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Credit deflation and the reflation cycle to come.


DurhamBorn

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I've had a very 'crash protection' small portfolio for a while now, where the investments are designed to perform once a meltdown starts.  Small gold miners, inverse ETFs, etc.  It's tracked sideways and slightly down for 2-3 years now, but is designed to counterbalance the risk that when GFC 2 hits my main income will probably dry up overnight, as happened last time.

I'm noticing some big spikes and drops in some of these 'crash insurance' investments.  Haven't seen that for a while.

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Bricks & Mortar
11 hours ago, sancho panza said:

Think it's nailed on.I'm a big fan of talking to people and watching tills in shops.Contacts in the building trade are themselves saying 'it's going 2008 all over again'.One good friend delivers plasterboard.Second round of the day has been cancelled.He's dropping supplies onto supplies he dropped off two weeks before on some sites as they've jsut stopped building.There's a reason the builders have had a big sell off here.Sales bloke for Taylor Wimpey openly saying to my contact that a downturn was needed to get day rates back under control 

 

Some of the building insiders on here eg @Bricks & Mortar might be able to confirm or deny this(I'm not sure B&M is currently in building game) 

I am still in the game - but not as connected as I used to be.   I quit working for larger building firms after I worked out a job in the sector is only as good as the next recession.  So, I run a small business now.  Mostly repairs and maintenance - essential stuff like roofs.  And we're in a rural area - quite far from the cities.  My main thinking was proofing against recession.   So far, it's not been as lucrative - but I reckon it's about to have its day in the sun.

Day rates have been going up.  There seems to be a labour shortage.   Noted a Polish construction boss complaining of 10% year-on-year increase in labour rates in his country.  Imagine that, coupled with the exchange rate, and brexit fears, have been tempting Polish workers home.

Plenty of work in my local repair & maintenance sector.  More than we can handle, and same story from other builders I meet at the merchants, or sandwich truck.- So, I suppose I'm not seeing a downturn.  Not that I'd expect to.  Not until 3 months after it appeared on the 6 o'clock news.  (I expect our geographical area to also lag behind any recession)

Have noticed the merchants, the national ones, are all getting tighter with their invoicing.  They're on the phone immediately if their invoice isn't paid, threatening to cut supply or get legal.  They used to leave that until the next month (for wee businesses like us, with accounts in the hundreds, rather than millions).

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33 minutes ago, Bricks & Mortar said:

They used to leave that until the next month (for wee businesses like us, with accounts in the hundreds, rather than millions).

Yep, also noticed how quick they are to invoice now.

1 hour ago, wherebee said:

I've had a very 'crash protection' small portfolio for a while now, where the investments are designed to perform once a meltdown starts.  Small gold miners, inverse ETFs, etc.  It's tracked sideways and slightly down for 2-3 years now, but is designed to counterbalance the risk that when GFC 2 hits my main income will probably dry up overnight, as happened last time.

I'm noticing some big spikes and drops in some of these 'crash insurance' investments.  Haven't seen that for a while.

Interesting.  So the inverse ETFs has not lost money over time just by being one (i.e. like commodity derivative based ETFs)?

Care to share more on the holdings?

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1 hour ago, MrXxx said:

Problem is you are looking through the rear view mirror but the road ahead is through the windscreen. 

Eh?

 

3 hours ago, Cattle Prod said:

some OIH,

You can by that ETF in the UK, given KIDs?  Or by other means?

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38 minutes ago, Harley said:

Yep, also noticed how quick they are to invoice now.

Interesting.  So the inverse ETFs has not lost money over time just by being one (i.e. like commodity derivative based ETFs)?

Care to share more on the holdings?

No, they have gone down, but not a huge amount and I look on it as paying an insurance policy.  You don't mind paying a bit each quarter because if you REALLY need it, the upside is big.  Plus, if I end normal employment and are not exposed on that income side any more to the global economy, I'll sell at a loss and bank the loss against income for that year.

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11 hours ago, Cattle Prod said:

Like DBs commemt on gold, oil at $20 will only last a few months, if at all. Supply is simply too tight, unless demand falls off a cliff. Which it won't, unless they opt for Great Depression 2 rather than reflation. In the last week Ive added to BP and Shell in my income portfolio, some OIH, 2 juniors at all time lows I like and a small punt on WTI for the OPEC meeting (most of my position was stopped out, thanks Trump you almighty prick). One thing I got from the "Saudi Inc" book I'm reading is thst the wider Saudi family have repeatedly thrown each other under the bus over the years if the money flow was threatened. MBS is not bulletproof, internally, even if Trump thinls he cornered him. They will cut, significantly, no matter how soft the announcement is.

Not least because they are currently damaging their reservoirs and can only sustain this rate for months! I still can't believe smart traders or bots haven't acted on Saudi and Opec admitting they are pumping at full capacity. First time ever. Must be because they believe in spare capacity in the US, which isn't true either. Ah well.

 

PM's are highly sensitive to the oil price through inflation, the miners were not doing quite so well last week, which surprised me, even though the metals were well bid.  It makes sense if they are pricing in lower inflation due to abundant oil, either due to recession on demand side of pumping on supply.

I guess MBS considers the long term pain of damaged reservoirs to be a better choice than the short term pain of having Trump breathing down his neck over Khashoggi and the family standing behind him with daggers!

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8 hours ago, Harley said:

Eh?

 

You can by that ETF in the UK, given KIDs?  Or by other means?

The point I was making is that you were talking about PAST performance of certain ETF`s and considering them based on this as a FUTURE investment.

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8 hours ago, wherebee said:

No, they have gone down, but not a huge amount and I look on it as paying an insurance policy.  You don't mind paying a bit each quarter because if you REALLY need it, the upside is big.  Plus, if I end normal employment and are not exposed on that income side any more to the global economy, I'll sell at a loss and bank the loss against income for that year.

So is this ETF not just performing the same as a handful of miners and a bit of solid (gold) would do?

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I’m not sure whether we’ll get that Santa rally. The CFO of Huawei has been arrested in Canada and is to be extradited to the US. The markets don’t like it. FTSE 100 now lower than it’s 1999 dotcom peak.

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1 hour ago, Castlevania said:

I’m not sure whether we’ll get that Santa rally. The CFO of Huawei has been arrested in Canada and is to be extradited to the US. The markets don’t like it. FTSE 100 now lower than it’s 1999 dotcom peak.

I phoned yesterday to get my pension payments from my new job changed from "world growth" to cash.I dont think il be in the job long and whatever is in the pension will be moved into my SIPP,the forms will go in the day i leave.Although the top of the tech boom isnt the best place to start for us,it does show how terrible the UK market has done.Of course if you were averaging in over that time and re-investing dividends you would be well up.

Of course everything (almost everything) is going to plan for everyone on this thread.We side stepped most of the loses,and all i want now is a big miner rally.

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1 hour ago, Castlevania said:

I’m not sure whether we’ll get that Santa rally. The CFO of Huawei has been arrested in Canada and is to be extradited to the US. The markets don’t like it. FTSE 100 now lower than it’s 1999 dotcom peak.

Like I said a couple days ago, be careful, this is violent :ph34r:

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11 hours ago, wherebee said:

No, they have gone down, but not a huge amount and I look on it as paying an insurance policy.  You don't mind paying a bit each quarter because if you REALLY need it, the upside is big.  Plus, if I end normal employment and are not exposed on that income side any more to the global economy, I'll sell at a loss and bank the loss against income for that year.

Ta.  A small loss is fine.  Like an insurance premium as you say.  But thought I could only do that with options.  I'll look to see what's available ta.

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16 minutes ago, Barnsey said:

Like I said a couple days ago, be careful, this is violent :ph34r:

Four up in the FTSE,fags,gold and utilities xD,.Unless you have strong free cash flow,this market will butcher you.The key is will the Fed now talk about stopping tightening etc (even if it is talk) and then take the US markets up one last time.?.Can gold run to $1500 and the GDX to $38 before this market really tanks.?.The bear market in a lot of UK stocks has been incredible already.The amount down between 50% and 70% from their highs is very large indeed.Some could be looking at 80% falls before this bottoms.Im starting ladders again today in Imperial Brands.

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8 minutes ago, DurhamBorn said:

.Im starting ladders again today in Imperial Brands.

Good lad, I need some company!  Thinking the poor old FTSE may, selectively,  just have its day!  But again, need to be picky (no tracker for me). 

Pretty ideal for us souls in that all this is the best of a bad bunch.  AsiaPac doing all right though so worth keeping a broad and open mind.

I'm happy with my income portfolio as it gets tested.  The ups and downs are a bit harsh but needs to be worn in like a pair of new shoes. 

I could probably take a 20% fall on the already beaten ones I have which may be a worse case but will now look at hedging to cushion that.  The wrong thing to do for me would be to buy this stuff for the long term and then bail too soon.

Yep, cash flow is key - will sort out the fake high div players from the golden ones, assuming they don't cut their divs to buy up the fallen!

Anyways, this board is in the right place at the right time!

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Just now, Harley said:

Good lad, I need some company!  Thinking the poor old FTSE may just have its day!

I owned Imperial from when i was at school.The first share i bought was Hanson Trust (who owned Imperial).Imperial paid my house off roughly over the years with divis.I sold it after a couple of decades near its highs (and BAT) and miss the old girl.If i was forced to track one market with monthly pension savings averaging,it would be the FTSE from here.

Id really like the miners to run though Harley while this market continues lower.

 

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4 hours ago, MrXxx said:

The point I was making is that you were talking about PAST performance of certain ETF`s and considering them based on this as a FUTURE investment.

Ok, yes, sincerely, always good to be reminded of that trap. It was that the guy had mentioned income and value based equities rather than the growth ones going forward and I had never really looked at value ones before and had assumed them to be poor performers. OK though, as a fund manager, he would say that!

What I did was to look at the ETF performances in terms of overall gain, volatility, etc and found they scored quite well.  But more importantly, I looked at what stocks they held (with a view to buying direct).  I was very happy not to see the FANGS, etc. 

So I thought maybe those ETFs were being almost actively managed (using screens) and adding cheap alpha.  More work but a new area for me than just growth versus income. 

Of course when to buy is another question!

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3 hours ago, Castlevania said:

I’m not sure whether we’ll get that Santa rally. The CFO of Huawei has been arrested in Canada and is to be extradited to the US. The markets don’t like it. FTSE 100 now lower than it’s 1999 dotcom peak.

Yeh, go Canada! Volatility is our friend, whether trading or buy cheap to hold.  Like Buffet's tide going out! 

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2 hours ago, DurhamBorn said:

Of course everything (almost everything) is going to plan for everyone on this thread.We side stepped most of the loses,and all i want now is a big miner rally.

I’ve been averaging into miners and have had bigger losses percentage wise than my index trackers so far. Maybe I’m just bad at choosing them

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2 hours ago, DurhamBorn said:

all i want now is a big miner rally.

Well I'm sure after your work here you're on Santa's good boy list but I'll let him know just in case!

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30 minutes ago, Sound Money said:

I’ve been averaging into miners and have had bigger losses percentage wise than my index trackers so far. Maybe I’m just bad at choosing them

Your not alone, my miners are bottomed out at the minute and its a waiting game (like last time) till they head higher again.  Cost of production limits falls from here, gold may go back to $1200 but like last time I don't think it will spend long there.

Meanwhile on the oil front....

 

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On 25/11/2018 at 21:07, Barnsey said:

Jobs market is red hot, but much of this based on lagging data, I think the initial jobless claims are going to start ticking up. If Powell doesn't squeeze in another hike in January then that could well be it for this cycle. March seems optimistic, and generally history tells us that when the Fed decide to "pause", it means "stop".

November APD private sector payroll numbers actual +179k vs consensus estimate of +195k, Oct revised down to +225k from +227k

Initial jobless claims actual 231k vs 225k estimate

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10y rates in freefall. Gold catching a bit of a bid. My reading is that markets are clearly thinking the Dec rise might be the last one for a long time.

Then again, we've seen a few headfakes already in the last couple of month, so I'm trying not to get too excited.

In the meantime, WDO release an absolute peach of an update from Eagle River, and we're still to get Kiena drilling results and resource update later this month. With this one I'm fully allowing myself to feel excited and I'm not planning on holding back ;)

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Very pleased with only being down about 1% since thread started... learned a lot so thanks again to all.

Here is a stupid question so apologies - but could somebody advise me- I can’t figure out which date means what for dividends.

Say you hold shares in Centrica. What are the technical names of the dates you need to own them from and until to qualify for that next divi?

*apologies again just really can’t find it anywhere in civilian language!

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1 minute ago, Thorn said:

Very pleased with only being down about 1% since thread started... learned a lot so thanks again to all.

Here is a stupid question so apologies - but could somebody advise me- I can’t figure out which date means what for dividends.

Say you hold shares in Centrica. What are the technical names of the dates you need to own them from and until to qualify for that next divi?

*apologies again just really can’t find it anywhere in civilian language!

Once a company goes ex dividend you dont get the dividend.Royal Mail has gone ex dividend today so before the market opened they were ex dividend,so before the market opened the shares would be in the order book minus the 7.9p dividend or whatever it is.Anyone buying last night would get the dividend,but of course the shares almost always go down the next day the dividend.

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Democorruptcy
25 minutes ago, Thorn said:

Very pleased with only being down about 1% since thread started... learned a lot so thanks again to all.

Here is a stupid question so apologies - but could somebody advise me- I can’t figure out which date means what for dividends.

Say you hold shares in Centrica. What are the technical names of the dates you need to own them from and until to qualify for that next divi?

*apologies again just really can’t find it anywhere in civilian language!

If you look on HL at a share page eg CNA, then select the Dividend tab then select Full Dividend Breakdown there are details next to each date, e.g. ex-dividend, payment

https://www.hl.co.uk/shares/shares-search-results/c/centrica-plc-ord-6,1481p/dividends

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