Credit deflation and the reflation cycle to come.

[sancho panza]

3 hours ago, Harley said:

Maybe a bit early to buy based on momentum.  Stochastic still below 20 and MACD still going down on both weekly and monthly charts.  Could have been caught out a few times recently with a couple of bounces. 

That said, one to watch as may turn soon as it approaches its post boom prices.  Nice 5%+ dividend, although I'd need to check the fundamentals.  Not sure why their price has been in freefall and whether the Norwegian Sovereign Fund declared divestments affected them.

Big picture, I'm liking the energy sector for my income portfolio and am feeling a bit better about BP technically since my post earlier this week.  Another to watch.  I would still like some exUK stocks so will add  Equinor ASA to my watchlist.

I've also been meaning to look at the smaller players, upstream, downstream and services in my search for yield.

BTW, I'm a big oil brat.  Quite an adventure.  Even lived on a refinery once so guess oils's in me blood, literally!

I've been filtering through some ETF's for oil services/natural gas/smaller oilies trades and use a system I've devised for filtering  to exclude the shares that are high in their chart,weak balance sheet,poor FCF,poor profitability etc.It's not foolproof but it allows me to exclude the high risk plays from some sectors eg Mcdermott in oil services.

These are the ones on my list that will suit us for the weak dollar phase if it happens.A couple obviously pop up in multiple ETF's. Worth noting all getting whacked today ,some are so cheap it makes my eyes hurt ....it is a spray n pray operation,so feel free to pass comment on an individual stock if you have a view

FCG -  DVN,CXO,XEC,ECA,CNX,AR,ERF(top pick),SRCI,ENBL,HESM,CNXM

I'm going to whittle those down some

OIH/XES -SLB,TS,RPC (Top pick),HP, PUMP, HLX,SOI,           (Halliburton excluded for balance sheet risk)

XOP- DVN,CXO(both again), PE, CDEV (top pick),CPE

XLE- (when companies have larger market caps/revenues harley,I slightly adjust my criteria)- XOM,SLB, OXY, PXD,CXO,BHGE, DVN, HP, XE

[Democorruptcy]

7 hours ago, DurhamBorn said:

Fed cant treat the illness really SP because its political.Fed only control the liquidity in the economy.Government controls the rest.People blame the Fed for the money going to the 1%,but thats not their fault its the government.Government can tax Amazon 50% tomorrow,but they choose not to.Government can introduce mortgage laws capped at 3 times income no self cert etc but they chose not to.The Fed and the BOE look like the villains of the show but they are just the guy who sweeps up before and after the audience.Brown here in the UK caused rates to hit almost zero,not the BOE.

 

I don't see the line between governments and central banks, hence my governbankment. Just look at something like Help to Buy, it's the government using our taxes to cover bank losses and the BoE allowing 15% of mortgages to be 4.5x income or more. If the BoE weren't complicit they could limit HTB and house prices in general by reducing lending multiples, it's their FPC that sets them.

[BearyBear]

This tweet caused the Gold to skyrocket..!

 

[Bear Hug]

6 minutes ago, BearyBear said:

This tweet caused the Gold to skyrocket..!

 

Last couple of days has been quite a rollercoaster. My main concern is not the gains / losses so much anymore but how to manage stress better, and how not to look at gold chart every hour

[Don Coglione]

1 minute ago, Bear Hug said:

Last couple of days has been quite a rollercoaster. My main concern is not the gains / losses so much anymore but how to manage stress better, and how not to look at gold chart every hour

I hear you, Huggy Bear!

[Errol]

Trump is poking the Dragon. Not a good idea.

[Thorn]

Fingernails chewed to nothing this last few days.

but my wee Eldorado is now up 136%.

[reformed nice guy]

4 hours ago, CVG said:

^ EVRAZ

Of note includes Current Ratio of 1.5 (good), Piotroski F-Score of 8 (good) and Price to Free Cashflow of 5.44 (good). 

 

4 hours ago, sancho panza said:

Balance sheet loaded with debt.assets include 864mn in goodwill.Debt to equity might be even worse if they tried to sell the plant for what it's sat at the balance sheet at.-Dyor natch

Thanks for the feedback. Very interesting as I thought the debt level was low when I first looked at them. I wont buy them in the short term but they are on the reflation list

[DurhamBorn]

1 hour ago, Democorruptcy said:

I don't see the line between governments and central banks, hence my governbankment. Just look at something like Help to Buy, it's the government using our taxes to cover bank losses and the BoE allowing 15% of mortgages to be 4.5x income or more. If the BoE weren't complicit they could limit HTB and house prices in general by reducing lending multiples, it's their FPC that sets them.

More so in this country yes,but still its government driving things.The BOE aim is to keep credit growing slowly.Brown naffed it all up by borrowing at the top of the cycle to fund tax credits etc.Back then the BOE did try to pull it back in by increasing rates.It was Browns Labour that pushed to free the city.Blairs agent told my dad when he was a county councillor in Durham that they decided they didnt want an industrial policy,instead they would free the city,then tax it and use the tax to fund tax credits/DLA and housing benefit.That was their big policy.Replace a factory in the north with a Tesco and bump the wages up with tax credits paid for be taxing RBS profits.Of course when the lot imploded the welfare bill remained,and was probably the most damaging policy error since the war on its affects.It also caused Brexit of course by sucking in half of Eastern Europe.It always amused me hearing Labour go on about Brexit when they actually caused it with their insane benefit policy.

[DurhamBorn]

30 minutes ago, Thorn said:

Fingernails chewed to nothing this last few days.

but my wee Eldorado is now up 136%.

Classic rubber band stock.Everything going wrong for them,then just as gold turns everything goes right.They decide run Turkey for cash,Greece elects a government that will permit their massive mine and debt isnt needed.All that energy then snaps them back.How many here were down 50% nearly and now up 100%

[Barnsey]

Yuan almost breaking the 7 mark, Oil diving!

[Harley]

4 hours ago, sancho panza said:

I've been filtering through some ETF's for oil services/natural gas/smaller oilies trades and use a system I've devised for filtering  to exclude the shares that are high in their chart,weak balance sheet,poor FCF,poor profitability etc.It's not foolproof but it allows me to exclude the high risk plays from some sectors eg Mcdermott in oil services.

These are the ones on my list that will suit us for the weak dollar phase if it happens.A couple obviously pop up in multiple ETF's. Worth noting all getting whacked today ,some are so cheap it makes my eyes hurt ....it is a spray n pray operation,so feel free to pass comment on an individual stock if you have a view

FCG -  DVN,CXO,XEC,ECA,CNX,AR,ERF(top pick),SRCI,ENBL,HESM,CNXM

I'm going to whittle those down some

OIH/XES -SLB,TS,RPC (Top pick),HP, PUMP, HLX,SOI,           (Halliburton excluded for balance sheet risk)

XOP- DVN,CXO(both again), PE, CDEV (top pick),CPE

XLE- (when companies have larger market caps/revenues harley,I slightly adjust my criteria)- XOM,SLB, OXY, PXD,CXO,BHGE, DVN, HP, XE

Thanks, I will look.  Luckily I hold some USD!

Here's my ongoing approach for assessing candidates for my income portfolio which may (on fundamentals) chime with yours (I may have missed a few other checks:

. Wait until picked up on my momentum screener (MACD, stochastics, over £1bn cap, etc) so I only buy cheapish

- Does it fit into my portfolio strategy (e.g. sectors), allocations, and existing holdings

- Got to Morningstar:

  - Dividend yield above 5% 

  - Steady 5 year dividend history

  - Dividend cover > 1.5

  - Positive Operational FCF for the last 5 years

  - Steady 5 year FCF history

  - FCF supports dividend

  - Reasonable longer term debt history, mostly longer term debt (5 years plus)

  - Reasonable 5 year balance sheet history, particularly no large intangible figure

  - Reasonable 5 year turnover and profits (all) history

. Price chart review (weekly and monthly) to validate the overall price trend

. Review selected information sources to better understand the overall stock picture

This is for ongoing reviews/additions as I primed the portfolio initially with some key stocks.

I limit each holding to 4% of total portfolio value and have a limit for the absolute value held in any one stock (so the 4% may decline as the portfolio hopefully increases in value).

Basically like going to the supermarket and looking in the reduced price section for any mispriced nutritious stuff that won't make me ill!

 

[Majorpain]

2 hours ago, BearyBear said:

This tweet caused the Gold to skyrocket..!

 

Orange Man Good!  For my portfolio at least....

Remains to be seen if he can throw a spanner in China's plans, although he is trying his hardest.

[DurhamBorn]

This is a fantastic article.Id urge everyone to read it,copy and paste it,and read it again several times.Its by a master macro investor.It also follows many of the themes of this thread and also where i think we are going and why including describing how a distribution cycle works.Very happy to see Ray Dalio coming around to similar conclusions to this thread.

https://seekingalpha.com/article/4275729-paradigm-shifts

"The gains in investment asset prices benefited those who have investment assets much more than those who don't, which increased the wealth gap, which is creating political anti-capitalist sentiment and increasing pressure to shift more of the money printing into the hands of those who are not investors/capitalists."

" to finance their expenditures, owners of them will have to sell off principal, which will diminish the amount of principal that they have left, so that they a) will need progressively higher and higher returns on the dwindling amounts (which they have no prospect of getting) or b) they will have to accelerate their eating away at principal until the money runs out."

"I suspect that the new paradigm will be characterized by large debt monetizations that will be most similar to those that occurred in the 1940s war years."

". the big question worth pondering at this time is which investments will perform well in a reflationary environment accompanied by large liabilities coming due and with significant internal conflict between capitalists and socialists, as well as external conflicts."

[Alifelessbinary]

I’m a massive fan of Ray Dalio, so this looks like the perfect read for my commute.

It’s a crazy market at the moment, so I need some more sage words to calm my nerves.

 

[Democorruptcy]

12 hours ago, DurhamBorn said:

More so in this country yes,but still its government driving things.The BOE aim is to keep credit growing slowly.Brown naffed it all up by borrowing at the top of the cycle to fund tax credits etc.Back then the BOE did try to pull it back in by increasing rates.It was Browns Labour that pushed to free the city.Blairs agent told my dad when he was a county councillor in Durham that they decided they didnt want an industrial policy,instead they would free the city,then tax it and use the tax to fund tax credits/DLA and housing benefit.That was their big policy.Replace a factory in the north with a Tesco and bump the wages up with tax credits paid for be taxing RBS profits.Of course when the lot imploded the welfare bill remained,and was probably the most damaging policy error since the war on its affects.It also caused Brexit of course by sucking in half of Eastern Europe.It always amused me hearing Labour go on about Brexit when they actually caused it with their insane benefit policy.

When Blair got in the first thing he did was the 1998 Bank Act which made the BoE independent.

[Majorpain]

Germany goes completely negative, Switzerland has a friend!

[janch]

 Just in case anyone wants a platinum miner..............back in March I bought some Sylvania Platinum (SLP) which has just started to go up (+10% so far).  I bought because it was mentioned somewhere (on this thread??) and thought I would have a Pt miner as well as silver and gold. 

[UnconventionalWisdom]

16 minutes ago, Majorpain said:

Germany goes completely negative, Switzerland has a friend!

This is crazy! How can anyone claim the economy is healthy. 

 

[CVG]

32 minutes ago, janch said:

 Just in case anyone wants a platinum miner..............back in March I bought some Sylvania Platinum (SLP) which has just started to go up (+10% so far).  I bought because it was mentioned somewhere (on this thread??) and thought I would have a Pt miner as well as silver and gold. 

I bought some yesterday for the same reason. I hope I haven't cursed it - or you me!

[Starsend]

2 hours ago, Majorpain said:

Germany goes completely negative, Switzerland has a friend!

Not inverted though. Wait until everything's inverted and everything's negative. Then the world will explode and all the gold will be mine 

[Thorn]

Nice try, Starsend ... but No it won’t.

...because tiny bit of Eldorado will still be mine. 

Holding on ... for... dear... life... to the wee bastard.

Up 138.32% now apparently. 

Not that you’d know it from how white my knuckles are.

[Dogtania]

It seems to be a bloodbath on the Google stocks I'm following at moment across the board, the miners falling but only at same rate as some blue chips etc (ie not really moving much for the miners). Think the only one up is sibanye by 0.2 % oh and tlt been doing through the roof this week (obviously since I sold couple months ago 🤣)

Anyway are things moving in the direction of travel as expected now? Could get interesting.  Every day there is news on companies in trouble... Today wasn't it a travel group gone into admin (owner of laterooms).

I picked up some centrica as a punt too... Sorry it's not been good to others.  

[DurhamBorn]

27 minutes ago, Dogtania said:

It seems to be a bloodbath on the Google stocks I'm following at moment across the board, the miners falling but only at same rate as some blue chips etc (ie not really moving much for the miners). Think the only one up is sibanye by 0.2 % oh and tlt been doing through the roof this week (obviously since I sold couple months ago 🤣)

Anyway are things moving in the direction of travel as expected now? Could get interesting.  Every day there is news on companies in trouble... Today wasn't it a travel group gone into admin (owner of laterooms).

I picked up some centrica as a punt too... Sorry it's not been good to others.  

Interesting today i swapped my dads gas and electric and the 2nd cheapest option within £2 a year was British Gas,and 3rd SSE,with British Gas you also got a years free boiler cover.First time ever iv seen them at the top.I reckon they are about the price settors now.

Im slowly buying stocks i want,and have slowly sold a lot of PMs,they did what i wanted,holding some still,mostly silver miners,but very happy with the 50%+ average return.Slipped up on Sibanye though,was going to put another £8k in near the bottom,but was full up on Harmony and Anglogold and a few Sibanye at the time and didnt want anymore capital exposed to SA.

Iv got lots of ladders still to fill in other stocks,but some have actually bounced off bottom ladder.VOD are up 20% from bottom ladder including div,and RM up 16%.BAT up 25% Imperial up 13%.,others are drifting down.Tough, grinding down bears test the nerves but ladders help smooth it,that is until all ladders are hit and they go down another 30%+,

 

[sancho panza]