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Credit deflation and the reflation cycle to come.


DurhamBorn

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Again about New Gold


https://incakolanews.blogspot.com/2018/10/a-final-note-on-new-gold-ngd-from-ikn489.html?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed:+IncaKolaNews+(inca+kola+news)

 

Inca Kola has been tough on NGD for a long time now, tough but fair. If there are indeed insiders claiming that NGD would have to sell Blackwater way below its book value, that would be yet another nail in the coffin.

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2 hours ago, kibuc said:

Again about New Gold


https://incakolanews.blogspot.com/2018/10/a-final-note-on-new-gold-ngd-from-ikn489.html?utm_source=feedburner&utm_medium=twitter&utm_campaign=Feed:+IncaKolaNews+(inca+kola+news)

 

Inca Kola has been tough on NGD for a long time now, tough but fair. If there are indeed insiders claiming that NGD would have to sell Blackwater way below its book value, that would be yet another nail in the coffin.

I see they’ve brought out a news release to say they’ll be announcing their Q3 Results after close on 24th with a webcast/conference call the next morning to discuss them. Doesn’t bode well but assume this is the new guy now doing the right thing. Crazy that they got away (for a while) with such misleading numbers.

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5 hours ago, DurhamBorn said:

Yes its looking more and more like that is the plan.China has been forcing down commods through its funds for several  months now to try to protect its factories.The next stage is the west moving into a reflation through investment.The inflation genie is about to be unleashed,just a fat old debt deflation to stomach first (or maybe even during).

well could silver deflate then ? must admit im tempted to get a bit just for interest however i dont like the idea of being down by a fair chunk the moment you buy it.on the other hand i know it can move up fast.the highest i know thats its been recently was 1979-80 when it was circa 49 dollars without adjustment for nealy 40 years of inflation so whats that in todays terms ?  mind i also know what caused it to go that high .does anyone buy old demominated british coins the silver content is well known or just new britanias ?

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8 hours ago, Barnsey said:

US clearly using this opportunity to stave off dedollarisation

And ironically it will have precisely the opposite effect! Classic.

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1 hour ago, stokiescum said:

well could silver deflate then ? must admit im tempted to get a bit just for interest however i dont like the idea of being down by a fair chunk the moment you buy it.on the other hand i know it can move up fast.the highest i know thats its been recently was 1979-80 when it was circa 49 dollars without adjustment for nealy 40 years of inflation so whats that in todays terms ?  mind i also know what caused it to go that high .does anyone buy old demominated british coins the silver content is well known or just new britanias ?

It could,but you simply keep averaging in to it.Back in 80 the gold silver ratio got to 16 so you would be looking at $80 at todays gold price.I think $100 is easily in reach,but expect $200+.Iv been buying more Endeavour Silver and hope to increase my silver holdings the next year.One of the main reasons iv taken a job iv been offered is because i can save 100% of the wages and it will mostly be going into silver and its miners.

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leonardratso

this is good even if it doesnt pay off since your putting your money where your mouth is and have skin inthe game, there are a lot of pundits that talk the talk but dont walk the walk.

 

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1 minute ago, leonardratso said:

this is good even if it doesnt pay off since your putting your money where your mouth is and have skin inthe game, there are a lot of pundits that talk the talk but dont walk the walk.

 

Yes very much.I see such a risk/reward that im going back to work when i thought i would never be PAYE again.My business and dividends will pay all my bills and il be saving 100% of my salary (its £35k basic,very good for the north east).Almost all of that will be going into silver and PM miners.I already have the portion of my portfolio exposed to the sector and i wont go over my limit,so its off to work i go.If silver and/or its miners 5 x il turn a years work into £170k on top of my other holdings.If it doesnt it doesnt and as long as i wake up in a morning il be happy.

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31 minutes ago, DurhamBorn said:

Yes very much.I see such a risk/reward that im going back to work when i thought i would never be PAYE again.My business and dividends will pay all my bills and il be saving 100% of my salary (its £35k basic,very good for the north east).Almost all of that will be going into silver and PM miners.I already have the portion of my portfolio exposed to the sector and i wont go over my limit,so its off to work i go.If silver and/or its miners 5 x il turn a years work into £170k on top of my other holdings.If it doesnt it doesnt and as long as i wake up in a morning il be happy.

i wish you luck but its knowing when to sell it,it might have been 49 in 1980 but it was down to less than 5 by 1982.if i buy some it wont be much but id kick myself if i suspected it might happen and id got none at all, if it does nothing ive got some pretty coins .hopfully i will end up with a nice holiday for a small outlay if im patient lol.

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leonardratso
1 minute ago, stokiescum said:

i wish you luck but its knowing when to sell it,it might have been 49 in 1980 but it was down to less than 5 by 1982.if i buy some it wont be much but id kick myself if i suspected it might happen and id got none at all, if it does nothing ive got some pretty coins .hopfully i will end up with a nice holiday with a small outlay if im patient lol.

i do this with the lottery, ive got more chance of meeting ET than winning it, but what the hell, im not going to miss the couple of quid a week i spend on it, same with whatever i buy stock/fund wise, ill chuck a few quid at it every month, it might go up, it might go down, might not move, whichever Im not going to sweat it, dribble it in, wont make me rich if it wins out but wont break me if it loses out. Worth the risk. Coins will always be worth face value.

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5 hours ago, stokiescum said:

i wish you luck but its knowing when to sell it,it might have been 49 in 1980 but it was down to less than 5 by 1982.if i buy some it wont be much but id kick myself if i suspected it might happen and id got none at all, if it does nothing ive got some pretty coins .hopfully i will end up with a nice holiday for a small outlay if im patient lol.

I guess it's all about averaging in then averaging out when targets are hit whilst keeping a close eye on things, I expect the silver strength should hold due to industrial use going forward in a reflation as the miners gradually catch up with demand, rather than a safe haven up and own reversal asset like Gold?

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10 hours ago, DurhamBorn said:

Yes very much.I see such a risk/reward that im going back to work when i thought i would never be PAYE again.My business and dividends will pay all my bills and il be saving 100% of my salary (its £35k basic,very good for the north east).Almost all of that will be going into silver and PM miners.I already have the portion of my portfolio exposed to the sector and i wont go over my limit,so its off to work i go.If silver and/or its miners 5 x il turn a years work into £170k on top of my other holdings.If it doesnt it doesnt and as long as i wake up in a morning il be happy.

Hi DB,

For PMs you seem to be very much focused on miners rather than physical (in the hand or physical ETFs), I would be interested to hear your thoughts (and others) on this as 1.miners behave more like equities and so less diversified, and 2. they can go bust yet PMs will always retain some value.

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9 hours ago, leonardratso said:

i do this with the lottery, ive got more chance of meeting ET than winning it, but what the hell, im not going to miss the couple of quid a week i spend on it, same with whatever i buy stock/fund wise, ill chuck a few quid at it every month, it might go up, it might go down, might not move, whichever Im not going to sweat it, dribble it in, wont make me rich if it wins out but wont break me if it loses out. Worth the risk. Coins will always be worth face value.

But with the lotto your capital is lost straight away (hopefully your expertise in equities means it lasts a little longer :-))...if you want a flutter/chance of winning a Mil surely premium bonds are better as you keep you stake whatever happens?

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1 hour ago, MrXxx said:

Hi DB,

For PMs you seem to be very much focused on miners rather than physical (in the hand or physical ETFs), I would be interested to hear your thoughts (and others) on this as 1.miners behave more like equities and so less diversified, and 2. they can go bust yet PMs will always retain some value.

I also own physical and will keep buying physical.The reason i also am buying the miners is because i think the risk/reward over a 7 year period is in my favour.I also spread across around 10 stocks in the sector and fully expect some to do very badly and perhaps even a couple to go under.I have no concern over that as i think a couple will go up 3x,5x perhaps 20x+ in price.The brutal truth is if i invest £50k in the sector and i end up with £20k in 7 years i can live with that.However my road map tells me there is a very good chance i could make a huge profit and inside tax free wrappers.Last time my system gave a buy back in late 2015 i bought several stocks.Eldorado cost me -36% (i sold some when they were up and kept some),Sibanye made me 100%+ that i cashed and re-bought in the last tranche and First Majestic multi bagged and my mistake was selling with nearly 400% as it added nearly another 200%.

The reason i like silver is that im a contrarian investor.My sentiment trackers are showing me its the most hated sector,and the most under-owned.The macro situation points to things moving in the direction where in the past silver has done very well.The commercials are taking delivery on their futures contracts for the first time in history.Almost everything is in place for a very strong bull market,yet the stocks are priced for a never ending bear.

Part of my rubber band scan includes a lot of work into what stocks track the metal the most.

Take Endeavor Silver Corp my highest silver rubber stock.It is debt free,has two new mines,one starting now,the other about to start to be built.They track silver very well being a pure play PM miner.If silver goes to $50 they will 10x at least.I like that risk/reward.

Commercials are net long on Gold for the first time since 2001. That led to a 700% rise in the Gold price. Commercials are net long on Silver for the first time iv ever seen. And they are net long Platinum. Small traders sentiment has been very negative.Everyone says the dollar is going up but my cycles work suggest the dollar will head to the downside into December.The sentiment picture is also supporting a larger trend reversal.I think Silver can find its way back up to the 17.45 resistance point in the next few months after some more chopping the next few days then break to the upside.

Gold,I see the December 2015 low as an image of the 1999 low which then ran up 700% into 2011. In terms of short term cycles I think that GOLD will complete its sideways trading pattern in early or late October and start to accelerate its upward movement and head back above 1300. Right now energy is building with this sideways action.There will be lots of very severe pull backs in this PM bull about to get underway and weak hands will keep getting shaken out.

All just my opinion of course.

 

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leonardratso
3 hours ago, MrXxx said:

But with the lotto your capital is lost straight away (hopefully your expertise in equities means it lasts a little longer :-))...if you want a flutter/chance of winning a Mil surely premium bonds are better as you keep you stake whatever happens?

indeed, thats why i use them all, spread across the lot of them. Ive even got premium bonds for the kids since i then dont have to will it to them should i kick the bucket or they reach 16.

Hence the capital allocation, most in least risky to least in most risky - ie couple of lottery tickets a week, maybe 20% in equity/funds, 10-15% in cash the rest can go to premium bonds since its not a great investment but is almost as good as cash as far as liquidity goes.

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@DurhamBorn regarding tlt, I think I read you mention you sold a while back?  I have watched it drop a fair bit recently.  

I'm assuming you still see rates lowering at some point but does seem the trend and consensus is that rates are going to keep rising ( which directly affects tlt and the like through sentiment?).  Anyway I'm hindsight -obviously- I should have sold off too... Just weighting up now whether to keep holding at the moment for the shortish term or cut my losses for the exit.  

Any thoughts or illumination here dB?  Not expecting financial advice!  Just thinking out loud that probably more downside holding right now than the reverse. 

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37 minutes ago, Dogtania said:

@DurhamBorn regarding tlt, I think I read you mention you sold a while back?  I have watched it drop a fair bit recently.  

I'm assuming you still see rates lowering at some point but does seem the trend and consensus is that rates are going to keep rising ( which directly affects tlt and the like through sentiment?).  Anyway I'm hindsight -obviously- I should have sold off too... Just weighting up now whether to keep holding at the moment for the shortish term or cut my losses for the exit.  

Any thoughts or illumination here dB?  Not expecting financial advice!  Just thinking out loud that probably more downside holding right now than the reverse. 

I still own some US treasuries and will continue to do so.I see them as insurance against a deflationary debt deflation.Im not convinced rates will keep rising much longer.If they do then inflation is already out and PMs should easily outshine any treasury losses.

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11 hours ago, DurhamBorn said:

Gold,I see the December 2015 low as an image of the 1999 low which then ran up 700% into 2011.

 

More through luck than anything else I purchased my first tranche of gold (I bought 5oz) at the very bottom in December 2015. Sub £700 before premiums. I told myself to average in. Everything since then has cost me more :S

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sancho panza
On 04/10/2018 at 10:43, Barnsey said:

US (and Global) yields really going for it at the moment, along with Powell's hawkish comments the other day, putting much more strain on emerging markets, Euro weakening against USD.

Lots of tough talk to come from VP Pence later today signalling a significant escalation of anti China relations, you're with them or us. This is going to get seriously nasty. US clearly using this opportunity to stave off dedollarisation despite the pain some are currently going through, very interesting times. Goodness knows what happens when the Fed have to reverse policy.

https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-china-used-a-tiny-chip-to-infiltrate-america-s-top-companies

https://uk.investing.com/indices/uk-100

FTSE 100 down 7500 down to 7318 this week.

Feels like the UK market has turned but I can't really explain why.

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sancho panza
On 04/10/2018 at 21:21, DurhamBorn said:

It could,but you simply keep averaging in to it.Back in 80 the gold silver ratio got to 16 so you would be looking at $80 at todays gold price.I think $100 is easily in reach,but expect $200+.Iv been buying more Endeavour Silver and hope to increase my silver holdings the next year.One of the main reasons iv taken a job iv been offered is because i can save 100% of the wages and it will mostly be going into silver and its miners.

Silver certainly looks due a repricing versus Gold

image.png.d5226c9f203354a9c636956f58b31e32.png

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sancho panza
On 03/10/2018 at 23:27, DurhamBorn said:

Harmony Gold,Tahoe Resources,Eldorado Gold,Alexco Resources,Sibanye,Endeavor Silver Corp,Avino Silver and Gold Mines,First Majestic Silver,New Gold Inc,Great Panther Silver.

Now if ever there was a portfolio for widows and orphans to avoid that would be it,but if we do get a run in PMs some of those will 10x+ and in a real silver bull there could be a 50x in there somewhere.I own several of those now and doing ok,some up a lot,some down a lot as expected as we chop around for now.I also own several from my technical list,that includes the likes of Yamana,Anglogold,Kinross etc.

A lot have just presented at the gold forum and the webcasts are all in there if you click through the names.

http://www.denvergoldforum.org/participating-companies/

Many thanks for that DB,there's a couple of names in there I'm not too familiar with so appreciate the heads up.

As you say though,certainly not for Widows and Orphans.

As I said to Barnsey,the UK markets feel like they've had a turn.Some of the builders have turned down significantly.

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4 hours ago, DurhamBorn said:

I still own some US treasuries and will continue to do so.I see them as insurance against a deflationary debt deflation.Im not convinced rates will keep rising much longer.If they do then inflation is already out and PMs should easily outshine any treasury losses.

Thanks dB.  The whole hedge angle is impressively simple but sound. Though l will keep an eye on and quite possibly sell some or most. 

However I really appreciate the concept of ratio in risk/ return.  Especially at the moment potentially in pm / miners where the obvious downside is going to zero or at least close to... Weighed against a far bigger upside possible. 

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