Credit deflation and the reflation cycle to come.

[Harley]

2 hours ago, Majorpain said:

Iran seized an Iraqi tanker this time,

They're going to need a bigger port!

[Harley]

32 minutes ago, A_P said:

Ignore I think I've found it now.

Just in case....

https://www.financialsense.com/podcast/19237/they-met-they-cut-they-confused-plus-marc-chandler-gold-and-end-dollars-run

TBH, limited commentary as all covered in prior weekly podcasts.  Also keen on the energy sector for divs.  Free stuff during the week too.

[Lavalas]

Just to save anyone staring at the ticker wondering why it’s so quiet, the Canadian exchanges are closed for a public holiday today 

[Errol]

5 minutes ago, Lavalas said:

Just to save anyone staring at the ticker wondering why it’s so quiet, the Canadian exchanges are closed for a public holiday today 

Canada has exchanges? I thought they still lived in mud huts.

[Bobthebuilder]

buy signal???

 

https://www.thisismoney.co.uk/money/investing/article-7317879/MIDAS-SHARE-TIPS-UPDATE-Tell-Sid-time-sell-British-Gas-owner-Centrica.html

 

[Bear Hug]

https://wolfstreet.com/2019/08/04/the-wolf-street-report-is-the-everything-bubble-ripe-yet/

I very much agree with what he is saying, yet so far I have lost out by redirecting my work pension contributions to ftse100 from default (mainly US) stocks.

Also, I have been inspired by posters in this thread: I will not start another car lease, going to drive a 10 year old car I got for free from my mother!

[Majorpain]

Quote

The yuan blew through the symbolic line of seven to the dollar for the first time since the global financial crisis, with the offshore rate in Hong Kong spiking to 7.07 in moves that stunned seasoned traders. 

The calculated action by the People’s Bank (PBOC) threatens to unleash a wave of deflation across the world and risks pushing East Asia and much of Europe into recession

Game on, here we go.

https://www.telegraph.co.uk/business/2019/08/05/currency-war-begins-china-hurls-devaluation-back-trumps-face/

[Bricks & Mortar]

5 hours ago, Lavalas said:

Just to save anyone staring at the ticker wondering why it’s so quiet, the Canadian exchanges are closed for a public holiday today 

Brilliant!  That's the answer I was looking for, the reason I'd come in here mid-afternoon.  Even though I hadn't asked the question yet.  Endeavour, First Majestic and Yamana were looking decidedly peaky in my HL account.  That'll be the numbers from Friday then.

[Bricormortis]

Endeavour Silver Corp up nearly 10 % today.

[Harley]

6 minutes ago, Bricormortis said:

Endeavour Silver Corp up nearly 10 % today.

Well well well!

SIL up too but GDX even better.

[Lavalas]

1 hour ago, Bricks & Mortar said:

Brilliant!  That's the answer I was looking for, the reason I'd come in here mid-afternoon.  Even though I hadn't asked the question yet.  Endeavour, First Majestic and Yamana were looking decidedly peaky in my HL account.  That'll be the numbers from Friday then.

Although looking at the increase in Gold and Silver today... if those three still look peaky tomorrow, it really might because they’re even peakier.

Gold up $22 currently

[Bricks & Mortar]

12 minutes ago, Lavalas said:

Although looking at the increase in Gold and Silver today... if those three still look peaky tomorrow, it really might because they’re even peakier.

It's only because the Canadian market is closed.  HL get their prices from there and are reporting prices from close on Friday.  Two of them are also listed on NYSE, and can see they're up 8 and 10% on there.  I'll sleep easy tonight.

Or maybe not.  Got a Christmas-Eve-when-you-were-a-kid sorta feel about it.

[DurhamBorn]

Ok ,we hit the range my road map said on gold today $1460-$1528.Its been an incredible ride really.We nailed it to the mast and got the time bang on late May,after a few false dawns.

I dont want to put anyone off the sector,and i fully understand anyone staying fully invested.However,i follow my road maps,and the PMs are only part of the road ahead.I wasnt sure how to deal with things (3 years old) hitting first target and how to proceed because too much sentiment and emotion has started to creep in to my thoughts.I see the news,Trump,the noise etc,but i have to stick to what my road map said and says.So iv decided to sell over half my PM stocks today after selling some the last couple of weeks.Iv sold the likes of Eldorado 80%.That brute hit me for 50% red at one point but ended up a fantastic green.Iv sold most of the others ranging from 50% sold to 80% sold.A few others that are in CAD will be sold tomorrow.

My indicators are saying the top end of my road map is likely,and that we could be in a new secular bull BUT a pull back from the top of the range (circa $1528) is still very possible.Iv decided not to sell the holdings iv kept.Those will be kept now through the full cycle (2027ish),and if we do get a pullback i would re-deploy more capital to the sector.That has removed the emotion from things now.

I really hope you have all made some money on the PMs.I know some didnt ladder and got in a bit early,but hopefully nice greens now.Most of the rubber band stocks have done very very well.

From a macro point the UK is looking much stronger than the Euro area,and even maybe the US.My $/£ cross market work is flashing to buy sterling.I use a few indicators i magnify for contrarian reasons and its these that are showing strength.They often call a bit early,but that never bothers me,always destination.

I have a feeling select mid range domestic stocks might start to turn soon if the sterling buy signal is correct.I have removed the ladders on several and bought into weakness today,and have put a ladder another 7% below on a lot of them.In affect iv re-deployed some of the PM gains into UK mid cap cyclicals/reflation.

As ever,its not a science,but Trump is forcing Chinas hand and all nations will soon start to reflate.Where the UK is in that cycle due to where sterling was the last 18 months should see us outperform.

 

 

[TNS]

What’s your view on Lloyd’s db as its almost sub 50p ? Tempted to have a nibble.

[Moonraker]

38 minutes ago, DurhamBorn said:

Ok ,we hit the range my road map said on gold today $1460-$1528.Its been an incredible ride really.We nailed it to the mast and got the time bang on late May,after a few false dawns.

I dont want to put anyone off the sector,and i fully understand anyone staying fully invested.However,i follow my road maps,and the PMs are only part of the road ahead.I wasnt sure how to deal with things (3 years old) hitting first target and how to proceed because too much sentiment and emotion has started to creep in to my thoughts.I see the news,Trump,the noise etc,but i have to stick to what my road map said and says.So iv decided to sell over half my PM stocks today after selling some the last couple of weeks.Iv sold the likes of Eldorado 80%.That brute hit me for 50% red at one point but ended up a fantastic green.Iv sold most of the others ranging from 50% sold to 80% sold.A few others that are in CAD will be sold tomorrow.

My indicators are saying the top end of my road map is likely,and that we could be in a new secular bull BUT a pull back from the top of the range (circa $1528) is still very possible.Iv decided not to sell the holdings iv kept.Those will be kept now through the full cycle (2027ish),and if we do get a pullback i would re-deploy more capital to the sector.That has removed the emotion from things now.

I really hope you have all made some money on the PMs.I know some didnt ladder and got in a bit early,but hopefully nice greens now.Most of the rubber band stocks have done very very well.

From a macro point the UK is looking much stronger than the Euro area,and even maybe the US.My $/£ cross market work is flashing to buy sterling.I use a few indicators i magnify for contrarian reasons and its these that are showing strength.They often call a bit early,but that never bothers me,always destination.

I have a feeling select mid range domestic stocks might start to turn soon if the sterling buy signal is correct.I have removed the ladders on several and bought into weakness today,and have put a ladder another 7% below on a lot of them.In affect iv re-deployed some of the PM gains into UK mid cap cyclicals/reflation.

As ever,its not a science,but Trump is forcing Chinas hand and all nations will soon start to reflate.Where the UK is in that cycle due to where sterling was the last 18 months should see us outperform.

 

 

Db, gold roadmap very clear thanks. What figure is your silver map now  indicating ?

[Bobthebuilder]

30 minutes ago, TheNickos said:

What’s your view on Lloyd’s db as its almost sub 50p ? Tempted to have a nibble.

I bought a load 10 years ago for 25p, fully expect them to be worth the same at some point.

[kibuc]

Congrats @DurhamBorn on your PM earnings.

However, seeing DXY still in the stratosphere I feel perfectly comfortable staying fully invested in the sector (2/3rd silver, 1/3 gold) and waiting for the real fireworks to go off. Most of my miners are way below their 2016 levels despite gold being $100/oz more expensive and with a lot of headroom to go higher. I'd be terribly disappointed not to double my stash from today's levels to be honest.

I think we should expect a lot of noises coming from various Fed officials in August that will soften Powell's message and start pushing the dollar lower.

Pullbacks are a natural part of any bull market and, as you say, nothing goes up in a straight line but I think it's fair to say the The Great Gold Bear Market Of July The 31st is well and truly over.

[sancho panza]

1 hour ago, DurhamBorn said:

Ok ,we hit the range my road map said on gold today $1460-$1528.Its been an incredible ride really.We nailed it to the mast and got the time bang on late May,after a few false dawns.

I dont want to put anyone off the sector,and i fully understand anyone staying fully invested.However,i follow my road maps,and the PMs are only part of the road ahead.I wasnt sure how to deal with things (3 years old) hitting first target and how to proceed because too much sentiment and emotion has started to creep in to my thoughts.I see the news,Trump,the noise etc,but i have to stick to what my road map said and says.So iv decided to sell over half my PM stocks today after selling some the last couple of weeks.Iv sold the likes of Eldorado 80%.That brute hit me for 50% red at one point but ended up a fantastic green.Iv sold most of the others ranging from 50% sold to 80% sold.A few others that are in CAD will be sold tomorrow.

My indicators are saying the top end of my road map is likely,and that we could be in a new secular bull BUT a pull back from the top of the range (circa $1528) is still very possible.Iv decided not to sell the holdings iv kept.Those will be kept now through the full cycle (2027ish),and if we do get a pullback i would re-deploy more capital to the sector.That has removed the emotion from things now.

I really hope you have all made some money on the PMs.I know some didnt ladder and got in a bit early,but hopefully nice greens now.Most of the rubber band stocks have done very very well.

From a macro point the UK is looking much stronger than the Euro area,and even maybe the US.My $/£ cross market work is flashing to buy sterling.I use a few indicators i magnify for contrarian reasons and its these that are showing strength.They often call a bit early,but that never bothers me,always destination.

I have a feeling select mid range domestic stocks might start to turn soon if the sterling buy signal is correct.I have removed the ladders on several and bought into weakness today,and have put a ladder another 7% below on a lot of them.In affect iv re-deployed some of the PM gains into UK mid cap cyclicals/reflation.

As ever,its not a science,but Trump is forcing Chinas hand and all nations will soon start to reflate.Where the UK is in that cycle due to where sterling was the last 18 months should see us outperform.

 

 

 

To be fair,we're currently at 13% portfolio value in the PM sector and we'll be holding.They've run fast and hard over the last two months.We bought tranche 1 in 2017 and it did little for two years .Added tranche 2+3 2018/2019 and then in the last 8 weeks a load have doubled.We're still sat on some losers New Gold/Hecla(just)/Eldorado(just),but we're deployed across a range of stocks-rising tide etc.

I can totally get why selling half and staying in for free makes sense.

The competition to devalue  currencies has just begun and we'll start seeing some proper dollar weakness soon,which will open up the oil/commodities sector for some boom times,even as the wider market deflates.As per discussion with CP,we'll be adding to our oil/gas producers partially with a view to offloading as dollar firms before it heads into the big kahuna but if we don't identify the selling point,then we may well hold those through.Exxon,Statoil,Gazprom,Lukoil,Total,BP,Shell,looking various shades of reasonable.Some other commodities eg Potash/Copper get a good run as dollar weakens.

In terms of mid cap cyclicals,what sort of names are you looking at?

3 hours ago, Cattle Prod said:

As in, the industry itself?

Upstream is the standard newspaper but a sub is very expensive. We get a couple of paper ones in work. Energy pedia or Oilprice regurgitates most of the stories.

The Prize is an excellent pulitzer prize winning history of the industry

Sites? Can't think of one that sums it all up, but read Art Bermans blog for excellent slidepacks and analysis. 

Shame The Oil Drum is gone

Cheers CP, I was looking for somewhere to educate myself on the industry.Art Berman has been mentioned on here before.I'll have a butchers.

[Harley]

1 hour ago, TheNickos said:

What’s your view on Lloyd’s db as its almost sub 50p ? Tempted to have a nibble.

I have HSBC in one income portfolio and wanted a different bank in another income portfolio so put Lloyds on its watch list a while ago.  Still watching for a bottom!  Hopefully soon!  Any other thoughts anyone?

[sancho panza]

27 minutes ago, kibuc said:

Congrats @DurhamBorn on your PM earnings.

However, seeing DXY still in the stratosphere I feel perfectly comfortable staying fully invested in the sector (2/3rd silver, 1/3 gold) and waiting for the real fireworks to go off. Most of my miners are way below their 2016 levels despite gold being $100/oz more expensive and with a lot of headroom to go higher. I'd be terribly disappointed not to double my stash from today's levels to be honest.

I think we should expect a lot of noises coming from various Fed officials in August that will soften Powell's message and start pushing the dollar lower.

Pullbacks are a natural part of any bull market and, as you say, nothing goes up in a straight line but I think it's fair to say the The Great Gold Bear Market Of July The 31st is well and truly over.

Agreed on the fisrt piece in bold.we've only jsut started with the dollar weakness.

As per before,I think we're headed for a Tech bubble in the PM's and we'll probably wait for some exponential moves up that'll signal our exit point,which will hopefully be in a few years.

Been totally taken by surprie by the moves over the last two months.I was anticipating a long slow move up where we could move ladders up.Instead,I've ended up chucking the ladders out of the window and 'spraying n praying' wherever I can identify some relative value.

I've missed out on a few shares that jsut ran too hard eg Pan American and loads where we didn't even get a second ladder on.Hence we've ended up deployed more widely than deeply.But then there's been others eg Fresnillo that've dropped into view.

Bull markets like these though will generally raise all boats.

[Harley]

17 minutes ago, sancho panza said:

The competition to devalue  currencies has just begun and we'll start seeing some proper dollar weakness soon,which will open up the oil/commodities sector for some boom times,even as the wider market deflates.

Sounds reasonable.  As said before, I want to add to my income portfolio, although I already hold BP and Shell but am not fully allocated due to the price run and no major pull back.  Income may suffer on some US ones if cable strengthens but so be it.  I value some currency diversification.

17 minutes ago, sancho panza said:

In terms of mid cap cyclicals,what sort of names are you looking at?

As mentioned, I'm waiting for a rainy day (literally!) to look at the FTSE 250 and even below, using the parameters I previously outlined.  I have a list of those with yields over 5%, although it's a bit old now.  Stockpedia are keen for me to take a sub for UK and US data for about £23 per month which might help but I'll probably use some free resources.  Happy to share what I find.

PS:  Just started to rain!

[sancho panza]

14 minutes ago, Harley said:

I have HSBC in one income portfolio and wanted a different bank in another income portfolio so put Lloyds on its watch list a while ago.  Still watching for a bottom!  Hopefully soon!  Any other thoughts anyone?

It's the beginning of the end of a credit bubble in which British consumers have over indulged with tommorrows pay cheque.

We're headed for a debt deflation which will see revolving credit get mullered.I keep hearing various figures for non mortgage debt per capita and as per our previous discussions on velocity,one of the big problems caused by QE/Zirp trying to get people borrowing and spending was that it got the wrong sort of consumers borrowing and spending ie the ones who will be more likely to default.

Issues with Lloyds for me would centre on them being UK centric,still holding loads of the crap loans written by Haliwide,little hope of expansion into the growing regions of the world.

If you pick apart some of the country ETF's,you can get some emerging market banks that would offer a better prospect imho.

We'll be buying HSBC and Standard at the bottom in 2020/21 but ntohing else UK based.Just my views.

PS a relative was quite high up in RBS(mortgage side) and told me that they still had loads of the old crap loans from 2005/8 on their books.This was back in 15/16.He's left them now.

[Castlevania]

1 hour ago, TheNickos said:

What’s your view on Lloyd’s db as its almost sub 50p ? Tempted to have a nibble.

The problem with banks is that no one knows what crap they have sat on their balance sheet and they’re hugely cyclical. I note that most of the banks reported an increase in bad debts in their half year earnings reports last week.

[Harley]

Forgive me for I have sinned - I didn't trade the PM miners!  Not enough time to do it right.  I did however get my allocations into physical up to 25% (per the Permenant Portfolio) back last year. Plus a little extra!  Plus some platinum and palladium!  I prefer a quiet life on this front right now but that'll change soon.  PMs have done well over the many years I've held them as a buy and hold given the monetary debasement we've had.  Everyone's been looking at the USD price but Aldi and co take sterling where the story is very different!  Last year's purchases are well up, some beaten only by (and I can't really believe this) government bonds!

PS:  Those bond returns were juiced by a weak GBP.  That may change soon which will also change a few other things we might have got comfortable with.  Defo a time to watch our backs!

[Harley]

7 minutes ago, sancho panza said:

If you pick apart some of the country ETF's,you can get some emerging market banks that would offer a better prospect imho.

Yup, that sounds a better way to go, plus my sector is "finance" so I have some flexibility.  Agree about UK centric (why I went with HSBC) and I am no fan of RBS. Think I was barrel scraping and need to look wider.