Jump to content
DOSBODS
  • Welcome to DOSBODS

     

    DOSBODS is free of any advertising.

    Ads are annoying, and - increasingly - advertising companies limit free speech online. DOSBODS Forums are completely free to use. Please create a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

     

IGNORED

Credit deflation and the reflation cycle to come.


DurhamBorn

Recommended Posts

Whilst i won't post numbers one of the issues i have is money tied up within company banks accounts which make me still heavy in cash as shown in the chart below come

But April i can take a lump sum again and will be placing that into mostly stocks and metals

The percentages i do once a month and are only a quick guide whilst the numbers are from another spread sheet that i update monthly  just shows me where and whats increasing or decreasing

Portfolio-Percentage.png.f137cb6ac380f2424131a505c601d1fc.png

Link to comment
Share on other sites

  • Replies 11.2k
  • Created
  • Last Reply

David and the team at Fidelity were the best macro strategists of their generation.They ended up managing a lot of pension schemes,usually US assets for foreign clients and were top percentile.As i said right back at the start of the original thread i met a member of their team and became friends when they were over involved in Glaxo's pension scheme in the very early 90s.Their short term calls are not really relevant to this thread,their  long term macro cycle work is as they are all seeing the same thing,a huge risk of a debt deflation,and CBs asleep at the wheel.

https://uk.reuters.com/article/uk-bmw-results-outlook/bmw-warns-of-significant-profit-fall-in-2019-seeks-12-billion-euro-in-cuts-idUKKCN1R10UJ

More and more of this.Profits falling because of increased costs.They need to invest in the new tech at the same time as input costs are rising etc.

Link to comment
Share on other sites

52 minutes ago, Majorpain said:

Then you get into contrarian investing being a long term thing not well suited to short term trades as Durhamborn has alluded to many times.

This is it. It's not about making money this year,  it's about positioning to make money (or at least not lose too much of it) in 7-8 years.

Link to comment
Share on other sites

I view contrarian investing as cycle long mostly.Its not a short term way of investing at all,indeed its very nature almost ensures early red flashing across your portfolio,and it can stay red for a few years.

Short term calls are more for fun and debate and keeping the mind active,not for investing a lifetimes capital.

 

Link to comment
Share on other sites

1 hour ago, Shatner's Bassoon said:

I think that's fair. This man's work has obviously massively influenced this thread and given that its central premise is around his wider macro/cycle picture, I must admit to being a little surprised that he's in the business of making bold short-term predictions like this. Twitter is full of US alpha male shills cockily making outlandish  "100% guaranteed" calls that are quietly glossed over when they turn out to be incorrect. 

That's not to say that I don't find his arguments compelling or that he won't eventually be right. But given his importance to this thread, I think it's only fair that we look at his record. 

This is not to denigrate DB either - I love his posts and I've learned so much from him and others on here.

I too was surprised by DaveH's short term calls, but as I am not a trader am not too fussed about it.

However I am very grateful to DB for interpolating(?) all the info. for us here in the UK as I'm here for insight into the next macro cycle and how to position correctly for this …oh, and the push-pull supermarket-sprint reduction sagas are always an interesting read (though I notice not so many of these type of posts recently).   

 

Link to comment
Share on other sites

3 hours ago, sancho panza said:

I don't follow him and I'm not on the guest list either and I'm not that bothered about it .I make my own calls for us as a family taking in the views of lots of different people.Not least some on here who've changed my opinion on things.

There's  a decent record of posters on here declaring interests either long or short when making comments where a conflict has arisen.

I will declare a subscription to Steve kaplan-True Contrarian-worth every penny of the $200 p.a..I tried it initialy after reading him when @DurhamBorn led us to him on here. Took a three month and found that he does a lot of teh legwork in terms of market research that I would do.I'm busy,time poor(kids,Mrs P, Mama P and wider family,job etc) I must say I don't particularly follow his tips(he invests in a wide range of ETF's) but that's not what I use him for and I don't try and time market turns off him alone.But I clearly do try and time market/company turns.........................I'd be lying if I said I didn't.

http://truecontrarian-sjk.blogspot.com/

I will also declare a subscription to IKN as hattipped by @kibuc.Comes in at $40 a month.Wouldn't say worth every penny but it does what I needed it to in terms of backing up my attempts to invest across the precious metals mining sector,educate me some on what to look for, market whispers,avoid pump n dumps.His actual tips are weighted by quality so not equal wiehgt,his returns have been mixed over the years but his research is incredibly detailed and he's clearly very committed to his work and the yellow metal.I do use his tips sometimes but not religiously as I mix with my own research as is often recommended on hre. I have actually used some of the reccomendatiosn for companies on here from @kibuc @Majorpain @DurhamBorn for which I've thanked them previously. As ever it's DYOR.

https://incakolanews.blogspot.com/

 

Most tipsheets/newsletters are crap,regurgitating the comapny accounts and the lucky ones invest in Apple at $1 and then are top of the returns list for fifteen years as a result.Hulberts Digest collates some data.

 

Personally,I'm happy to pay for research a) if it's what I want b) if it's good enough.Most buy and sell notes from most brokers are utter garbage and you'df be better off buying a index/sector ETF and using long term moving averages

 

Jsut my views.Appreciate your several points across several posts as they've made me think about things.

 

Edit to add:I will probably keep the kaplan running long term.IKN will probably skip once we're fully invested in the sector as when we sell,we'll be selling the lot in a oner.

Interesting links SP. I was aware of truecontrarian but for me i'd like to find (am still looking) a UK based person offering similar service to him.

Has anyone thoughts on momentum investing? The following 'salty dog' site below does this utilising funds (cost is £300 year). Douglas Chadwick states 12%/annum average return after all fees 2000-2017, but last year 'only' achieved 2%. I am looking for a systemized process to use for part of my portfolio and this seems very interesting (I intend using long-term index funds, stocks, gold, etc for remainder of portfolio). Douglas Chadwick also has regular column in Money Observer discussing his methodology, and is currently mostly in cash, with remaining in gold, pharma/health, tech funds (biotech/robotics, i.e. not fangs), so chimes with macro thoughts here.    

https://www.saltydoginvestor.com/

 

Link to comment
Share on other sites

3 hours ago, subutai80 said:

Dominic Frisby mentions YCA in his article on moneyweek today. Suggests uranium is a good long term bet but "On the evidence of this, now is a better time to be watching than buying. 2014, 2017 and 2018 all suggest we should be looking to buy in the late April to June timeframe." 

https://moneyweek.com/503584/uranium-looks-a-good-long-term-bet-heres-how-to-play-it/

Thanks for this. It was another poster on here who alerted me to Yellow Cake being a direct proxy Uranium bet - @longtomsilver I think. I like this timeframe - It fits it well with next year's ISA allowance. 

Link to comment
Share on other sites

2 hours ago, DoINeedOne said:

Whilst i won't post numbers one of the issues i have is money tied up within company banks accounts which make me still heavy in cash as shown in the chart below come

But April i can take a lump sum again and will be placing that into mostly stocks and metals

The percentages i do once a month and are only a quick guide whilst the numbers are from another spread sheet that i update monthly  just shows me where and whats increasing or decreasing

Portfolio-Percentage.png.f137cb6ac380f2424131a505c601d1fc.png

I'm waiting for A_P to show his after setting the hares running!

I hope DB keeps up the posts despite the "outing" (if correct) because it's his interpretation, personalisations, and extensions (applicability) that I value.

You come to this thread, decide if you buy the premise, maybe have a bit of discussion to decide, and if you do, surely the next step is to discuss what to do about it?  More of that please!

If not, move on....

There are other good threads for other finance and investing things, although this one (by its mass) seems to suck up some of them, going beyond it's focus (per its title).

Hope this thread doesn't degenerate into solely jap and grenades.  A bit for sure, but data driven stuff, far better (if harder work).

Link to comment
Share on other sites

FFS the estate agents from tos haven't found us have they?

The turn of a cycle, watching it happen and discussing ways to protect ourselves from it. That's what the threads about, picking thru random calls plucked from the Twitter is a waste of time.

Take advice from anyone without doing your own research and you're going to get handed your arse. 

Kindly, on with the thread.

Link to comment
Share on other sites

As an aside The Post Office are closing all their current accounts, something to do with their agreement with Bank of Ireland (who supply their banking capability) being terminated.

Another high street service being lost.

Link to comment
Share on other sites

1 minute ago, Harley said:

I'm waiting for A_P to show his after getting the hares running!

I hope DB keeps up the posts despite the "outing" (if correct) because it's his interpretation and extensions (applicability) that I value.

There are other good threads for other finance and investing things, although this one (by its mass) seems to suck up some of them, going beyond it's focus (per its title).

Hope this thread doesn't degenerate into solely jap and grenades.  A bit for sure, but data driven stuff, far better.

You mean after I said something along the lines or I don't really care ? Funny that xD. It is odd what in this thread gets people a little worked up, where other places it would be expected. With that said It's been shared in various forms on this thread and others already ;). I even think from memory I recently posted a screenshot of some PM/Gold positions (but I could be wrong). Really there isn't much to show anyway, it wouldn't go down very well in this thread either, it's rather quite boring in the grand scheme of things. Mainly the dreaded "passive" (insert boogyman gif here) investments, with a small HYP/reflationary stock portfolio. Personally I'm working on a holistic approach to the future. Rather than hoping or pinning myself down to one possibility. I'm moving to a cheaper part of the country (finally move next month), will be buying a place, between 30-50% downpayment (depends onthe house itself). Plan to knock the remainder in under ten years. Investments mainly using mordern portfolio theory and to be well diversified across all asset classes. Fairly quickly after the house is purchased I'm going to be salary sacrificing to minimum wage. Planning on starting a "non-profitable" (all profit into pensions) side business with my partner. Then it's about enjoying life. I plan to take up salmon fishing, smoking/bbq'ing. Spend a month of the year abroad to get my sun. Just going to live life. I can imagine swimming against the CB and political tide for 20 years becomes mentally tiring, won't be for me. This last two years since my wakeup call has been depressing xD

Funny I'm the one taking the heat...I wasn't the one "outing" anyone for the record. Someone posted something interesting so what I did was go investigate.

Link to comment
Share on other sites

To be honest I really think you’re over estimating both how many ‘feathers you’ve ruffled’ and how much you’re ‘taking the heat’.

🤷🏻‍♂️

Link to comment
Share on other sites

3 minutes ago, Lavalas said:

To be honest I really think you’re over estimating both how many ‘feathers you’ve ruffled’ and how much you’re ‘taking the heat’.

🤷🏻‍♂️

Yes I could well be, if I entirely meant it, lots of emojis for that purpose ;)

Link to comment
Share on other sites

Have loved this thread since the TOS, really gold mine of info and whether right or not it's provided a gold mine of being able to look at things out the box.  I'm naturally quite contrarian (maybe just result of slight anti authority stripe!) So welcome discussion that doesn't tread along some perceived status quo.  So much today is polarised and echo chamber where I am much happier being somewhere where debate and opposing views is viewed healthy.

As dB and others point out from the start a lot is based on the macro trends whilst obviously sticking his neck out to offer his personal take on short term stuff too (as other big posters like @sancho panza do). It's better if people disagree as well I think at least for discussion. 

Anyway the very simple stuff like consumer facing companies that have had their decades in the sun and the possibility of industry commodities etc rising next have really piqued my interest.  

At the moment by any account I would say my tiny portfolio is on the risky side (I'm not unfortunately in any position to think about fire soon so hey need to have lots of skin in the game for bit of positive upside EV).  

I like having bit of physical silver for first time because it's nice and shiny and also pretty damn tangible in these ethereal times.  I'm unsure about holding TLT at the moment it's the only thing I've sort of followed blindly into...I understand the reasoning etc but in hindsight just feels like a play that someone with much bigger boots would be suited to.  Thought about reducing a few times but often struck with procrastination, also it's in a sipp which seems a far way off.

Bit off topic but going by the above on my stance of risky I've also taken a singles position in a (obviously) risky crypto asset (MAID).  Not sure how much is based on the annoyance of missing out back in 2009 but I've been drip feeding in plus I've convinced myself I genuine like the company (ethical etc and Scottish). Quite possibly will go to nothing but I won't be kicking myself if multi bag.  The actual project is laudable but tbh can't get my head around how it would not become -or allow- a cess pit of degeneracy IE the dark web.

Rant and OT over and out

Link to comment
Share on other sites

longtomsilver
3 hours ago, billfunk said:

Thanks for this. It was another poster on here who alerted me to Yellow Cake being a direct proxy Uranium bet - @longtomsilver I think. I like this timeframe - It fits it well with next year's ISA allowance. 

Thanks for the acknowledgment. I like the loot of how your portfolio is structured. I hold both Yellow Cake and Cameco (£10k/£2k) and have recently made a small purchase (£1k) in Energy Fuels Inc (before the recent spike) I hope this retraces as I'll keep adding here. Long term miners tend to do much better during "the rush"

My biggest regret was selling out of Sylvania Platinum. At one point I was holding 1,000,000 shares at an average of 6.5p reducing this to 800,000 then 500,000 finally selling out completely at 18p. That would be worth £310k today. However £60k of the £170k currently in the portfolio can be attributed to SLP.

Link to comment
Share on other sites

Actually thought about ordering some VAT free silver coins from the EU before said on the radio we can have an extension only if they vote in Mays deal so god knows whats going  happen

Link to comment
Share on other sites

Castlevania
2 hours ago, longtomsilver said:

Thanks for the acknowledgment. I like the loot of how your portfolio is structured. I hold both Yellow Cake and Cameco (£10k/£2k) and have recently made a small purchase (£1k) in Energy Fuels Inc (before the recent spike) I hope this retraces as I'll keep adding here. Long term miners tend to do much better during "the rush"

My biggest regret was selling out of Sylvania Platinum. At one point I was holding 1,000,000 shares at an average of 6.5p reducing this to 800,000 then 500,000 finally selling out completely at 18p. That would be worth £310k today. However £60k of the £170k currently in the portfolio can be attributed to SLP.

I briefly owned Sylvania Platinum. They jumped 60% in around a month and I took profits. They’re much higher now.

Link to comment
Share on other sites

I sold Ashanti Gold the other day was up around 50% still holding Sibayne currently 108% and a few others 

The profit from Ashanti i may put into BullionVault

Link to comment
Share on other sites

 

5 hours ago, billfunk said:

Thanks for this. It was another poster on here who alerted me to Yellow Cake being a direct proxy Uranium bet - @longtomsilver I think. I like this timeframe - It fits it well with next year's ISA allowance. 

2 hours ago, longtomsilver said:

Thanks for the acknowledgment. I like the loot of how your portfolio is structured. I hold both Yellow Cake and Cameco (£10k/£2k) and have recently made a small purchase (£1k) in Energy Fuels Inc (before the recent spike) I hope this retraces as I'll keep adding here. Long term miners tend to do much better during "the rush"

Yellow Cake looks really interesting. I've held URA since 2016 and had considered purchasing Geiger Counter Ltd (LON: GCL) but seems to always trade at a premium with high charges.

Link to comment
Share on other sites

sancho panza
12 hours ago, Shatner's Bassoon said:

I think that's fair. This man's work has obviously massively influenced this thread and given that its central premise is around his wider macro/cycle picture, I must admit to being a little surprised that he's in the business of making bold short-term predictions like this.

errr, no it's not.   @DurhamBorn has referenced some long term macro calls from his pal.but this thread is based firmly on the the work of Irving Fisher,Hyman Minsky,Jospeh Schumpeter and a whole host of other  good minds

Persoanlly I find it slightly demeaning to 300 pages of thought provoking discussion for you to state that Hunter's work dominates it when Fisher published his theory of debt deflation in 1933.Only 86 years ago.

 

https://en.wikipedia.org/wiki/Irving_Fisher

Debt-deflation

Further information: Debt deflation

Following the stock market crash of 1929, and in light of the ensuing Great Depression, Fisher developed a theory of economic crises called debt-deflation, which attributed the crises to the bursting of a credit bubble. Initially, during the upswing over-confident economic agents are lured by the prospect of high profits to increase their debt in order to leverage their gains. According to Fisher, once the credit bubble bursts, this unleashes a series of effects that have serious negative impact on the real economy:

  1. Debt liquidation and distress selling.
  2. Contraction of the money supply as bank loans are paid off.
  3. A fall in the level of asset prices.
  4. A still greater fall in the net worth of businesses, precipitating bankruptcies.
  5. A fall in profits.
  6. A reduction in output, in trade and in employment.
  7. Pessimism and loss of confidence.
  8. Hoarding of money.
  9. A fall in nominal interest rates and a rise in deflation-adjusted interest rates.

Crucially, as debtors try to liquidate or pay off their nominal debt, the fall of prices caused by this defeats the very attempt to reduce the real burden of debt. Thus, while repayment reduces the amount of money owed, this does not happen fast enough since the real value of the dollar now rises ('swelling of the dollar').[23]

This theory was largely ignored in favor of Keynesian economics, in part because of the damage to Fisher's reputation caused by his public optimism about the stock market, just prior to the crash. Debt-deflation has experienced a revival of mainstream interest since the 1980s, and particularly with the Late-2000s recession. Steve Keen predicted the 2008 recession by using Hyman Minsky's further development of Fisher's work on debt-deflation. Debt-deflation is now the major theory with which Fisher's name is associated.[10]

 

https://en.wikipedia.org/wiki/Hyman_Minsky

Minsky proposed theories linking financial market fragility, in the normal life cycle of an economy, with speculative investment bubbles endogenous to financial markets. Minsky stated that in prosperous times, when corporate cash flow rises beyond what is needed to pay off debt, a speculative euphoria develops, and soon thereafter debts exceed what borrowers can pay off from their incoming revenues, which in turn produces a financial crisis. As a result of such speculative borrowing bubbles, banks and lenders tighten credit availability, even to companies that can afford loans, and the economy subsequently contracts.

This slow movement of the financial system from stability to fragility, followed by crisis, is something for which Minsky is best known, and the phrase "Minsky moment" refers to this aspect of Minsky's academic work.

Minsky's model of the credit system, which he dubbed the "financial instability hypothesis" (FIH),[5] incorporated many ideas already circulated by John Stuart Mill, Alfred Marshall, Knut Wicksell and Irving Fisher.[6] "A fundamental characteristic of our economy," Minsky wrote in 1974, "is that the financial system swings between robustness and fragility and these swings are an integral part of the process that generates business cycles."[7]

Minsky argued that a key mechanism that pushes an economy towards a crisis is the accumulation of debt by the non-government sector. He identified three types of borrowers that contribute to the accumulation of insolvent debt: hedge borrowers, speculative borrowers, and Ponzi borrowers.

The "hedge borrower" can make debt payments (covering interest and principal) from current cash flows from investments. For the "speculative borrower", the cash flow from investments can service the debt, i.e., cover the interest due, but the borrower must regularly roll over, or re-borrow, the principal. The "Ponzi borrower" (named for Charles Ponzi, see also Ponzi scheme) borrows based on the belief that the appreciation of the value of the asset will be sufficient to refinance the debt but could not make sufficient payments on interest or principal with the cash flow from investments; only the appreciating asset value can keep the Ponzi borrower afloat.

If the use of Ponzi finance is general enough in the financial system, then the inevitable disillusionment of the Ponzi borrower can cause the system to seize up: when the bubble pops, i.e., when the asset prices stop increasing, the speculative borrower can no longer refinance (roll over) the principal even if able to cover interest payments. As with a line of dominoes, collapse of the speculative borrowers can then bring down even hedge borrowers, who are unable to find loans despite the apparent soundness of the underlying investments.[5]

 

https://en.wikipedia.org/wiki/Joseph_Schumpeter

Schumpeter criticized John Maynard Keynes and David Ricardo for the "Ricardian vice." According to Schumpeter, Ricardo and Keynes reasoned in terms of abstract models, where they would freeze all but a few variables. Then they could argue that one caused the other in a simple monotonic fashion. This led to the belief that one could easily deduce policy conclusions directly from a highly abstract theoretical model.

In this book, Joseph Schumpeter recognized the implication of a gold monetary standard compared to a fiat monetary standard. In History of Economic Analysis, Schumpeter stated the following: "An 'automatic' gold currency is part and parcel of a laissez-faire and free-trade economy. It links every nation's money rates and price levels with the money-rates and price levels of all the other nations that are 'on gold.'

The entrepreneur disturbs this equilibrium and is the prime cause of economic development, which proceeds in cyclic fashion along several time scales. In fashioning this theory connecting innovations, cycles, and development, Schumpeter kept alive the Russian Nikolai Kondratiev's ideas on 50-year cycles, Kondratiev waves.

Schumpeter believed that capitalism would gradually weaken by itself and eventually collapse. Specifically, the success of capitalism would lead to corporatism and to values hostile to capitalism, especially among intellectuals.

"Intellectuals" are a social class in a position to critique societal matters for which they are not directly responsible and to stand up for the interests of other classes. Intellectuals tend to have a negative outlook of capitalism, even while relying on it for prestige, because their professions rely on antagonism toward it. The growing number of people with higher education is a great advantage of capitalism, according to Schumpeter. Yet, unemployment and a lack of fulfilling work will cause intellectual critique, discontent and protests.

Parliaments will increasingly elect social democratic parties, and democratic majorities will vote for restrictions on entrepreneurship. Increasing workers' self-management, industrial democracy and regulatory institutions would evolve non-politically into "liberal capitalism". Thus, the intellectual and social climate needed for thriving entrepreneurship will be replaced by some form of "laborism". This will exacerbate "creative destruction" (a borrowed phrase to denote an endogenous replacement of old ways of doing things by new ways), which will ultimately undermine and destroy the capitalist structure.

Schumpeter suggested a model in which the four main cycles, Kondratiev (54 years), Kuznets (18 years), Juglar (9 years) and Kitchin (about 4 years) can be added together to form a composite waveform.

9 hours ago, JMD said:

Interesting links SP. I was aware of truecontrarian but for me i'd like to find (am still looking) a UK based person offering similar service to him.

Has anyone thoughts on momentum investing? The following 'salty dog' site below does this utilising funds (cost is £300 year). Douglas Chadwick states 12%/annum average return after all fees 2000-2017, but last year 'only' achieved 2%. I am looking for a systemized process to use for part of my portfolio and this seems very interesting (I intend using long-term index funds, stocks, gold, etc for remainder of portfolio). Douglas Chadwick also has regular column in Money Observer discussing his methodology, and is currently mostly in cash, with remaining in gold, pharma/health, tech funds (biotech/robotics, i.e. not fangs), so chimes with macro thoughts here.    

https://www.saltydoginvestor.com/

 

I'd be careful of anyone using records of returns to sell subs.Better to understand how their portfolio is constructed and whether returns have been flattered by one of two big trades.eg many high yield portfolios blew up ni 08 as they were full of banks.

DYOR for systemized but maybe start with understanding some apects of technical analysis susch as long term mvoing averages

8 hours ago, Harley said:

I'm waiting for A_P to show his after setting the hares running!

I hope DB keeps up the posts despite the "outing" (if correct) because it's his interpretation, personalisations, and extensions (applicability) that I value.

You come to this thread, decide if you buy the premise, maybe have a bit of discussion to decide, and if you do, surely the next step is to discuss what to do about it?  More of that please!

If not, move on....

 

Agree.There's plenty of space in this forum for other threads with different theses.

Link to comment
Share on other sites

 

5 hours ago, BearyBear said:

FED: No more rate hikes this year..? USD down, PMs up.

btw. this is funny: https://www.cnbc.com/2019/03/20/heres-what-changed-in-the-march-fed-statement.html

Its come as a complete shock to this thread of coursexD.Interesting,but i think there is a chance the data might start to show inflation around May/June and if so the market will then sniff the Fed is boxed in and hopefully get the PMs to start trending.

 

Link to comment
Share on other sites

We've had the "good" inflation and as surely as night follows day, we'll have the bad inflation.  It always has been so.  The money has been sucked up into assets and the velocity of money is on life support.  But when that iceberg starts to melt, and the dynamics say at an increasing rate,.....

We may get a deflationary crash first, but that is just a crash.  The inflation is a longer, malignant thing.  I would prefer to be preparing for inflation, and maybe just trading the deflationary bust.  But how to prepare.  The last discernable (i.e. not hidden) time was long ago, before the internet!

Stocks worked in Weimar Germany, and elsewhere, but only for so far and then failed, much has been said about the real performance of PMs during inflation, will commodity derivatives, like any derivatives, truly reflect the underlyings, what about currency movements, etc?

Tough one.

Link to comment
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    • No registered users viewing this page.

×
×
  • Create New...