Credit deflation and the reflation cycle to come.

[A_P]

I'm happy with my two PM funds.

Personally won't be adding any more gold producers but will consitantly add physical as part of a balanced portfolio. Harley's post the other day really hit home/reconfirmed the importance of it long term. Soon as this house it bought I'm keeping very little cash. Cashflow will be done/managed on credit cards. Only an emergency fund in cash.

 

After VOD paid out a div today, what are peoples thoughts on them paying out any further?

[DoINeedOne]

1 hour ago, DurhamBorn said:

I wouldnt invest more of my portfolio as i have strict rules

 

This is something I'm currently working on building a set of rules to stick to whilst investing whilst I'm sure there will be adapted over time as I'm only just getting started I think it would help with sticking to decisions

With work (Advertising) I normally have to track data from Ads and use rules to block or increase bids on Ad placements having rules or a checklist in all things can definitely help cut down on stress and overthinking its just most people use checklists the wrong way

 

An interesting book I read was checklist manifesto mostly about how different industries use checklists to avoid mistakes 

https://www.amazon.co.uk/Checklist-Manifesto-Things-Right-Gawande/dp/1846683149

 

[A_P]

2 minutes ago, DoINeedOne said:

This is something I'm currently working on building a set of rules to stick to whilst investing whilst I'm sure there will be adapted over time as I'm only just getting started I think it would help with sticking to decisions

Well I think for most people they don't get the fundamentals and their overall aims down at the beginning, over-complicating and thus are always behind, chasing their tails. I personally believe most given their portfolio size, should focus their energy on their ideal asset allocation, risk tolerance and choosing their investments. The rest then is just sticking to those allocations, re-balance as necessary and move forward. I suspect most in this thread could easily go with with a Harry Browne style allocation and be done with it and would sleep a little easier at night.

As a newbie my biggest mistake was trying to do too much. HYP, Asset Allocation Portfolio and a few other investments on the side. Especially as the amount of learning and research that all took. In hindsight should have just gone with an asset allocation portfolio and be done with it.

[Barnsey]

A bit dramatic of course, and I normally switch off when anyone is "selling" something, but this is surprisingly a great MUST watch if you haven't seen it already.

[DurhamBorn]

3 hours ago, A_P said:

Well I think for most people they don't get the fundamentals and their overall aims down at the beginning, over-complicating and thus are always behind, chasing their tails. I personally believe most given their portfolio size, should focus their energy on their ideal asset allocation, risk tolerance and choosing their investments. The rest then is just sticking to those allocations, re-balance as necessary and move forward. I suspect most in this thread could easily go with with a Harry Browne style allocation and be done with it and would sleep a little easier at night.

As a newbie my biggest mistake was trying to do too much. HYP, Asset Allocation Portfolio and a few other investments on the side. Especially as the amount of learning and research that all took. In hindsight should have just gone with an asset allocation portfolio and be done with it.

Id agree with that.The only thing id add is i lean my portfolio to the kind of cycle i expect.Not all in,just lean.Iv re-bought BAT and Imperial Brands after selling both near their highs.I dont see them as reflation stocks,but i considered them cheap at the lows.I didnt buy back anywhere near what i sold,they were very large holdings,but iv bought back 20% of what i sold.If im wrong on the kind of cycle ahead i want to under perform,not get hit really hard.

Cycle shifts can be brutal though.I fully expect bonds to get destroyed in the next one for instance.I also expect it will be a distribution cycle in the markets as people liquidate holdings and the inflow isnt enough to keep up as peoples incomes suffer inflation,so less to invest.If it is a reflation then big money will be made in the right assets,but all others will suffer,from being wiped out,to cut down hard versus inflation.

Here in the UK we have two bubbles mostly.Government pensions (and other DB pensions) and house prices.I expect both to be smashed by the cycle,mostly by inflation running hard.I noticed my partner has a very small pension with an old employer.Its max increase is 2.5%.That will be wiped out for instance.Most have 5% max uplifts.10% average inflation for 5 years will soon sort those out and cut a third off them.

[Harley]

5 hours ago, A_P said:

Well I think for most people they don't get the fundamentals and their overall aims down at the beginning, over-complicating and thus are always behind, chasing their tails. I personally believe most given their portfolio size, should focus their energy on their ideal asset allocation, risk tolerance and choosing their investments. The rest then is just sticking to those allocations, re-balance as necessary and move forward. I suspect most in this thread could easily go with with a Harry Browne style allocation and be done with it and would sleep a little easier at night.

As a newbie my biggest mistake was trying to do too much. HYP, Asset Allocation Portfolio and a few other investments on the side. Especially as the amount of learning and research that all took. In hindsight should have just gone with an asset allocation portfolio and be done with it.

I absolutely agree.  The nuance though is the precise form of say the Browne portfolio.  For example, the bonds portion.  I don't really want to be holding bond funds due to the losses that could happen if many investors sold up.  I would rather hold actual bonds to maturity (i.e. have a bond ladder), as I believe it was originally envisaged by Browne, in order to protect against any such price falls.  But while this is doable in the US (e.g. several retail platforms have specific laddering functionality for this), it's harder/not possible in the UK for the retail investor.  I would be happy to hold actual bonds to maturity in such a multi asset portfolio because say the PMs should counter and post inflation bonds falls and the purpose of such a portfolio for me (this being the ultimate key point for each individual to consider) is to preserve capital (say in/close to retirement).  Things might be very different if I was younger.  Likewise for the equity section.  Growth, value, yield, national, or international?  Browne said general US (the portfolio and supporting data was for the US) but the UK does not have such a large market so is it valid, assuming the US is not valid?  This is where I think one of DB's point's and SP's ethos (in name at least) kicks in - to tilt holdings towards the windmills like reflation stocks or whatever your investment objectives (including age, etc) are (e.g. HYP versus growth).  I did the same "mistake" but am pleased I did as I now know why I am investing, what I need said investing to do, and what the risks are.  Blooming hard work but a revelation.  Of course, I keep a small trading portfolio on the side for a little meddling and pin money!!!!

PS:  I would probably be three or four times wealthier if I knew what I do now 20 odd years ago.  But I can say that about a lot of things.  Such is the human condition!

[wherebee]

10 minutes ago, Harley said:

I absolutely agree.  The nuance though is the precise form of say the Browne portfolio.  For example, the bonds portion.  I don't really want to be holding bond funds due to the losses that could happen if many investors sold up.  I would rather hold actual bonds to maturity (i.e. have a bond ladder), as I believe it was originally envisaged by Browne, in order to protect against any such price falls.  But while this is doable in the US (e.g. several retail platforms have specific laddering functionality for this), it's harder/not possible in the UK for the retail investor.  I would be happy to hold actual bonds to maturity in such a multi asset portfolio because say the PMs should counter and post inflation bonds falls and the purpose of such a portfolio for me (this being the ultimate key point for each individual to consider) is to preserve capital (say in/close to retirement).  Things might be very different if I was younger.  Likewise for the equity section.  Growth, value, yield, national, or international?  Browne said general US (the portfolio and supporting data was for the US) but the UK does not have such a large market so is it valid, assuming the US is not valid?  This is where I think one of DB's point's and SP's ethos (in name at least) kicks in - to tilt holdings towards the windmills like reflation stocks or whatever your investment objectives (including age, etc) are (e.g. HYP versus growth).  I did the same "mistake" but am pleased I did as I now know why I am investing, what I need said investing to do, and what the risks are.  Blooming hard work but a revelation.  Of course, I keep a small trading portfolio on the side for a little meddling and pin money!!!!

PS:  I would probably be three or four times wealthier if I knew what I do now 20 odd years ago.  But I can say that about a lot of things.  Such is the human condition!

Youth is wasted on the young is true on every level, and remains true for every generation.

[Lightscribe]

30 minutes ago, Harley said:

PS:  I would probably be three or four times wealthier if I knew what I do now 20 odd years ago.  But I can say that about a lot of things.  Such is the human condition!

Same for me but priorities are different. If you had spoken to me 20 odd years ago about the merits of portfolio allocation, dividends, and financial cycles I would have glazed over (as others do when I talk to them about these matters now). My priorities then we’re simply chasing women... which I wasn’t too bad at I might add.

I also came from a blue collar manual type family (into cars) who didn’t (and don’t) know the first thing in regards to investing, although both my brothers earn more than me and their businesses are doing well, so who am I to say?

I however regularly involve my daughter in finances and show her where her ISA is invested, how finances and savings work and and she is generally quite interested. I’m trying to make sure at least she will have that head start and a bit of knowledge surrounding it that a lot don’t have. It’s a mystical subject to a lot out there who think investing is gambling but fail to see that their own pensions are invested.

[Talking Monkey]

10 hours ago, DurhamBorn said:

Both,silver to $200 minimum,some of the miners will likely 100 bag.The key though is not all miners ,and some will go under.He thinks the miners will be to the next cylce what the .com's were to the last one.If i had £5k to invest id buy £1k in 5 silver miners.If i had £100k id buy £30k in silver and £70k in 10 to 12 silver/gold  miners.It all depends on peoples risk,portfolio,assets,time of life etc.Lots to consider,and the space can crush people quickly.If risk is too much then is simply buy silver and look to sell it around 2027.

Hi DB at this point what would be the 10-12 miners you would go for if you had to allocate that 100k

[Gin]

10 hours ago, DurhamBorn said:

Both,silver to $200 minimum,some of the miners will likely 100 bag.The key though is not all miners ,and some will go under.He thinks the miners will be to the next cylce what the .com's were to the last one.If i had £5k to invest id buy £1k in 5 silver miners.If i had £100k id buy £30k in silver and £70k in 10 to 12 silver/gold  miners.It all depends on peoples risk,portfolio,assets,time of life etc.Lots to consider,and the space can crush people quickly.If risk is too much then is simply buy silver and look to sell it around 2027.

Thank you DB. Methinks I will buy some physical silver and hope I live past 70 years of age

[Inoperational Bumblebee]

10 hours ago, DurhamBorn said:

Both,silver to $200 minimum,some of the miners will likely 100 bag.The key though is not all miners ,and some will go under.He thinks the miners will be to the next cylce what the .com's were to the last one.If i had £5k to invest id buy £1k in 5 silver miners.If i had £100k id buy £30k in silver and £70k in 10 to 12 silver/gold  miners.It all depends on peoples risk,portfolio,assets,time of life etc.Lots to consider,and the space can crush people quickly.If risk is too much then is simply buy silver and look to sell it around 2027.

As in physical silver, or would an ETC or Bullionvault  fit the bill?

22 minutes ago, Talking Monkey said:

Hi DB at this point what would be the 10-12 miners you would go for if you had to allocate that 100k

I'm also interested in a summary! I've picked up a few along the way, but a considered list is a welcome starting point for further research. I'm currently up 50% on Sibanye after it was mentioned!

[UnconventionalWisdom]

10 hours ago, Barnsey said:

A bit dramatic of course, and I normally switch off when anyone is "selling" something, but this is surprisingly a great MUST watch if you haven't seen it already.

I like Mike Maloney. Like you, I'm sceptical when people say this is happening so buy x from me. But his hidden secrets of money series was a great introduction to what's going on. Good graphics to convey meaning. 

[DurhamBorn]

I dont really want to give a straight buy these miners answer because a lot depends on time,laddering etc etc and im well up on some of these already.I also wouldnt want someone sticking their life savings into a portfolio of silver miners,as the whole sector could go down the pan if the silver call is wrong.

However i own these silver miners,

Alexco Resource Corp

Endeavour Silver Corp

Fortuna Silver Mines

Great Panther Silver

International Tower Hill Mines

Coeur Mining

Hecla Mining

First Majestic

 

I also like Mike Maloney.He is a PM seller of course,but i think his thoughts are genuine,his work has helped educate people and he isnt pushy on selling.He also buys lots of PMs for his own accounts.His videos are a nice starting point for people to understand how things tick.

 

 

[Sugarlips]

11 minutes ago, DurhamBorn said:

I dont really want to give a straight buy these miners answer because a lot depends on time,laddering etc etc and im well up on some of these already.I also wouldnt want someone sticking their life savings into a portfolio of silver miners,as the whole sector could go down the pan if the silver call is wrong.

However i own these silver miners,

Alexco Resource Corp

Endeavour Silver Corp

Fortuna Silver Mines

Great Panther Silver

International Tower Hill Mines

Coeur Mining

Hecla Mining

First Majestic

 

I also like Mike Maloney.He is a PM seller of course,but i think his thoughts are genuine,his work has helped educate people and he isnt pushy on selling.He also buys lots of PMs for his own accounts.His videos are a nice starting point for people to understand how things tick.

 

 

Very insightful as ever dB thanks, I assume most of the above were purchased at prices much lower than today? Are there any here that are more of a bargain today that we might nibble at?

[Inoperational Bumblebee]

Appreciated @DurhamBorn. As always, everyone should do their own research, and I've taken it (and propose for others) that your post was not investment advice. That's particularly relevant in a thread like this because a lot of people's personal calls are somewhat contrary to current perceived wisdom.

[DurhamBorn]

2 minutes ago, Sugarlips said:

Very insightful as ever dB thanks, I assume most of the above were purchased at prices much lower than today? Are there any here that are more of a bargain today that we might nibble at?

Some are up well,others are up a few %.For a real punt on silver price increases i like Endeavour ,it would probably go bust if silver stayed below $16 for a few years (or more likely issue equity),but if we get silver to $23 as i expect within 18 months then they should x3.They have some great land packages and might be sat on a lot more silver than their resources show.

For a real high risk punt Hecla Mining.They have far too much debt and if silver doesnt run soon they will likely have to issue equity and dilute the shares perhaps by half.However they have 700 million oz of silver in resources and their Green Creek mine is world class.If silver runs they will too,but very very risky.

[Bear Hug]

On 31/01/2019 at 15:45, DoINeedOne said:

Eldorado Gold Corporation

NYSE: EGO (USD)

 $3.68 0.75 (25.17%)

I am still down 20% 

 

Eldorado and Sibanye did really last few days so I sold them on Thursday. Unfortunately, they also did much better than most of my other PM stocks on Friday when I already cashed out.

[DurhamBorn]

14 minutes ago, Bear Hug said:

Eldorado and Sibanye did really last few days so I sold them on Thursday. Unfortunately, they also did much better than most of my other PM stocks on Friday when I already cashed out.

Iv missed out on the Sibanye rise mostly this time.Iv owned them 4 times i think and made a lot of money on them every time so i refused to buy many more at the bottom in case i was tempting fate .I also owned Harmony and Anglogold and had enough exposure to SA through them (though Anglogold isnt really SA anymore).

Both were on my rubber band list and they are a perfect example of how the rubber band stocks can keep inflicting pain,but if the sector turns they snap back very quickly.If we get a pull back in the sector into May people will get a last chance to climb aboard as that will be the point when gold starts to trend i think.There are a lot of gaps to fill in the miners so it will be interesting to see if they can keep going,or need to shake out some of the new hands.

[Errol]

Endeavour Silver has zero debt as well, which is an interesting feature (and highly unusual these days).

[Errol]

https://deviantinvestor.com/10638/gold-climbing-the-wall-of-worry/

[Bear Hug]

28 minutes ago, DurhamBorn said:

Iv missed out on the Sibanye rise mostly this time.Iv owned them 4 times i think and made a lot of money on them every time so i refused to buy many more at the bottom in case i was tempting fate .I also owned Harmony and Anglogold and had enough exposure to SA through them (though Anglogold isnt really SA anymore).

Both were on my rubber band list and they are a perfect example of how the rubber band stocks can keep inflicting pain,but if the sector turns they snap back very quickly.If we get a pull back in the sector into May people will get a last chance to climb aboard as that will be the point when gold starts to trend i think.There are a lot of gaps to fill in the miners so it will be interesting to see if they can keep going,or need to shake out some of the new hands.

I am planning to get back in.  It's just Sibanye (from my very limited knowledge) has some really bad publicity pretty regularly, so I hope for a good low entry point

[DurhamBorn]

6 minutes ago, Bear Hug said:

I am planning to get back in.  It's just Sibanye (from my very limited knowledge) has some really bad publicity pretty regularly, so I hope for a good low entry point

I use SA miners as tracking stocks for the sector.They lead upwards and downwards due to their high costs and leverage to the gold price.Sibanye has had a big kick up from palladium as it bought the Stillwater mine in the US that everyone said they over paid for,but that now looks a bargain.I fully expect once they pay off some debt they will go after some more gold miners in the America's.

[Green Devil]

I bought some eldorado gold a few weeks ago. Good investment that! Wish I'd bought more. Still fairly light gold miners. 

[leonardratso]

im still dribbling into this fund;

https://select.bestinvest.co.uk/fund-factsheets/swreso/smith--williamson-global-gold--resources-b#Portfolio

endeavours in there, big spread of equities half of them small caps, having said that ive been dribbling since 45p, 52 now.

 

[zugzwang]

Spot the trend! Clearly, the bear market from Oct-Dec 2018 was a Fed 'mistake'.

No QE needed to keep things on track this time, however. If Drumpf can strong-arm the privatisation of Fannie and Freddie through Congress with Mike Crapo (!) then subprime lending could deliver the goods. Maybe all the way through to the next Presidential election in November 2020.

https://www.marketwatch.com/story/congress-gets-back-into-the-fannie-freddie-reform-game-with-crapo-plan-2019-02-01