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Credit deflation and the reflation cycle to come.


DurhamBorn

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23 minutes ago, DurhamBorn said:

Exactly Harley,and timing of course.Iv bought many passive funds myself (before the EU stopped us) for country funds like Turkey,Vietnam,Colombia etc.The problem i see is once some of these massive market cap companies start to go down there will be no bids.

Something like 5 fund managers control 80% of all funds.  Hard to see the liquidity if all their customers want to sell at the same time.  Hardly going to sell to each other.  And no cushion. 

Plus I understand in the US at least they have to liquidate within a certain time limit, although the prospectuses no doubt have some provisions. 

Not that having more than 8 may be much better   Point is, if people held individual stocks or specialist funds, they may be less likely to sell everything in a correction given they have more "granularity".  No choice in a broad tracker.  And fast.

 

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10 minutes ago, Harley said:

Share prices so fees not relevant?  I asked about divs and it was confirmed here they are net of fees.

On the other hand, I wish I had the chart showing an etf div tracker based on nothing other than the top estimated annual divs compared to a div "aristocrat" fund that had all these extra selection criteria (e.g. past div growth).  Identical price charts!

Ah, I see (well I don't as the screen is so small on this phone!), I was thinking it was divis/returns.

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Just now, Harley said:

Something like 5 fund managers control 80% of all funds.  Hard to see the liquidity if all their customers want to sell at the same time.  Hardly going to sell to each other.  And no cushion.  Plus I understand in the US at least they have to liquidate within a certain time limit, although the prospectuses no doubt have some provisions. 

It wouldnt shock me to see 50% falls in some of the bubble stocks over 3 days.Some form or rally then cut in half again.The troubling thing is i think people in trackers think they hold each stock in equal measure if they even know anything.

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1 minute ago, MrXxx said:

Ah, I see (well I don't as the screen is so small on this phone!), I was thinking it was divis/returns.

I doubleclick the image on my phone and can then enlarge it.

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14 minutes ago, Lavalas said:

Think I mentioned it after following @economicalpha on Twitter. Very much his tip not mine but pleased I followed it too. My plan was to reassess towards $5 and maybe take some off but at their recent Beaver Creek presentation they hinted that there might be even more undiscovered gold at Kiena Deep despite that which they have already found still not being fully priced in yet. 

https://wsw.com/webcast/dgf18/wdo.to/?lobby=true&day=1

There’s a lot of really useful info out there on the miners and I think just like anything, it’s about finding the right people to help inform you and those you should ignore. I’m still learning so I’d rather you know the source than think I’m worth paying much attention too. This thread, for example, is obviously brilliant in that the variety of its contributions gives analysis and maybe a direction but not necessarily a consensus. The likes of www.ceo.ca, not so much. It’s fanatical stuff with too much noise. Often reminds me of the bitcoin thread on ToS. Lack of measured analysis, way too many ‘to the moon’ type statements. This really leaves them open to pump and dumps where any vaguely decent drill results can be spun into FOMO. I suppose they’re the the dumb money and we need to not be the dumb money.

All fun

:-)...see my comment above!

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2 minutes ago, Harley said:

I doubleclick the image on my phone and can then enlarge it.

I tried that on my glasses and it didn't seem to work...`should have gone to Specsavers!` :-) :-) :-)

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11 minutes ago, MrXxx said:

Ah, I see (well I don't as the screen is so small on this phone!), I was thinking it was divis/returns.

I had a closer look at the chart and noticed it was not a case of the fund performing consistently better than the etf.  Rather say one major event where the fund dipped less and then mostly held onto that gain, etc.  Worth more research.  

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3 hours ago, Harley said:

An old article on tracker funds but may still be valid:

https://www.telegraph.co.uk/investing/funds/hidden-dangers-within-popular-tracker-funds/

Morningstar usually provides holdings data and iShares for one (etf provider) details them all on its website.

But these may have a role overall in some portfolios.  Just nice to know the risks.

Seems a bit like a fear mongering article. As I wrote a few pages back the percentage holdings in the indexes of FANNGS. Ironically the article has a picture of a Ferarri which when looking at one of the big IT's the other day was balls deep in Alibaba at  7% and 3% in Ferarri, which are considerably more than you would find in a world index tracker. Now that's some hidden dangers xD

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UnconventionalWisdom
15 hours ago, sancho panza said:

I can't see how many of the big mall owners will be making any profits in five let alone ten years with their current debt structure.Look at the failings of Sears in the US to see where Dept stores are going and with them the Landlords piggy backing the credit bubble.

Another problem high houses cause. Most under 35 don't have a house they believe they will be in longer than 5 years and hence won't buy much and definitely not anything big. If I owned my own house I'd be doing it up and getting things for a long term future. Retail is screwed if noone wants to kit their place out properly. Instead I'm saving my cash for later and buying silver 😉

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2 hours ago, UnconventionalWisdom said:

Another problem high houses cause. Most under 35 don't have a house they believe they will be in longer than 5 years and hence won't buy much and definitely not anything big. If I owned my own house I'd be doing it up and getting things for a long term future. Retail is screwed if noone wants to kit their place out properly. Instead I'm saving my cash for later and buying silver 😉

Good point, and they can't rely on BTL landlords for sales as they fit out their properties with second hand giveaways or if pushed, with cheap flat pack. 

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9 hours ago, DurhamBorn said:

I picked a terrible time to go back to work Barnsey didnt i considering i dont have a smart phone.I have one in the cupboard my other half gave me when she bought a new one (gumtree of  course)

I know you would appreciate this little antidote DB. Managed to pick up 4 demijohns, 10 swing-top bottles and brewing accessories for £10 on Shpock this weekend (just missed out on someone giving away 20-odd demijohns for free too) So got myself some Apple and Raspberry juice (4l for £3) and some Young’s super yeast (might put a few hairs on your chest), and it’s happily bubbling away in the airing cupboard. Aim is to rack it off in two weeks, leave to mature for 6 weeks or so then bottle with some brewing sugar to prime (make it fizzy) Was thinking to make it a nice spiced cider for Xmas (if it lasts that long and at that ABV it maybe more an Apple wine than cider)

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1 hour ago, Sideysid said:

I know you would appreciate this little antidote DB. Managed to pick up 4 demijohns, 10 swing-top bottles and brewing accessories for £10 on Shpock this weekend (just missed out on someone giving away 20-odd demijohns for free too) So got myself some Apple and Raspberry juice (4l for £3) and some Young’s super yeast (might put a few hairs on your chest), and it’s happily bubbling away in the airing cupboard. Aim is to rack it off in two weeks, leave to mature for 6 weeks or so then bottle with some brewing sugar to prime (make it fizzy) Was thinking to make it a nice spiced cider for Xmas (if it lasts that long and at that ABV it maybe more an Apple wine than cider)

Perfect.Get through winter sozzled for a few quid.The 2nd hand sites are amazing.The price of everything is shooting up apart from on them.Noticed today 10 fish fingers in Aldi are now £1.39.They used to be £1.09,the £1.19,£1.29.Prices outside of staples are shooting up.Im a bit worried i wont be able to keep my freezers topped up with 75% off food though as i can only make 3 nights a week now.Last night however one of the reductions went through full price,so Tesco refunded double the over chargexD.I can earn in the new job a weeks food in 1 hours overtime,but i would have a mental breakdown if i lost my frugal ways.Im after a persian rug on Gumtree,missed a few £300 ones for £50,but il get one in the end :ph34r:

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13 hours ago, DurhamBorn said:

 

I think the top is in,or very close in the US equity markets.If they buy the dip again i think it will be the last one.The energy is running out.Its crucial though the first 20% of the bear is drip drip down to support a PM rally.We dont want to see huge drops.The UK markets looks like some sectors are mostly through their bear,others just entering.We could be in for a falling market,but one that goes sector by sector.Given the market always hurts the most people it can,US passive funds will likely be the biggest losers.

1) I have this nagging feeling that we'll see a strong rally,many of my lsit of shorts are flagging oversold.

2) Huge drops don't suit the sort of people hanging round this thresad for a variety of reasons.

3) I can't beleive some of the price action in some sectors.Looking at the hosuebuilders you'd say we're entereing recession.Looking at the Utilities,you'd say we're in it.Looking at some support services stocks,you'd say we're nowhere near it.

12 hours ago, Barnsey said:

THE big unknown right now, SPX broke and held below it's 200DMA support on Friday for the first time, interesting week ahead!

Some of the big techies are looking weak eg FB.But then other eg Apple are holding.It's all bout the Fang stocks for me.When they go,it'll be carnage.Persoanlly,I think that'll be next year but I have no reasoning aside from buy back activity and a substantial sneaking feeling.UK could well go long before the US.

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54 minutes ago, DurhamBorn said:

Perfect.Get through winter sozzled for a few quid.The 2nd hand sites are amazing.The price of everything is shooting up apart from on them.Noticed today 10 fish fingers in Aldi are now £1.39.They used to be £1.09,the £1.19,£1.29.Prices outside of staples are shooting up.Im a bit worried i wont be able to keep my freezers topped up with 75% off food though as i can only make 3 nights a week now.Last night however one of the reductions went through full price,so Tesco refunded double the over chargexD.I can earn in the new job a weeks food in 1 hours overtime,but i would have a mental breakdown if i lost my frugal ways.Im after a persian rug on Gumtree,missed a few £300 ones for £50,but il get one in the end :ph34r:

The perils of working to buy PM mining shares.

 

How's the job going?

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Bricks & Mortar
1 hour ago, DurhamBorn said:

.Im a bit worried i wont be able to keep my freezers topped up with 75% off food

About once each year, I do a moratorium on food purchases.  Initially, it's total, and the freezer and cupboards go down rapidly.  Then, I allow myself only items to be eaten alongside the remaining stock.  When the cupboards are at their lowest ebb, I wash and clean them.  I certainly notice extra cash during this period.   And once I start buying again, I'm able to take full advantage of anything I see.
Mair siller?

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6 hours ago, sancho panza said:

The perils of working to buy PM mining shares.

 

How's the job going?

Well im up at an un-godly hour here,but im not taking it too badly :CryBaby:.I keep in my head the fact it means i can have some more firepower going forward.Even in cash terms every 3 months wages equals 1 years spending so even if i did 6 months it would mean i wouldnt need to take anything from my investments for two years or make a shilling from my business,a handy position where we are in the cycle.The pension goes in a worldwide tracker so as soon as the log in arrives il turn that to a cash fund.The only thing i dont like is paying income tax.I could SIPP everything above £12k of course,but im not sure i want to.Might re-consider after 6 months if im still there.Im a forward indicator :o

 

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5 hours ago, Bricks & Mortar said:

About once each year, I do a moratorium on food purchases.  Initially, it's total, and the freezer and cupboards go down rapidly.  Then, I allow myself only items to be eaten alongside the remaining stock.  When the cupboards are at their lowest ebb, I wash and clean them.  I certainly notice extra cash during this period.   And once I start buying again, I'm able to take full advantage of anything I see.
Mair siller?

Thats actually a very good idea.The prices of food outside of staples is crazy now.Been able to cook from scratch is even more money saving these days.Im starting to think about getting an air rifle for the pigeons that are forever in my garden for the pot.

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51 minutes ago, DurhamBorn said:

Well im up at an un-godly hour here,but im not taking it too badly :CryBaby:.I keep in my head the fact it means i can have some more firepower going forward.Even in cash terms every 3 months wages equals 1 years spending so even if i did 6 months it would mean i wouldnt need to take anything from my investments for two years or make a shilling from my business,a handy position where we are in the cycle.The pension goes in a worldwide tracker so as soon as the log in arrives il turn that to a cash fund.The only thing i dont like is paying income tax.I could SIPP everything above £12k of course,but im not sure i want to.Might re-consider after 6 months if im still there.Im a forward indicator :o

 

count yourself lucky, ive been getting up @ 5.30am for years.

47 minutes ago, DurhamBorn said:

Thats actually a very good idea.The prices of food outside of staples is crazy now.Been able to cook from scratch is even more money saving these days.Im starting to think about getting an air rifle for the pigeons that are forever in my garden for the pot.

pigeons like pot? and its warm enough to grow it in your back garden in Durham? amazing, freezing here.

I wouldnt be too bothered about the pigeons, they'll probably be full of tab ends, old pizza and vomit from the town center overnight.

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The people I work with are still absolutely convinced prices will not fall, at least not by much as Carney will never put up rates by anything that would threaten the housing market and also the sheer demand keeping a floor under prices.

Several have moved recently, taking on bigger mortgages, one in his early fifties and mortgage free has moved and bought a £400,000 semi requiring a £50,000 mortgage to finance, and he is talking about putting an extension over the garage for another £50,000, and points out he is getting no interest on his money in the building society so may as well put it in property as it is safe and is going to go up in value -right???

Another with a £300,000 mortgage and up to his ears in credit card debts, just laughs and keeps switching his balance to a new card issuer who gives the next 0% deal, recently sent me an article detailing how much savers have lost over the last ten years due to the Bank of England’s ZIRP. He was told by the estate agent who sold him the house(2 years ago) that prices will go up around 7%p.a over the next ten years or so(therefore doubling -rule of 72), and so far he has been proved right. He is also convinced interest rates will never go up and who can blame him??? He expects his house when it is paid off to be worth in excess of £1m.

If they went up by 2%(which is as much as Carney would dare to if his hand were forced) all of those people would be totally blase about it, as their payments would still be easily affordable.

An Anecdotal comment from another forum, but its a good demonstration of the problems that QE causes with misallocation of capital and ignorance of risk.  The problem in the long run is that when enough people act the same way by levering themselves up as much as possible and get rewarded for it, it incentivises everyone to act the same way.  People taking out massive mortgages they couldn't afford like in 2008 is the inevitable conclusion, the timing of the collapse is the hardest part though.

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40 minutes ago, Majorpain said:

An Anecdotal comment from another forum, but its a good demonstration of the problems that QE causes with misallocation of capital and ignorance of risk.  The problem in the long run is that when enough people act the same way by levering themselves up as much as possible and get rewarded for it, it incentivises everyone to act the same way.  People taking out massive mortgages they couldn't afford like in 2008 is the inevitable conclusion, the timing of the collapse is the hardest part though.

When everyone's piling into a 'one way bet' though (...their thoughts), the dislocation (when it comes) will be far greater, although it might take longer to unravel.

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20 hours ago, azzuri82 said:

When everyone's piling into a 'one way bet' though (...their thoughts), the dislocation (when it comes) will be far greater, although it might take longer to unravel.

That's a good point, a possible answer to one of the mysteries of this cycle is how long its been held together without anything major (yet) occurring.  It will be interesting in the future to look back from what triggers the inevitable crisis and see what measures where in place to keep it moving (I suspect mountains of cheap credit but we will see!)

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18 hours ago, The XYY Man said:

The wisdom of that idea varies depending exactly where in the County of Durham that you reside.

Try it anywhere along the South-East Durham "pit-yacker" riviera - from Crimdon Dene to Seaham - and you will wish that you hadn't.

The pigeon-men of those parts do not take kindly to their beloved birds being knocked-off.

In fact, I think you can still be transported to Australia for it in Shotton Colliery...!

;)

 

XYY

 

 

I dunno.

Pigeon and leek stew. Theres load of really big leeks near the pigeon sheds...

 

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