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Credit deflation and the reflation cycle to come.


DurhamBorn

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37 minutes ago, Option5 said:

Aberdeen is a very strange market, the oil industry distorts the house prices.

True but this is an article now sat towards the top of the Daily Mail home page. I suspect it's part of an attempt to kill HTB....

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1 hour ago, Barnsey said:

And so the HTB crisis begins...

http://www.thisismoney.co.uk/money/mortgageshome/article-6131611/Help-Buy-left-trapped.html

The idea was that they would stay in the flat for a few years while saving for a larger deposit. Then, when they sold the property, they could use this, plus any profit they had made through rising house prices, to afford a new home.

But since they bought their flat in September 2015, its market value has fallen by 15 pc to £175,000.

SO as they house price is down 15% that is their 5% deposit gone and us taxpayers have lost 10% of purchase price .. banks and builder are ok though so their bribes to the Tory party have worked wonders.

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I should add on the miners many are doing very well and some poor.Harmony was the no1 stock on my "rubber band" list of buys,those are companies i expect to have a very strong snap back if/when the sector turns.They are up 24% in a month in Rand terms and about 15% for sterling investors buying the ADRs in a month.Thats the reason you stair case in to this sector because 20% reds and greens are rounding errors most of the time.

https://www.google.co.uk/search?hl=en-GB&biw=1353&bih=635&ei=vpiPW8u0NoP4wAKRr7nYAw&q=JSE%3AHAR&oq=JSE%3AHAR&gs_l=psy-ab.12...0.0.0.97.0.0.0.0.0.0.0.0..0.0....0...1c..64.psy-ab..0.0.0....0.iCNbcdS_W3g

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21 minutes ago, Yellow_Reduced_Sticker said:

...as the 'count' isn't here posting HEADLINES, looks like i'll have to keep up the GOOD work!xD

 

WARNING: "Real estate market could lead to Europe's next crisis, ECB says"

https://uk.finance.yahoo.com/news/real-estate-market-could-lead-europes-next-crisis-072827943--business.html

Whod have thunk printing trillions of euros would have sent asset prices to moon. 

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5 minutes ago, Banned said:

SO as they house price is down 15% that is their 5% deposit gone and us taxpayers have lost 10% of purchase price .. banks and builder are ok though so their bribes to the Tory party have worked wonders.

No taxpayers have lost 10% of 25%,you owe 25% of the value up or down.They could walk away now and pay that if they could cover the mortgage shortfall.They say they could be stuck for "years",i think that is more likely "decades".Deposit gone,negative equity unlikely to return for a very long time if ever and not enough headroom to save enough to clear things.Oh and once their fix comes off a nice big far rate increase as they have no equity.They should of bought a £55k three bed ex council near me and gone on tax credits.

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1 minute ago, DurhamBorn said:

No taxpayers have lost 10% of 25%,you owe 25% of the value up or down.They could walk away now and pay that if they could cover the mortgage shortfall.They say they could be stuck for "years",i think that is more likely "decades".Deposit gone,negative equity unlikely to return for a very long time if ever and not enough headroom to save enough to clear things.Oh and once their fix comes off a nice big far rate increase as they have no equity.They should of bought a £55k three bed ex council near me and gone on tax credits.

Mine was on the presumption they go bankrupt.

Good luck with selling a flat in Aberdeen in the next decade for peak boom prices, i see they are already trying to replace the oil industry with wind ... good luck with that as i can't see people wanting to live in that grey cold wet town if earnings arent as high as they are at present in that town.

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2 minutes ago, DurhamBorn said:

No taxpayers have lost 10% of 25%,you owe 25% of the value up or down.They could walk away now and pay that if they could cover the mortgage shortfall.They say they could be stuck for "years",i think that is more likely "decades".Deposit gone,negative equity unlikely to return for a very long time if ever and not enough headroom to save enough to clear things.Oh and once their fix comes off a nice big far rate increase as they have no equity.They should of bought a £55k three bed ex council near me and gone on tax credits.

This being Aberdeen, if the oil price goes up so will house prices. Aberdeen has never had any real link to the rest of the UK as far as economics are concerned in fact it seems to do the opposite of the rest of the UK.

Aberdeen had mass negative equity in the 1986 oil price crash and probably has now but unless people are forced to sell it won't show as much.

https://www.energyvoice.com/insights/84307/the-aberdeen-street-that-summed-up-the-citys-first-oil-crash/

 

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Just now, Banned said:

Mine was on the presumption they go bankrupt.

Good luck with selling a flat in Aberdeen in the next decade for peak boom prices, i see they are already trying to replace the oil industry with wind ... good luck with that as i can't see people wanting to live in that grey cold wet town if earnings arent as high as they are at present in that town.

Exactly and wind wont employ as many people.Bankrupt will be interesting wont it,government would probably take a 50% to 75% loss then probably.The loans dont even amortize over time,classic ponzi.

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7 minutes ago, DurhamBorn said:

No taxpayers have lost 10% of 25%,you owe 25% of the value up or down.They could walk away now and pay that if they could cover the mortgage shortfall.They say they could be stuck for "years",i think that is more likely "decades".Deposit gone,negative equity unlikely to return for a very long time if ever and not enough headroom to save enough to clear things.Oh and once their fix comes off a nice big far rate increase as they have no equity.They should of bought a £55k three bed ex council near me and gone on tax credits.

Hopefully as this ponzi collapses we'll lose our norm of borrowing at extreme levels with "help" because the amazing guaranteed profit will look after everything, as quoted in the article "plus any profit they had made"

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Yellow_Reduced_Sticker
34 minutes ago, DurhamBorn said:

I should add on the miners many are doing very well and some poor.Harmony was the no1 stock on my "rubber band" list of buys,those are companies i expect to have a very strong snap back if/when the sector turns.They are up 24% in a month in Rand terms and about 15% for sterling investors buying the ADRs in a month.Thats the reason you stair case in to this sector because 20% reds and greens are rounding errors most of the time.

https://www.google.co.uk/search?hl=en-GB&biw=1353&bih=635&ei=vpiPW8u0NoP4wAKRr7nYAw&q=JSE%3AHAR&oq=JSE%3AHAR&gs_l=psy-ab.12...0.0.0.97.0.0.0.0.0.0.0.0..0.0....0...1c..64.psy-ab..0.0.0....0.iCNbcdS_W3g

Just loged into my HL acc havn't for a month, yeah Harmony UP!

However my New Gold Inc (NGD) is DOWN 57% HA-ha!xD

F**** NGD looks BUST, what do ya reckon DB? MAYBE a buying opportunity...

still my porfolio only down 15% nought to worry about, PLUS i got lamb chopped steaks last night for 30p reduced from £4.00!xD

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The genius of it all, as prices reverse, they can blame it on the "Democratic vote of the people" along with the US trade wars triggering a global recession, nothing to do with artificially low interest rates and props. Good to see the negative sentiment building rapidly on HTB though.

Interesting Sky article today:

https://news.sky.com/story/sky-data-poll-public-ready-for-change-as-uk-economy-is-unfair-and-not-working-11490328

Of interest are some of the reforms the public are in favour of, supporting a reflationary path ahead:

  • Establishing a publicly owned investment bank (55%)
  • Greater government borrowing and investment (52%)

https://www.ippr.org/research/publications/prosperity-and-justice

Page 156 onwards of report VERY interesting cc: @DurhamBorn @sancho panza lots of content regarding being at the end of the consumer debt cycle and needing to find another way forward

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16 minutes ago, Yellow_Reduced_Sticker said:

Just loged into my HL acc havn't for a month, yeah Harmony UP!

However my New Gold Inc (NGD) is DOWN 57% HA-ha!xD

F**** NGD looks BUST, what do ya reckon DB? MAYBE a buying opportunity...

still my porfolio only down 15% nought to worry about, PLUS i got lamb chopped steaks last night for 30p reduced from £4.00!xD

Id sit in them all and wait,the knack in a gold miner portfolio in a bull is some multi bag,making up for any duds.

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8 minutes ago, harp said:

I do London and Toronto just to spread the risk.

Same for me,London and Toronto,i like some away from my home country and also away from Europe.

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1 hour ago, Yellow_Reduced_Sticker said:

Just loged into my HL acc havn't for a month, yeah Harmony UP!

However my New Gold Inc (NGD) is DOWN 57% HA-ha!xD

F**** NGD looks BUST, what do ya reckon DB? MAYBE a buying opportunity...

 

Curious what reearch you did on NGD originally and/or what triggered such a dramatic drop?

If there is no clear reason and the idea of succeeding in miners is to be counter intuitive + beaten up prices are a key part of the buying logic here would this be a good one to start averaging into ..for those of us with disposable and yet to enter the market anyway?

Cheers

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14 hours ago, sancho panza said:

A you couldn't make it up contender.

Woodford times his entry into the builders the day they get smashed................:ph34r:

 

Citywire 4/9/18

 

'Woodford cuts Lloyds stake to load up on builders.'

Barratt Developments is now Woodford's second largest holding as fund group hails 'compelling valuation opportunities' in house builders.'

Barratt just posted record profits.

http://www.proactiveinvestors.co.uk/companies/news/204201/barratt-developments-delivers-record-profits-as-housing-completions-hit-decade-high-204201.html

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I own NGD and have regrets about not getting out straight after their previous results, although I’ve learnt a lot as a result. At this point I think they could be worth buying if you like a gamble but at the same time they’re just as likely to go bust altogether (regardless of how normal swings are in the sector). They downgraded forecast production of their Rainy River mine by 25% (hence the market reaction) and it’s still lagging behind the new target so I fear what the next results will say. Also they’ve reduced costs but that mine is still not profitable so I don’t know at what point their creditors call it a day (they have huge debts already) Personally I’d wait at least until their next results come out... but others may be more knowledgable.

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45 minutes ago, Lavalas said:

I own NGD and have regrets about not getting out straight after their previous results, although I’ve learnt a lot as a result. At this point I think they could be worth buying if you like a gamble but at the same time they’re just as likely to go bust altogether (regardless of how normal swings are in the sector). They downgraded forecast production of their Rainy River mine by 25% (hence the market reaction) and it’s still lagging behind the new target so I fear what the next results will say. Also they’ve reduced costs but that mine is still not profitable so I don’t know at what point their creditors call it a day (they have huge debts already) Personally I’d wait at least until their next results come out... but others may be more knowledgable.

Not much shareholder value being created there!  My money is going into companies which are low cost producers and can survive the depressed prices or hedged companies who know what price they will get for their products and can financially plan accordingly.  Nothing is risk free, but it doesn't hurt to do research into minimizing it if possible. 

The guidance for NGD's biggest producing mine (c50% production) was $1600-1700 AISC during 2018 (non GAAP??!!), its not surprising its being priced for bankruptcy IMO.

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26 minutes ago, Majorpain said:

Not much shareholder value being created there!  My money is going into companies which are low cost producers and can survive the depressed prices or hedged companies who know what price they will get for their products and can financially plan accordingly.  Nothing is risk free, but it doesn't hurt to do research into minimizing it if possible. 

The guidance for NGD's biggest producing mine (c50% production) was $1600-1700 AISC during 2018 (non GAAP??!!), its not surprising its being priced for bankruptcy IMO.

Yeah I’ve basically written the money off and filed it under ‘what was I thinking’. So we get a (big) run up in gold and it becomes profitable... I’d rather be in the ones that will become even more profitable. Live and learn.

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Most here are experienced,but for anyone considering the PM miner space right now,its crucial to get a good spread.I would say 6 minimum,and between 6 and 10 better .I like to buy half from stocks that have been hit very hard from their highs,and also stocks showing good technical strength already.I also try to keep spread across different countries as well.The last time i entered the sector i had some losses from Eldorado of around 60%,but Majestic returned 500%,Sibanye 200% ,Harmony 200% etc.Even in a bull some companies have mine failures,country problems etc that drag them down.My rubber band list at the moment has Harmony number 2 and New Gold no 1 and if i was buying now id still buy it,but at a smaller size than others.

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actually SBGL seems to be holding up quite well, its been green for a while albeit after a big dip post their miners getting killed and threats to take control of it in SA.

Have you noticed that NGD always comes back on google as NGD (pre merger) - whats the pre merger about ?

 

actually might be partly due to rand fx.

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48 minutes ago, leonardratso said:

actually SBGL seems to be holding up quite well, its been green for a while albeit after a big dip post their miners getting killed and threats to take control of it in SA.

Have you noticed that NGD always comes back on google as NGD (pre merger) - whats the pre merger about ?

 

actually might be partly due to rand fx.

Harmony and Sibanye were getting 520k rand a kilo for gold a month ago,and thats just a very small profit,today they are getting close to 600k rand a kilo.Harmony would go from about £30 mill profit to £340 mill on those numbers.I would expect they will be hedging forward with this rand weakness a lot of production ,came just in time for them really,both up a lot today in rand and dollar.

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