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Credit deflation and the reflation cycle to come.


DurhamBorn

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2 hours ago, Harley said:

I'm using the last few rays of sun to fill my ark!

If I stay in cash, they'll steal it from me. 

If I invest in anything, It'll probably go down, at least a bit to start.

Probably just have to hold my nose and jump into more of a "Permanent Portfolio" allied with averaging in to those good but beaten down individual (div) stocks.

All ideas appreciated!

@Harley  interesting idea...
 

https://www.investopedia.com/ask/answers/09/permanent-portfolio.asp

Has anyone (on this thread) tried this in real life to comment on its effectiveness?

M.C.

 

 

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2 hours ago, Harley said:

Probably just have to hold my nose and jump into more of a "Permenant Portfolio" allied with averaging in to those good but beaten down individual (div) stocks.

Just been screening the FTSE100 on pure technicals focussing on anything above a 3% yield.  21 buy signals out of the 56 stocks (which is quite high).  However, some signals are a bit old and a number just cropped up today (so could change).  Sectors with the highest hits (>50%) are: Gas, Water & Multi-Utilities; Mining; General Retailers!; Non-Life Insurers; and some others where there is only one company in the sector.  Need to do a fundamental screen on the shortlist now and then off to the FTSE250.  Then maybe splash some cash!

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16 minutes ago, M.C. UK said:

@Harley  interesting idea...
 

https://www.investopedia.com/ask/answers/09/permanent-portfolio.asp

Has anyone (on this thread) tried this in real life to comment on its effectiveness?

M.C.

 

 

Spent a lot of time on this to find something fitting my personal circumstances. 

It's limited to my "floor" retirement fund (use an income portfolio, etc for the "upside") with a focus on asset protection.

Way I see it, most money is gained or lost on the correct (for your personal circumstances) asset allocation first, and then the specifics second.

This is a good resource to review portfolio performance:  https://portfoliocharts.com/british-portfolios/

Tailoring for a UK resident a bit tricky (especially on the bond side).

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I can't remember who mentioned Lars Kroijer and his two element portfolio (treasury bonds and global passive index), @Admiral Pepe perhaps? I had a look at his youtube channel - https://www.youtube.com/channel/UC1RYKuzT6ic2KYCKWQsScDw - and there are some interesting ideas there. The thing that I found most useful was his series on developing a financial model spreadsheet. I thought I was pretty good in Excel but there were some things there that I'd never come across before, e.g. use of data tables to run what if iterations of the spreadsheet. 

I've adapted his model to suit my circumstances and according to the model I should be completely out of equities now if I want to meet my goals. Something for me to think about.

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45 minutes ago, Wheeler said:

I can't remember who mentioned Lars Kroijer and his two element portfolio (treasury bonds and global passive index), @Admiral Pepe perhaps? I had a look at his youtube channel - https://www.youtube.com/channel/UC1RYKuzT6ic2KYCKWQsScDw - and there are some interesting ideas there. The thing that I found most useful was his series on developing a financial model spreadsheet. I thought I was pretty good in Excel but there were some things there that I'd never come across before, e.g. use of data tables to run what if iterations of the spreadsheet. 

I've adapted his model to suit my circumstances and according to the model I should be completely out of equities now if I want to meet my goals. Something for me to think about.

Yes that was I, although there are a few of us that have mentioned him. I to followed/adapted the finanical model, it was very informative and enlightening. For someone who is pretty handy at excel like myself I also learnt a thing or two. A great video series!

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7 hours ago, kibuc said:

Newgold - now that's what I call a dead parrot.

It's up 20% today after yesterday's results.  Could be short covering after their consensus beating 0.00 EPS. ( -0.02 predicted ).  The earnings report suggested increased productivity, so it's possible they could turn around here, or maybe not.  I'm still down 60% on my small holding ( currently £400 worth ) so not sure whether it's worth selling or just holding on at this point. 

Then again that'll pay for a separate set of road wheels for my mountain bike, which may be a better "investment" in my health.

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30 minutes ago, MvR said:

It's up 20% today after yesterday's results.  Could be short covering after their consensus beating 0.00 EPS. ( -0.02 predicted ).  The earnings report suggested increased productivity, so it's possible they could turn around here, or maybe not.  I'm still down 60% on my small holding ( currently £400 worth ) so not sure whether it's worth selling or just holding on at this point. 

Then again that'll pay for a separate set of road wheels for my mountain bike, which may be a better "investment" in my health.

I think it shows how little expectation the market had for them. Mind you, they also jumped 20% or so on Adams appointment - I understand he's highly revered, but nothing (bar Tesla) should jump 20% on CEO change. It gave back all those gains pretty quickly.

It was a loss-making quarter at the time when they need to make money. I'm waiting this one out.

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I’ll be giving the new guy a chance to turn things around, mainly because I have a similarly small position which I would like back but it’s a learning experience. They needed to turn a profit but he’s only been there 6 weeks. What they achieve in Q4 will be telling, although events might over take them, who knows. Plus, it’s a wild ride and I like that :D

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Democorruptcy
7 hours ago, sancho panza said:

WPP peaked in May 2017......Fundamentyally,is WPP- and I don't have the answer-equipped to survive in a world where online advertising via FB et al predominates?

Article that mentions that:

Quote

 

WPP’s chief executive, Mark Read, is struggling to steady the ship after the abrupt departure of its founder, Sir Martin Sorrell.

In addition, he is fighting to re-engineer the sprawling group as the digital advertising power of Google and Facebook grows, and advertisers increasingly question the benefits of giving their marketing spend over to traditional global holding companies such as WPP and Omnicom.

https://www.theguardian.com/business/2018/oct/19/wpp-no-longer-worlds-most-valuable-ad-firm-share-price-falls

 

 

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Anyone think the selling is over for this wave at least? Been a sizeable correction so far globally but most of the uncertainty and noise around US mid-terms is probably behind us now and November to March is traditionally a strong seasonal period for the market. I expect gold and silver to pull back as the market goes risk on again to first quarter next year. Notwithstanding that I think we have seen the top for this 8-9 year cycle in US U.K. and EU stocks and rallies will be sold as liquidity dries up and lower highs become the norm. Housing wherever you look US HK Oz UK seems to have topped out with the builder shares leading the respective housing markets down. 

£:$ back for another test of the 1.27 area think it will hold this year but break it for good next year when I expect that support to become long term resistance.

interesting times for sure - I wonder what sectors in the FTSE will break down when the bear gets going again? Banks, insurance and energy would be high on my list.

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2 hours ago, Festival said:

Anyone think the selling is over for this wave at least? Been a sizeable correction so far globally but most of the uncertainty and noise around US mid-terms is probably behind us now and November to March is traditionally a strong seasonal period for the market. I expect gold and silver to pull back as the market goes risk on again to first quarter next year. Notwithstanding that I think we have seen the top for this 8-9 year cycle in US U.K. and EU stocks and rallies will be sold as liquidity dries up and lower highs become the norm. Housing wherever you look US HK Oz UK seems to have topped out with the builder shares leading the respective housing markets down. 

£:$ back for another test of the 1.27 area think it will hold this year but break it for good next year when I expect that support to become long term resistance.

interesting times for sure - I wonder what sectors in the FTSE will break down when the bear gets going again? Banks, insurance and energy would be high on my list.

A lot of the Elliott Wave folks seem to be predicting a final blow off top to commence around now as things looking very technically oversold (apparently), bumping up to 2900-3300 by Dec/Jan, then we get our more solid downward trend. Everything down in the deflationary bust next Summer.

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5bd1851694cd1513c8baaa9d

Latest from Armstrong's private blog:

What is going on is we are approaching not just the Pi Target here on the Economic Confidence Model  21 Nov 2018, but this is also a MAJOR Convergence of FOUR models/cycles all coming together at the same time. This Pi Target tends to be POLITICAL in nature so it can be extremely important.

The Monthly Bearish (i.e. closing the last trading day of the month) that would signal a bear market into 2020 with a flip out back up thereafter into 2032 would be indicated by a Monthly Closing below 21600. So far, there is nothing implying that pattern just yet.

The greatest confusion is trying to comprehend the market performance. NORMALLY, in a stock market crash, you have the Flight to Quality which is to bonds. But this time, we have government in trouble. We also have interest rates closer to a 5000 year historic low. We have Italy's budget being rejected in Brussels and the entire bond markets in Europe have become illiquid. 

We are at a crossroads here where capital will be confronted by insanity. This appears to be setting up for the biggest bear-trap perhaps in history. This is when we need the computer more than ever to pierce through the veil of emotions to reveal the true trend.

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39 minutes ago, azzuri82 said:

AMZN after hours xD

Black Friday tomorrow? (the stock crash one not the discount sales one)

Seriously don't have a clue one minute to the next what direction things are heading at the moment, exciting.

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Inoperational Bumblebee
11 hours ago, M.C. UK said:

@Harley  interesting idea...
 

https://www.investopedia.com/ask/answers/09/permanent-portfolio.asp

Has anyone (on this thread) tried this in real life to comment on its effectiveness?

M.C.

Are there not a number of us on this thread effectively doing so? US treasuries, PMs, reflation stocks and some cash while waiting for the big one?

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23 minutes ago, Inoperational Bumblebee said:

Are there not a number of us on this thread effectively doing so? US treasuries, PMs, reflation stocks and some cash while waiting for the big one?

We are. At least, I am. Holding goldies, Reflation stocks, some IBTL and some cash...

...not trusting ETFs and can’t understand how the feck Netflix is still in business. But here we are...

...so still no sign of a flight to quality...nothing seems to make sense out there at the moment. 

Viceroy many thanks for the update. Seems MA is guiding towards DOW stocks as the quality thing to hold in the coming drop in confidence his model predicts shortly.

Do you think that’s his idea of the Trade of the Century? the Dow 30 is The Flight To Quality? 

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9 hours ago, Barnsey said:

A lot of the Elliott Wave folks seem to be predicting a final blow off top to commence around now as things looking very technically oversold (apparently), bumping up to 2900-3300 by Dec/Jan, then we get our more solid downward trend. Everything down in the deflationary bust next Summer.

Interesting Barnsey

i follow Tony Caldaro one of the Elliott Wavers he thinks the top is in on the US indices and is calling a relatively shallow correction down to about 2100 in the S&P. I think it will be deflationary rather than stagflation too much debt in the system but the trigger could still be a run up in oil prices. Either way it difficult to see how asset prices can keep going much further with the amount of leverage about.

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11 hours ago, Barnsey said:

A lot of the Elliott Wave folks seem to be predicting a final blow off top to commence around now as things looking very technically oversold (apparently), bumping up to 2900-3300 by Dec/Jan, then we get our more solid downward trend. Everything down in the deflationary bust next Summer.

This is how I see it going, except I think the final drop will come in the Spring...how do I know?..charts?...in-depth study?...no, just a guess from an outsider sitting on the edge and looking in!...now all I have to do is to consider/sort the thoughts on this post, decided on how to protect my funds, and then put it into action before it's too late!

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Democorruptcy
9 hours ago, Barnsey said:

Black Friday tomorrow? (the stock crash one not the discount sales one)

Seriously don't have a clue one minute to the next what direction things are heading at the moment, exciting.

I thought it might be FTSE up today but never know which way it's going at the moment.

On sorted by % change only 5 up https://www.hl.co.uk/shares/stock-market-summary/ftse-100/heat-map?sort=change

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Looking bit ugly out there this morning, just like the weather, a Globally synchronized risk-off run into the weekend. Much of it driven by futures in the U.S. (as always)

- Amazon pre-market still around -10%, Google -7.5% :ph34r:

- RBS first UK bank to come out warning of "uncertain economic outlook"

- Worst month for Europe (Stoxx600) since August 2011, MSCI all countries worst month since May 2013 :ph34r::ph34r:

- USDCNY now at 6.96, Chinese willing to throw everything at it to prevent the break through 7.0 :ph34r::ph34r::ph34r:

The signs are all there, momentum building, do we collapse now or miraculously find temporary respite?

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19 hours ago, Lavalas said:

I’ll be giving the new guy a chance to turn things around, mainly because I have a similarly small position which I would like back but it’s a learning experience. They needed to turn a profit but he’s only been there 6 weeks. What they achieve in Q4 will be telling, although events might over take them, who knows. Plus, it’s a wild ride and I like that :D

I gave them a second look yesterday, but it takes some suspension of disbelief to make the math work. It's all about debt. They owe:

500mln @6.25% maturing in Nov 2022

300mln @6.375 maturing in May 2025

around 100mln in revolving credit facility (out of 400mln available) until Dec 2021.

We're talking about 50mln+ p.a. in interest alone, plus the necessity to cough up 500mln four years from now. They already sold Mesquite at knock-down price. They sure as hell won't sell Rainy River. They might be forced to sell New Afton - maybe that's their play? On the call, Adams was talking about development plans in Afton penciled in for 2019, financed internally. If they can pimp it up and then sell, it might save them from costly refinancing or issuing new shares in 2022.

On the production side of things, Rainy River production was 55koz for the period but that includes 5-day break in mill operations, which they used to improve the process and it resulted in 25koz in Semptember alone. That is very good news. With further refinement to the process both in mining and milling, we could be takling about 320-350koz from Rainy River alone. With New Afton hitting higher grades in 2019, we could be talking about up to 450koz p.a.. The entire earnings call was focused on improving the process and bumping production asap. I have very little doubt that Adams will make Rainy River operate at full capacity.

BUT that will take money, and that means utilizing their revolving credit facility, as opposed to repaying what they already owe. Seriously, how are they gonna tackle that? Huge gold bull and full cash repayment, or medium bull and New Afton sale - both options depend on favourable market conditions and leave very little room for dividends.

To understand how much of a burden their debt truly is, consider this:

In Sep they were producing at 380koz p.a. rate and that should be easily sustainable. Could get to 420-450koz in 12 months. Their market cap two days ago was roughly 400mln.

Wesdome is producing 80koz p.a., with a plan to get into 175-200koz range in 12-18 months - if they can restart Kiena without hikkups. Their market cap two days ago was roughly 400mln. The catch? Wesdome has no debt.

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Im holding off on buying anything for the minute, own a few miners which most are up, Centrica up a tiny amount but Vodafone been buying in stages since 1.90 currently around 1.46

 

Gold and silver in bullionvault might get some more of in time

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I'm currently staircasing in; world index trackers, FTSE HYP/reflationary stock, gold etc/miners etf. Vod getting a few more purchases than I would probably like xD but got my plan, sticking to it. Planting the seeds, not for today or tomorrow, but in ten years and beyond. Looks like the party is just getting started. Will the papers be writing  some scary headlines or will they stick wit the distracting stories?

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