was much the same.

I was in Australia for 2008 and it washed by without a ripple; the Aussie gvt (Labor) was cashed up due to a couple of terms of a right wing gvt saving loads of money, so when the GFC hit the Labor gvt under Rudd could drop billions in an effort to keep the plates spinning.  They also declared an unlimited guarantee for bank deposits (unlike the UK under Brown LOL) which mean investors piled into Aussie banks.

They gave every aussie a cash windfall - couple of grand, I think.  I heard that prostitutes and drug dealers did very well that month.

It worked though - no collapse in house prices, no collapse in confidence.  It taught the right wingers here a key lesson - don't bother being prudent on money, because the next Labor gvt will spend it all on shits and giggles and take all the credit.

Back then I was massively uninformed on finances, plus going through a nasty divorce, which meant I hardly noticed the GFC.  Missed opportunity.

[Bobthebuilder]

11 minutes ago, wherebee said:

Missed opportunity.

I had everything in Jupiter funds back then, so did not do well on any individual shares, did get a cheap house in London tho which was the best result for me.

2020 was much easier because the hive mind on this thread was really focused, and that worked really well.

[Harley]

I've been waiting for a confirmed buy signal in NEM (decent div plus potential sector upside) but what's up with this dire cash flow statement (e.g. -369m Net Income (cash flow) and all the rest that flows from it such as the (massively not) dividend cover)?

[marceau]

1 hour ago, Axeman123 said:

Interesting you mention 3x long etfs, as I have been pondering the commodity versions for if we see anything like the 2020 "negative" oil price in the BK. The trade off there will be whether the etfs and options contracts underpinning them have a counterparty blow up somewhere. Certainly not somewhere for large % of holdings.

May the odds be ever in your favour!

When oil went below zero the risk on leveraged ETFs went through the roof. Nobody really knew what they were holding. In the end they made out like bandits, but the rules, calcs and counterparties could have easily gone the other way. USO even had to do an emergency T&C change to push out duration, if they hadn't they would have gone pop.

It's always easy with hindsight. But in a unique situation like that I'd go for options on the majors, rather than risk some technicality wiping me out on a dodgy ETF (something like LOIL is a dodgy ETF imo).

[marceau]

49 minutes ago, wherebee said:

how does a ETF based on oilies pay no dividends?  Surely that doesn't make any sense - if it has underlying holdings in oilies, the fund will be caning it in?  Where does that money go?

Some of them just track indices of the underlying, no holdings involved. Stuff like LOIL constantly loses value even if the oil price is unchanged, due to rollover costs. 

You really have to understand what you're holding in ETF land.

[sancho panza]

4 hours ago, DurhamBorn said:

Pensions are sleepwalking into disaster "de-risking" because the very things they now own are more likely to go down the most.SEDY is far less risky than a UK gilt for instance and double the yield.

I think thats a fair point.I think theres huge risk in UK fixed income

It's funny you're tlaking EM's today but Ive been running my slide rule over some stocks today as I have proceeds to invest

Question for you tho DB,do you think these funds(HFEL/IBZL) near 30% exposure to finacials is an issue?no pressure.

TEI invests in fixed income andhas been around since 1993.Some of the board have been in a logn time.I like these set ups.Long term boards like that are generaly a good sign imho as theyve seen a cycle or two.its our only fixed income asset.

Decl long TEI 1.5% at $4.50,IBZL 1% at £17

 

 

IBZL we got first ladder at £17.I may ladder in again and bring our average to £19

https://www.ishares.com/uk/professional/en/products/251853/ishares-msci-brazil-ucits-etf-inc-fund?switchLocale=y&siteEntryPassthrough=true

 

https://www.janushenderson.com/en-gb/investor/product/henderson-far-east-income-limited/

Edited February 12 by sancho panza

[Lightscribe]

In County Durham, wasn’t you there today DB to give him a quick one-two on the nose for the rest of the UK?

Edited February 12 by Lightscribe

[Transistor Man]

4 hours ago, Cattle Prod said:

Yeah I'm loving the bearish sentiment,

 

Opinion Lex

JANUARY 30 2024

 

Add to myFT

The days of $100 oil prices are over

Oil will be part of our lives for decades to come. But its value to the consumer has already topped out.

Edited February 12 by Transistor Man

[leonardratso]

 

 

Watch this rollover and decay to 2pence now, hahahaha, its at that point that i will slap myself on the back for only pissing away 1 whole great british pound.

Edited February 12 by leonardratso

[Harley]

Our daily etf screen has thrown up BA these last few days.  About 6 today when we'd normally get 20 to 30.  All have been there a while so have already run and are now in our weekly screens.  Like commodities (in USD though), China, battery tech, ags.  Seems to be getting tired and old with no new blood.  Thin on the ground for potential value stocks too if you exclude HK.

Edited February 12 by Harley

[Loki]

15 minutes ago, Transistor Man said:

ts value to the consumer has already topped out.

What are they proposing consumers consume without it

[leonardratso]

7 minutes ago, Loki said:

What are they proposing consumers consume without it

lectric

[sancho panza]

4 hours ago, Noallegiance said:

Can anyone explain what happens to currency already outside of a jurisdiction during currency controls? Can it return? Is it just a one-way street?

You can take moeny back in but harder to get it our voer certain sums.SA has soem form of currency controls accoring to Mrs P.Ideally you need your capital out before they come in.teh situation normally deteriorates thereafter

1 hour ago, Harley said:

I've been waiting for a confirmed buy signal in NEM (decent div plus potential sector upside) but what's up with this dire cash flow statement (e.g. -369m Net Income (cash flow) and all the rest that flows from it such as the (massively not) dividend cover)?

tahts only up to year end 22 but they use confusing (imho ) temrinology in that graph.marketwatch is better at this

these figures weill be amssively out now as NEM have consumed Newcrest.

Im a big fan at tehse levels and IKN was saying the other week about a shut dpwn of a NEwcrest mine that it showed NEM had good standards.maybe it was @kibuc

K if you're watching have you got a take on NEM here.? no pressure if you haevnt.I'm a big fan.it looks good value.

decl:we're long 5% at $46 iirc but genuinely contrmeplating buying more.

https://www.marketwatch.com/investing/stock/nem/financials/cash-flow

 

Edited February 12 by sancho panza

[Cattle Prod]

2 hours ago, Loki said:

I don't know what I wasn't thinking but I can't believe I didn't buy oil CFDs when it was $5 never mind $0

I was trying to (with options) but the spreads were blown out wide and very volatile. The big boys control things when it's like that, very very hard to get in.

[Loki]

1 minute ago, leonardratso said:

lectric

wot lectric

[leonardratso]

1 minute ago, Loki said:

wot lectric

magic lectric, that stuff that comes out of next doors shed thru a wire for free.

[Democorruptcy]

40 minutes ago, sancho panza said:

Question for you tho DB,do you think these funds(HFEL/IBZL) near 30% exposure to finacials is an issue?no pressure.

I'm sure when HFEL was first put up I mentioned it's financials i.e. Chinese Banks. The search function on here doesn't seem to work properly now, is the older stuff archived? It must have been July 21, -34% since then.

[Errol]

2 hours ago, Funn3r said:

Oil seems stupidly and artificially low to me.  Thanks to US election year. I've got some BP but what do you buy if you think the oil price will rapidly increase at some point?

WENS?

[leonardratso]

6 minutes ago, Democorruptcy said:

I'm sure when HFEL was first put up I mentioned it's financials i.e. Chinese Banks. The search function on here doesn't seem to work properly now, is the older stuff archived? It must have been July 21, -34% since then.

think spunko has disabled it along with the reps system cos it fookd the machine.

[wherebee]

4 hours ago, Noallegiance said:

Can anyone explain what happens to currency already outside of a jurisdiction during currency controls? Can it return? Is it just a one-way street?

currency/capital  controls are coming for many countries.  People forget - especially normies under 40 - that many western countries had capital controls until the 70's or later; Australia only got rid of capital controls in the 1980's!  

Having spoken to many south africans who have had experience of the ongoing capital controls linked to south africa, the lessons seem to be:

- SOFT and HARD controls exist.  HARD controls say you can't move X by Y route.  SOFT controls mean that even when it is permitted, the authorities slow things down, refuse to issue permits until asked 50 times, demand bribes, apply administration fees, etc etc.  Knowing the right people means the SOFT controls are less

- moving sooner rather than later is almost always the best call if you are getting money out of a country going down the shitter (like the UK).  I've had different SA emigrants tell me that they waited and waited to move money out, hoping for better rates/less costs, and they always got screwed over more the longer they waited.  This seems doubly true for things like property, where in some cases people sold up at the last minute and then couldn't get the money out for a long time after they emigrated, or had to pay huge 'admin fees' to get the money moving

- getting money back in doesn't seem to be a problem; they all seem to know someone willing to do an unofficial value exchange, giving money in SA in country in exchange for an asset overseas.  For example, person A might need 200,000 rand in country for an extended family visit; person B in the community will give them the cash in country and in exchange Person A are told to give Person C in the UK, or Australia, or NZ, the money in that local currency.  rates often better than the bank rates too.

- the official way of getting money back in is often limited; I was in some south east asian countries in the past few years where you have to declare what you take in in cash and there are limits to what you can exchange in country; exchange is also only allowed in official outlets (although of course a black market exists)

- your real problem will be, i think, that if you have an investment in, say, Switzerland, and want to bring it back into a capital controlled UK in 2035, because you are inside the financial system there will be ways for the UK gvt to detected and charge a big tax/fee.  Another reason to say no to CBDC, I think.

 

[leonardratso]

30 minutes ago, Democorruptcy said:

I'm sure when HFEL was first put up I mentioned it's financials i.e. Chinese Banks. The search function on here doesn't seem to work properly now, is the older stuff archived? It must have been July 21, -34% since then.

https://www.hl.co.uk/shares/shares-search-results/h/henderson-far-east-income-ltd-ord-npv

[Funn3r]

33 minutes ago, Democorruptcy said:

I'm sure when HFEL was first put up I mentioned it's financials i.e. Chinese Banks. The search function on here doesn't seem to work properly now, is the older stuff archived? It must have been July 21, -34% since then.

Yes dreadful for me I am well down on it.

[DurhamBorn]

2 hours ago, sancho panza said:

I think thats a fair point.I think theres huge risk in UK fixed income

It's funny you're tlaking EM's today but Ive been running my slide rule over some stocks today as I have proceeds to invest

Question for you tho DB,do you think these funds(HFEL/IBZL) near 30% exposure to finacials is an issue?no pressure.

TEI invests in fixed income andhas been around since 1993.Some of the board have been in a logn time.I like these set ups.Long term boards like that are generaly a good sign imho as theyve seen a cycle or two.its our only fixed income asset.

Decl long TEI 1.5% at $4.50,IBZL 1% at £17

 

 

IBZL we got first ladder at £17.I may ladder in again and bring our average to £19

https://www.ishares.com/uk/professional/en/products/251853/ishares-msci-brazil-ucits-etf-inc-fund?switchLocale=y&siteEntryPassthrough=true

 

https://www.janushenderson.com/en-gb/investor/product/henderson-far-east-income-limited/

The financials holdings do not bother me because they are in countries i dont expect to implode.Its the west that is in serious trouble and the west that will have to print and force credit out into the economies.Looks like a golden EM set up.I see the biggest risk to my wealth being sterling going pop.Not the most likely  to happen,but the one with the potential to really hurt.If you can swallow the higher risk i still think Ashmore is the way to leverage EM debt.However much more risky and already bounced a lot.

[DurhamBorn]

2 hours ago, Lightscribe said:

In County Durham, wasn’t you there today DB to give him a quick one-two on the nose for the rest of the UK?

Funny enough i was in Durham today with an Asian and trust me not Sunak  , it was Darlington he was at though.