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Credit deflation and the reflation cycle to come.


DurhamBorn

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45 minutes ago, Ash4781b said:

https://www.theguardian.com/business/2018/dec/21/uk-car-manufacturing-output-falls-by-a-fifth-as-demand-slumps

“UK car manufacturing output falls by a fifth as demand slumps

Production declined by 19.6% in November, which is biggest year-on-year drop since 2008”

Grim

It is extraordinarily dangerous to report stuff like this only by year-on-year %age change.  Looking at the figures there appears to have been a stimulated output that is now normalising, rather than a collapse in a well established manufacturing capability.

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34 minutes ago, Democorruptcy said:

How do we make money out of the Gatwick drone? Chaos is opportunity.

This attack might not be the last. Go short a drone maker, drone supplier, airline, holiday firm etc.? Go long a tech firm to combat them. 

the airlines will loose.local hotels will profit.

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@DurhamBorn

Im starting to suspect that the PM's/miners are going to fall into the deflation as you originally theorised might happen, I wasn't happy with how they are responding to this rise in prices,  ESPECIALLY the more leveraged ones (looking at you SBGL and HMY...).  Then i noticed yesterday that Chris Aarons had a new video out with some interesting points, the miners price in the future and they are not painting a pretty picture for PM's yet.

 

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4 hours ago, A_P said:

I'm looking to do exactly the same, 10 year fix just outside Belfast. Have you had an offer accepted? If so how did the negotitions go and what discount if any did you get if you dont mind me asking?

We are currently forumlating and getting ready to submit an offer but I don't think it will be very well recieved xD. However the house(s) we are interested in have been on the market for a long time now and sellers seem a little distressed/panicy that they've already had to reduce and still not getting many bites

Sounds like we are in the same boat A_P. I agree there are houses all over here that have now been sitting a long time on the market. Empty or with one old retired person in them all expecting a lottery win size amount for their place. Without a shock to the system it’s a dilemma but it’s either buy something or keep renting which is not good for the family.

 Well we saw 2 today and the first turned out to be very out of date inside that needs new heating, bathrooms, kitchen and the windows and roof look a bit dodgy with missing tiles. I think if they took 10-20% off you’d then have to find it out of monthly earnings to replace them. Thought about offering 10% off because 20% they seem to be in no rush to lower their prices so far despite the long time on the market so the sellers must be solvent so far.

The second was an oul lad in a cozy bungalow but again it would need work but not as much.

 Both have had no offers and been on a while. There’s another one that might suit but we can’t get to view until the old lad in it who wants to downsize gets back after Christmas. It doesn’t look like it would need any work done to it inside or out so monthly cash to fix it up over the mortgage might not be needed so much.

Herself says let’s hold off let them stew with no offers and have a think in the new year because then Brexit is really looming for the sellers. I think she’s right. 

The second lad was very panicky I think about no offers. 

 

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40 minutes ago, Option5 said:

OK guys, quick straw poll, my new contract for 2019 gives me the option of being paid in GBP or NOK (Norwegain Kroner), I'm leaning towards NOK, any opinions?

Oil’s on the slide, which isn’t good for NOK. GBP’s already on the ropes, and realistically the only big downside is the prospect of a Corbyn government. So GBP to outperform NOK. Clearly don’t take the above as advice, but as one’s opinion. I’m not going to go out and buy GBP and sell NOK.

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Eventually Right
3 minutes ago, Castlevania said:

Oil’s on the slide, which isn’t good for NOK. GBP’s already on the ropes, and realistically the only big downside is the prospect of a Corbyn government. So GBP to outperform NOK. Clearly don’t take the above as advice, but as one’s opinion. I’m not going to go out and buy GBP and sell NOK.

I'd agree with that-I think much of the potential downside from Brexit is built into Sterling's current price.  But again-don't take that as advice.

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13 minutes ago, Castlevania said:

Oil’s on the slide, which isn’t good for NOK. GBP’s already on the ropes, and realistically the only big downside is the prospect of a Corbyn government. So GBP to outperform NOK. Clearly don’t take the above as advice, but as one’s opinion. I’m not going to go out and buy GBP and sell NOK.

 

8 minutes ago, Eventually Right said:

I'd agree with that-I think much of the potential downside from Brexit is built into Sterling's current price.  But again-don't take that as advice.

That was my thinking, but as the Norwegian Sovereign Weath with a value of aTrillion dollars fund owns half of the western world I figured that the currency would be somewhat cushioned from the ups and downs. I'll have a think over Christmas......

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6 hours ago, Majorpain said:

@DurhamBorn

Im starting to suspect that the PM's/miners are going to fall into the deflation as you originally theorised might happen, I wasn't happy with how they are responding to this rise in prices,  ESPECIALLY the more leveraged ones (looking at you SBGL and HMY...).  Then i noticed yesterday that Chris Aarons had a new video out with some interesting points, the miners price in the future and they are not painting a pretty picture for PM's yet.

 

They will,and hard,but i still think they run up first.Nothing is ever certain,but i still see gold around $1500 before this bear then sucks in the PMs too.The miners are hated and are a small,contrarian sector.They have ran up 20% then fallen again several times and nobody trusts them.Its a very very difficult time to structure a portfolio at the moment as its highly likely everything you are buying into keeps going lower.However thats why iv always used ladders and always will.Stocks im buying i have ladders set up for are mostly already down 50% to 70% from their highs (a couple 35% to 40%).In the gold space 90% sometimes.If im buying a stock for the next cycle i dont really care if my first ladder ends up underwater by 30% as that means i should get all ladders deployed.If the stocks im buying all hit their bottom ladders (and id be then down around 15% excluding dividends) then most would be down 70% to 90% from their highs.These are all companies who have managed to keep decent free cash flow right at the end of a cycle that was against them.

Iv started a new ladder again today in BAT tobacco.I didnt think id own BAT again after selling out close to its highs (£48) after owning for 20 years.Return on that in the 1000s% including divis.Iv set up ladders from £25 (half what i sold at give or take) down to £17.

Once my ladders are in place i ignore the market.I simply buy when prices hit.Stagecoach hit one today and some were bought.Royal Mail hit a one yesterday a few were bought.Last week Imperial etc.

I would love the PMs to do what i think they will (GDXJ $60+) though as that would provide extra capital to deploy into chosen areas,time will tell.

 

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1 hour ago, Option5 said:

 

That was my thinking, but as the Norwegian Sovereign Weath with a value of aTrillion dollars fund owns half of the western world I figured that the currency would be somewhat cushioned from the ups and downs. I'll have a think over Christmas......

Depends what they own though and where the valuation of that goes, counter to that is what happens to their country's debt and economy when stressed. Looking at a few web prognostications they have not a clue either with predictions looking flat, so basically who knows. Shame can't do 50/50.

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Democorruptcy
2 hours ago, Option5 said:

OK guys, quick straw poll, my new contract for 2019 gives me the option of being paid in GBP or NOK (Norwegain Kroner), I'm leaning towards NOK, any opinions?

I'd be thinking about what I was going to use this income for and how much I had already owned in each. Living costs now are different to using it to buy an asset in one of those countries/currencies in the future.

Re just GBP or NOK in the short term it might be a bet on the outcome of the Brexit referendum? GBP plunged on the Brexit vote - but will the vote stick? If we do a deal is that priced in by the Brexit vote plunge or does GBP go lower if we actually do it or go higher due to less uncertainty. If we Brexit no deal then will the BoE move interest rates, up or down? If we abandon Brexit, delay it to call a second referendum, then will GBP go up?

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25 minutes ago, Democorruptcy said:

I'd be thinking about what I was going to use this income for and how much I had already owned in each. Living costs now are different to using it to buy an asset in one of those countries/currencies in the future.

Re just GBP or NOK in the short term it might be a bet on the outcome of the Brexit referendum? GBP plunged on the Brexit vote - but will the vote stick? If we do a deal is that priced in by the Brexit vote plunge or does GBP go lower if we actually do it or go higher due to less uncertainty. If we Brexit no deal then will the BoE move interest rates, up or down? If we abandon Brexit, delay it to call a second referendum, then will GBP go up?

Well most of my living costs will be in NOK so my thinking was that I should get paid in NOK to avoid any nasty surprises.

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18 minutes ago, Option5 said:

Well most of my living costs will be in NOK so my thinking was that I should get paid in NOK to avoid any nasty surprises.

Makes most sense then to be paid in NOK, then may dripfeed NOK to GBP for any excess, but just do 50% and keep the other 50% in NOK, that way you are hedging your bets on any movements and presume you are getting a decent rate anyway and just looking to protect value rather than speculate for maximum gain.

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1 minute ago, onlyme said:

Makes most sense then to be paid in NOK, then may dripfeed NOK to GBP for any excess, but just do 50% and keep the other 50% in NOK, that way you are hedging your bets on any movements and presume you are getting a decent rate anyway and just looking to protect value rather than speculate for maximum gain.

That was pretty much my plan.

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31 minutes ago, Option5 said:

Well most of my living costs will be in NOK so my thinking was that I should get paid in NOK to avoid any nasty surprises.

In which case get paid in NOK. 

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Democorruptcy
46 minutes ago, Option5 said:

Well most of my living costs will be in NOK so my thinking was that I should get paid in NOK to avoid any nasty surprises.

I'd go for NOK then. Then if you want to hedge your bets move some surplus to GBP if you might have a use for some in the future.

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2 hours ago, DurhamBorn said:

They will,and hard,but i still think they run up first.Nothing is ever certain,but i still see gold around $1500 before this bear then sucks in the PMs too.The miners are hated and are a small,contrarian sector.They have ran up 20% then fallen again several times and nobody trusts them.Its a very very difficult time to structure a portfolio at the moment as its highly likely everything you are buying into keeps going lower.However thats why iv always used ladders and always will.Stocks im buying i have ladders set up for are mostly already down 50% to 70% from their highs (a couple 35% to 40%).In the gold space 90% sometimes.If im buying a stock for the next cycle i dont really care if my first ladder ends up underwater by 30% as that means i should get all ladders deployed.If the stocks im buying all hit their bottom ladders (and id be then down around 15% excluding dividends) then most would be down 70% to 90% from their highs.These are all companies who have managed to keep decent free cash flow right at the end of a cycle that was against them.

Iv started a new ladder again today in BAT tobacco.I didnt think id own BAT again after selling out close to its highs (£48) after owning for 20 years.Return on that in the 1000s% including divis.Iv set up ladders from £25 (half what i sold at give or take) down to £17.

Once my ladders are in place i ignore the market.I simply buy when prices hit.Stagecoach hit one today and some were bought.Royal Mail hit a one yesterday a few were bought.Last week Imperial etc.

I would love the PMs to do what i think they will (GDXJ $60+) though as that would provide extra capital to deploy into chosen areas,time will tell.

 

Crazy to think but BAT has been the biggest faller in the FTSE100 this year (down 48% according to an article I just read in the Evening Standard). Quite possibly the most multinational company in the world (they kill people in pretty much every country bar I think 4). If it touches £20 then I’m in. 

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Democorruptcy
20 minutes ago, Castlevania said:

Crazy to think but BAT has been the biggest faller in the FTSE100 this year (down 48% according to an article I just read in the Evening Standard). Quite possibly the most multinational company in the world (they kill people in pretty much every country bar I think 4). If it touches £20 then I’m in. 

Today Just Eat and Royal Mail will drop out of the FTSE 100and be replaced by Hiscox and Spirax-Sarco Engineering

Quarterly review

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Bobthebuilder
7 minutes ago, Thorn said:

Put in an offer 10% under the asking today. Mixed bloody feelings. 

Bastard Landlords. 

Its always a difficult decision to make, there is never a "right time", to many factors to consider.

I just accept a house as a pile of bricks with a roof on it that you can eat, sleep and shit in.

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18 minutes ago, Thorn said:

Put in an offer 10% under the asking today. Mixed bloody feelings. 

Bastard Landlords. 

Calm down. Then reflect. 

37 minutes ago, Democorruptcy said:

Today Just Eat and Royal Mail will drop out of the FTSE 100and be replaced by Hiscox and Spirax-Sarco Engineering

Quarterly review

What’s Spirax-Sarco. Never heard of them

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21 minutes ago, Thorn said:

Put in an offer 10% under the asking today. Mixed bloody feelings. 

Bastard Landlords. 

Why mixed? Do you want this particular house or feel like you're being pushed into it?

Feels like it's time for cooler heads to prevail. Will be plenty of opportunity over the next three months as project fear 3.0 gets ramped up. 

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