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Credit deflation and the reflation cycle to come.


DurhamBorn

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1 hour ago, Barnsey said:

The Germans have finally caved into spending money, reflation QE on the way disguised by green energy agenda! Big move.

https://uk.mobile.reuters.com/article/amp/idUKKCN1UY1O3

Germany is mulling a fiscal policy U-turn and considering ditching its long cherished balanced budget goal by issuing new debt to finance a costly climate protection package, a senior government official told Reuters on condition of anonymity.

No name for that 'senior government official'??

In which case, come back when a German Chancellor says that.

As it stands Germanys trashing Europe. Eruope knows it, Germans Pols know it but nothign will change.

 

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6 minutes ago, spygirl said:

No name for that 'senior government official'??

In which case, come back when a German Chancellor says that.

As it stands Germanys trashing Europe. Eruope knows it, Germans Pols know it but nothign will change.

 

Code for 'testing the waters'.

Markets rose on the news, therefore there's a good chance they'll follow through.

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3 hours ago, Cattle Prod said:

Folks, a question on Fresnillio. (Dec. I own some). It is currently c. 50% below 2018 prices when silver was last 17 an oz, and gold was lower. I get that it missed earnings, but it hasn't participated in this rally at all. Production guidance dropped only a few %. Smells like am overreaction to me, and earnings are backward looking. RSI, Stochs, MACD all low and turning up.

I know its not a sexy name with you guys on here, so is there something I'm missing?! Time to take profits in Harmony (up 89%, hat tip to DB), and thinking of redeploying here.

Thoughts? P/E too high?

 

Glad you nearly doubled on HMY,really pleased with them for people.(and myself).I dont bother with Fres as its too big and i prefer big risk/big reward when i buy the sector.but for a longer term hold id see no reason not to open a ladder on them here and maybe set up two more at 10% down points.Remember HMY has 80 million oz of gold in the ground though.Iv sold a lot myself,but they might 10 bag from here even.

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hi SanchoPanza, excuse me tracking back somewhat, but did you narrow your list of potash potentials down, or are you going to wait for (hopefully) further price falls?

A few weeks back you made an interesting post, and I made a note at the time of the ones you were considering. I am now trying to come up with my own shortlist.

I believe your list was: Nutrien / Mosaic / Intrepid potash / Yara / PhosAgro / Compass / Incitec / NuFarm / K+S.

I also have ICL, and SQM (nutrien sold this to comply with merger rules), but not sure where or who I got these ones from !?!

 

 

A separate but related question which might be an interesting topic question for some here to respond to is ICL is an Israeli chemical company. I note that Israeli companies, particularly those in the tech sector, have been very successful in recent years (drones/AI). Although typically small players at present - I wonder are there any other Israeli companies - reflation play types for the next cycle of course - that others might have on their investing radar?     

 

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UnconventionalWisdom
9 hours ago, Harley said:

A lot of very clever organisations are out there to take my money.  But "it's my money and I don't have to spend it"!

"First you make the good, then you make the market". John Kenneth Galbraith

Convince people they need a 1 grand phone! Bloody admen

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19 hours ago, sancho panza said:

Can New Gold jsut hold production back until the agreements are finished?

I don't think they can. It looks like they achieved that collar by a combination of puts and calls, and those puts will have to be delivered on. If they cut production, they would be cutting their "un-collared", profitable ounces, therefore making their situation worse.

Also, let's not forget that the main reason NG fell like a rock was due to operation issues at Rainy River, putting question marks about its ability not only to be profitable, but to run any production at all. Share price only started recovering after two quarters of smooth operations and month-by-month improvements in production. Should that trend be reversed for any reason, that would surely erase all the newfound optimism about NG and result in brutal re-pricing.

 

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On ‎22‎/‎09‎/‎2018 at 15:36, Errol said:

Gold company tip:

 

Here’s Why Vista Gold Is Extraordinarily Undervalued

http://investmentresearchdynamics.com/heres-why-vista-gold-is-extraordinarily-undervalued/

 

Really, really wish I purchased more of this now. I got quite a bit but nowhere near as much as I'd like. Up 93% on my holding.

 

VIsta Gold (VGZ) is advancing Australia’s largest undeveloped gold project.  The current resource stands at 7.8 million ounces, of which 5.8 million proven/probable reserves.  Vista is implementing a high-tech grinding and sorting process that will improve gold recovery and production.

Vista released an updated Preliminary Feasibility Study which shows an after-tax NPV of $679 million, assuming an initial capital cost of $839 million and $1300 gold. Vista’s current market cap is $49 million.

Vista Gold is one of the most undervalued junior mining stocks given the degree to which the project has been de-risked. 

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Well, Salvini has decided now would be a good time for fresh elections, if he gets a majority the EU is going to have Brexit on its northern front and Italexit on its southern.  

Another boost for PM's and another nail in the Euro coffin.

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5 hours ago, Festival said:

Thanks for peoples responses - i sold 50% of the holding in the end with the intention of buying back if it falls 7-8% into the high 120's. Looks like a number of you beat me to it selling TLT and its sisters IBTL and IDTL. Its difficult to see many other places to run to when the proverbial hits the fan other than UST and the dollar though but I'm trusting the yield curve that we are not there yet.

Also thanks from me for asking that question and for everyone's responses. Have been watching IBTL price over the last few days and saying to myself "How much!?" So I am also selling half what I've got with a view to buying back in at a certain price later on.

Big, big thanks to DB and all you other clever people on the thread. My SIPP is currently 30% up on what I invested into it a fairly short while ago. Fantastic result for me! Just wish I had invested more now (doesn't everyone!) but I can only invest what I feel comfortable with based on my knowledge and understanding i.e not nearly enough as much as I should or could do.

It has been a very pleasant wake up call this week what with gold and silver tearing away too. I must do some catching up on the thread now as the world does not stand still and I am very far behind on current developments and thoughts....

Thankyou, thankyou, thankyou!

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Bobthebuilder

I sold some more profit in PM miners today, I am almost initial investment free. Very happy about that. Thanks DB, thanks everyone.

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Bricormortis

I would like to thank DB and the many knowledgeable contributors to this thread which I have been reading since its inception on Tos. I am 50 % up on my ISA. Silver stash is doing nicely too. BV'd 28 kilos.

 

 

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Inoperational Bumblebee
6 hours ago, JMD said:

hi SanchoPanza, excuse me tracking back somewhat, but did you narrow your list of potash potentials down, or are you going to wait for (hopefully) further price falls?

A few weeks back you made an interesting post, and I made a note at the time of the ones you were considering. I am now trying to come up with my own shortlist.

I believe your list was: Nutrien / Mosaic / Intrepid potash / Yara / PhosAgro / Compass / Incitec / NuFarm / K+S.

I also have ICL, and SQM (nutrien sold this to comply with merger rules), but not sure where or who I got these ones from !?!

 

 

A separate but related question which might be an interesting topic question for some here to respond to is ICL is an Israeli chemical company. I note that Israeli companies, particularly those in the tech sector, have been very successful in recent years (drones/AI). Although typically small players at present - I wonder are there any other Israeli companies - reflation play types for the next cycle of course - that others might have on their investing radar?     

 

Yesterday I sold two-thirds of my ITPS, and put some of it into MOS and SDF. Nothing going for them other than they look like they've hit a support level and they seem to know what they are doing. I wouldn't mind some Nutrien too, but not buying at this level. My portfolio is mainly spray and pray, with a little TA. It's done me rather well so far as mentioned previously!

One sector I've been keeping an eye on is industrial gases, namely Air Products and Linde for their helium exposure. There is a finite amount of helium on the planet and there are a number of applications that only liquid helium will do the job for, and I don't think those applications are going away too soon. I've read that if helium was priced according to market forces rather than being suppressed by the US helium supply laws, a party balloon would cost about £30. Unfortunately for me, APD just keeps going up. In a bust I'll be buying a chunk.

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hi CattleProd, a couple of months ago you mentioned that you hold the Platinum ETF's: SPLT and LPLA. After doing my own DD I bought the same two ETF's, but curiously my LPLA ETF (2x daily long platinum) has increased by approx. 1%, whereas my SPLT ('vanilla' platinum ETF) has increased by approx. 10%. I note the LPLA is priced in dollars (SPLT is in pounds), but given the recent strengthening of the dollar, I would have thought this aspect would have benefited LPLA performance even more.

I have held both etf's since 1st July. Perhaps this is the correct performance for LPLA - however I did (simplistically?) expect that the '2x daily long' formulation would broadly equate to doubling the gains/losses as compared to the 'ordinary physical' SPLT.

Any explanation as to what might be happening here would be greatly appreciated. Or have I committed the 'investment sin' of buying without understanding?           

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Reality bites.

 

New Gold Inc. Announces C$150 Million Bought Deal Financing

http://www.newgold.com/investors/NewGoldNews/PressReleaseDetail/2019/New-Gold-Inc-Announces-C150-Million-Bought-Deal-Financing/default.aspx

 

A reasonable move from the financial perspective, if you cannot make money mining gold you have to raise dough somewhere else, ideally taking advantage of a brief period of optimism around your stock. Surely not the last placing we'll see from them, C$150m hardly solves their long-term issues.

However, for the small guy it should be a sobering reminder that balance sheet matters.

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5 hours ago, JMD said:

hi CattleProd, a couple of months ago you mentioned that you hold the Platinum ETF's: SPLT and LPLA. After doing my own DD I bought the same two ETF's, but curiously my LPLA ETF (2x daily long platinum) has increased by approx. 1%, whereas my SPLT ('vanilla' platinum ETF) has increased by approx. 10%. I note the LPLA is priced in dollars (SPLT is in pounds), but given the recent strengthening of the dollar, I would have thought this aspect would have benefited LPLA performance even more.

I have held both etf's since 1st July. Perhaps this is the correct performance for LPLA - however I did (simplistically?) expect that the '2x daily long' formulation would broadly equate to doubling the gains/losses as compared to the 'ordinary physical' SPLT.

Any explanation as to what might be happening here would be greatly appreciated. Or have I committed the 'investment sin' of buying without understanding?           

Leveraged ETFs don't work well over longer terms.  In particular, they hate volatility.  

There's lots of stuff out there about this, eg, https://www.kiplinger.com/article/investing/T022-C009-S001-run-don-t-walk-from-leveraged-etfs.html or https://thecollegeinvestor.com/4414/leveraged-etfs-dont-match-market-performance/

As a general rule don't hold them for more than about a week -- no matter how great the fundamentals (eg as you've seen over the last months).

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38 minutes ago, dgul said:

Leveraged ETFs don't work well over longer terms.  In particular, they hate volatility.  

There's lots of stuff out there about this, eg, https://www.kiplinger.com/article/investing/T022-C009-S001-run-don-t-walk-from-leveraged-etfs.html or https://thecollegeinvestor.com/4414/leveraged-etfs-dont-match-market-performance/

As a general rule don't hold them for more than about a week -- no matter how great the fundamentals (eg as you've seen over the last months).

Great advice there thank you

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Wise words @dgul this really isn't the time to get greedy, there are no certainties, just when you think things are going your way finally is when you get kicked in the ballsack. Always think "what if" and don''t use leverage, I can't bring myself to short either.

I don't have much skin in the game, just started my regular investments, which I've now upped to 16 stocks, big thanks to many of you for the ideas (you may think a couple are mad but these are averaging in over a long time so i'm looking well ahead to reflation and ageing demographics):

Royal Mail

BT

Vodafone

Centrica

SSE

William Hill

Playtech

NewRiver

British Land

Balfour Beatty

Fresnillo

Imperial Brands

Tui

SAGA

Stagecoach

Standard Life Aberdeen

 

Sold IBTL for profit and put into short duration US treasuries for imminent curve steepening, also have a lump in GDX, GDXJ and Silver (late to the game, whilst there may be a short term pullback, Silver in particular ready for a big spike), but these are short term holdings until the bust when it all probably goes back into IBTL for a few months.

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GDP for Q2 came in at -0.2%, worse than estimates of 0.0%, first contraction for more than 6 years. Q3 confirmed by the Grinch that stole Christmas on 20th Dec.

EDIT: Could be 11th Nov actually

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25 minutes ago, Barnsey said:

GDP for Q2 came in at -0.2%, worse than estimates of 0.0%, first contraction for more than 6 years. Q3 confirmed by the Grinch that stole Christmas on 20th Dec.

EDIT: Could be 11th Nov actually

It is complex.  We're going to have weeks from where where the media go on about how we're already in recession, even though the negative GDP read is mainly about demand brought forwards for original Brexit, and then a gap in demand as stockpiled inventory was worked through.  And they won't pay any attention to economies overseas (Germany particularly) which actually are likely to be in recession.

Funny old times.

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8 hours ago, JMD said:

hi CattleProd, a couple of months ago you mentioned that you hold the Platinum ETF's: SPLT and LPLA. After doing my own DD I bought the same two ETF's, but curiously my LPLA ETF (2x daily long platinum) has increased by approx. 1%, whereas my SPLT ('vanilla' platinum ETF) has increased by approx. 10%. I note the LPLA is priced in dollars (SPLT is in pounds), but given the recent strengthening of the dollar, I would have thought this aspect would have benefited LPLA performance even more.

I have held both etf's since 1st July. Perhaps this is the correct performance for LPLA - however I did (simplistically?) expect that the '2x daily long' formulation would broadly equate to doubling the gains/losses as compared to the 'ordinary physical' SPLT.

Any explanation as to what might be happening here would be greatly appreciated. Or have I committed the 'investment sin' of buying without understanding?           

x2 etc are only for short term trading,days or weeks really as they charge a fee every day for the puts and calls they have to buy and sell in the market.In affect if you hold that x2 for long enough your stake will go to zero because of the massive fees.x2,x4 etc are only for short term traders and will skint 99% of the people who hold them.If you want a leveraged play on platinum it would of been better to buy Sibanye.I mean this in a friendly way,and for everyone else,but i doubt more than one or two on this thread should be anywhere near those kind of funds,including myself.

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1 hour ago, dgul said:

It is complex.  We're going to have weeks from where where the media go on about how we're already in recession, even though the negative GDP read is mainly about demand brought forwards for original Brexit, and then a gap in demand as stockpiled inventory was worked through.  And they won't pay any attention to economies overseas (Germany particularly) which actually are likely to be in recession.

Funny old times.

Fed tightened nearly 2 years ago,nobody noticed or cared.MSM havent a clue.Liquidity with a lead and lag are the basis,the rest cross market.You can bet China is selling treasuries and the MSM will pick it up soon and say its because of trade war to hurt the US when really its because China is desperate for the $ as capital flows out of China.In the UK expect a budget soon that turns some spending on and pulls in private capital.One punt is that they allow BT much better margins to roll out fiber and once BT get that signed and sealed they flog their Spanish business and South American one to pay for it.That would see profits shoot higher in about 4 years as the depreciation crosses below the price increases.

Asset heavy value plays will start to charge high value growth companies higher prices for their services soon.It might sound crazy,but i expect Royal Mail to extract more from Amazon going forward than the other way around etc.

 

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Bobthebuilder

I notice BT went ex divi yesterday, I need to do some research on them, wondering if they might make a good long hold income stock for retirement. Im sure they must have massive pension liabilities, i have several neighbors on a BT pension.

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16 hours ago, Inoperational Bumblebee said:

Yesterday I sold two-thirds of my ITPS, and put some of it into MOS and SDF. Nothing going for them other than they look like they've hit a support level and they seem to know what they are doing. I wouldn't mind some Nutrien too, but not buying at this level. My portfolio is mainly spray and pray, with a little TA. It's done me rather well so far as mentioned previously!

One sector I've been keeping an eye on is industrial gases, namely Air Products and Linde for their helium exposure. There is a finite amount of helium on the planet and there are a number of applications that only liquid helium will do the job for, and I don't think those applications are going away too soon. I've read that if helium was priced according to market forces rather than being suppressed by the US helium supply laws, a party balloon would cost about £30. Unfortunately for me, APD just keeps going up. In a bust I'll be buying a chunk.

Thanks IB for the tips. APD looks interesting. I will be selling my own ITPS imminently.

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Noallegiance
4 hours ago, DurhamBorn said:

Fed tightened nearly 2 years ago,nobody noticed or cared.MSM havent a clue.Liquidity with a lead and lag are the basis,the rest cross market.You can bet China is selling treasuries and the MSM will pick it up soon and say its because of trade war to hurt the US when really its because China is desperate for the $ as capital flows out of China.In the UK expect a budget soon that turns some spending on and pulls in private capital.One punt is that they allow BT much better margins to roll out fiber and once BT get that signed and sealed they flog their Spanish business and South American one to pay for it.That would see profits shoot higher in about 4 years as the depreciation crosses below the price increases.

Asset heavy value plays will start to charge high value growth companies higher prices for their services soon.It might sound crazy,but i expect Royal Mail to extract more from Amazon going forward than the other way around etc.

 

As if by magic, and as per your calls months ago, BBC today has an article confirming incoming massive infrastructure spend in the next budget.

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8 hours ago, dgul said:

Leveraged ETFs don't work well over longer terms.  In particular, they hate volatility.  

There's lots of stuff out there about this, eg, https://www.kiplinger.com/article/investing/T022-C009-S001-run-don-t-walk-from-leveraged-etfs.html or https://thecollegeinvestor.com/4414/leveraged-etfs-dont-match-market-performance/

As a general rule don't hold them for more than about a week -- no matter how great the fundamentals (eg as you've seen over the last months).

Thank you DGUL for the links, I didn't appreciate how volatility can skewer the reward element.   i.e. my leveraged platinum returned 2% when I sold it today, whereas by vanilla platinum fund has increased by over 10% in same time frame.   

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