Credit deflation and the reflation cycle to come.

[Talking Monkey]

7 hours ago, sancho panza said:

 

It relates back to that conversation we had one here some time back about why the fed was doing what it was doing and reached the conclusion that it's possibly after one last cycle as the reserve currency,iirc.I think,prima facie,the fed wants the dollar to remain the worlds reserve currency.It's actions follow that.

 

I think you've nailed the Fed quandary as it's looking now.If it wants to remain number 1 reserve currency,it has to print(maybe Carnage's aim).That would align with teh Fed using it's playbook from 08 as I think it will give insanity one last go before it changes tack.

 

Gold/Silver ratio massively out of sync.Currently around 90,bottoms at 30................................either gold drops or silver runs if history is a guide.

This bull is just beginning.Long way to go before the fiat currency system resets after the next dislocation nudges the dollar out.

Only real issue for me is do we try and time a June 08-Oct 08 style sale/buy back?????

I think Barrick and newmont  will be kciking out some huge divi's in the next few years.

I don't doubt the bull in Silver and Gold coming up SP but in the bust there is a chance of an epic pullback before the  real pull gets started

[Wheeler]

2 hours ago, DurhamBorn said:

Did anyone else on here buy Alexco Resource Corp when i put it up as one of the best silver miners to buy?.Iv just sold  the whole holding,172% up since last November.I actually only bought half in that one compared to the rest as it was the most risky.Iv still got plenty of silver miners and thats one that could give up the gains in a turn so its gone the journey.More potash i think and start to nibble Repsol and Equinor.

Look at that old dog Eldorado as well ,i was down 50% on that at one point now up 100%,i didnt average down on it anymore at the bottom as it kept kicking me .I know some of you must of got it close to the bottom as you went in after me on it?.

 

Thanks for that DB. I didn't get into Alexco until March this year  - only up 50% in all! My best gold miner so far has been Harmony with 100% gain since the beginning of April this year.

I'm one of those betting heavily on the miners and the PMs. I've split things into two portfolios (thanks to @Harley for the idea) with a base one that just has to let me withdraw £9k a year for the next 11 years - don't care if it runs out after that as the pensions should kick in (unless the world has ended). This is mainly in index linked saving certificates and a broad UK index tracker. The riskier one currently has the following breakdown:

1. IBTL (8%) - looking at selling these when the 30 year yield drops below 1%, maybe 0.5% depending how greedy I get.
2. Cash (8%) - ready to pick up some bargains.
3. Reflation stocks (17%) - still think these might drop in value but have ladders in.
4. Physical PMs (18%)
5. Gold miners (24%)
6. Silver miners (25%)

My aim for this portfolio is to be between 0.5x and 4x its current value in 5-8 years - I'm happy to take a loss if things don't pan out. I don't recommend it for anyone else though obviously.

 

[Wheeler]

3 minutes ago, Talking Monkey said:

I don't doubt the bull in Silver and Gold coming up SP but in the bust there is a chance of an epic pullback before the  real pull gets started

I suspect you are right on this but I'll probably just hold through the pullback and add a little bit more during it. I'm awful at timing so I'd probably sell ready for it to pullback, have it go up 50%, change my mind and buy it back for it to only then drop. The fewer trades I make the better it seems.

[BearyBear]

3 hours ago, DurhamBorn said:

Did anyone else on here buy Alexco Resource Corp when i put it up as one of the best silver miners to buy?.Iv just sold  the whole holding,172% up since last November.I actually only bought half in that one compared to the rest as it was the most risky.Iv still got plenty of silver miners and thats one that could give up the gains in a turn so its gone the journey.More potash i think and start to nibble Repsol and Equinor.

Look at that old dog Eldorado as well ,i was down 50% on that at one point now up 100%,i didnt average down on it anymore at the bottom as it kept kicking me .I know some of you must of got it close to the bottom as you went in after me on it?.

 

Got both actually, Alexco +97%, Eldorado +70%

My best holding though are Harmony +130% and Sibanye +153%, worst one is New Gold -34% and then Endeavour Silver -9%

[Thorn]

3 hours ago, DurhamBorn said:

Did anyone else on here buy Alexco Resource Corp when i put it up as one of the best silver miners to buy?.Iv just sold  the whole holding,172% up since last November.I actually only bought half in that one compared to the rest as it was the most risky.Iv still got plenty of silver miners and thats one that could give up the gains in a turn so its gone the journey.More potash i think and start to nibble Repsol and Equinor.

Look at that old dog Eldorado as well ,i was down 50% on that at one point now up 100%,i didnt average down on it anymore at the bottom as it kept kicking me .I know some of you must of got it close to the bottom as you went in after me on it?.

 

Wee bastard Eldorado is up +131% now 

although there has been a fair bit of cursing and selling and rebuying  so I think it would have been higher if I’d just left it alone...

which I am doing now!

DB you’re a marvel. 

[Ma2]

Didn’t go for individual miners for a variety of reasons 

Gold and General +59%

GDXJ +45%

Many thanks @DurhamBorn

 

[MvR]

My speculative options account is progressing nicely.  starting around $4000 back in February, it's currently up about 260% at $14500, with over 150% of my stake back in cash.  

Most of the realised profits are from GDX, and unrealised profits from the silver ETF SLV.   My SPY positions are down 50% as I wait ( hope?) for the equity melt-up David Hunter is predicting.  Maybe it will happen, maybe not, but if it doesn't at least I've more than covered my initial stake and I'll be in a position to re-assess and enter some new positions for next year. 

Here's where I'm at right now. Ignore the cost basis of these positions.. they don't give a clear picture due to various adjustments and profit-taking.

Each instrument's position consists of "ladders" of mostly long call options, and usually some short call options at higher strikes which I sold after the price moved up, in order to cover the initial stake.

Here's a drill-down of my SLV positions for example. Currently the overall position has a delta of 1826.. that is to say right now it's the equivalent of holding 1826 SLV shares. As SLV goes up, so will my delta. Each option contract is for 100 shares, so if we get over $23, i'll be controlling the equivalent of 13000 SLV shares. Since 1 SLV share is equivalent to 1 troy ounce of silver, thats around 400kg of physical metal. ( and my account will be fluctuating rather violently! )

 In theory these positions can more than 10-bag from here if SLV hits $26 by January,  though realistically I'm aiming for less than half that as I take profits on the way up. So far ( touch wood ) I'm on track to make this year's ISA allowance, which was my initial aim, and if we get an equity melt-up this year too, I should do even better. 

I'm trying to be disciplined in selling or reducing positions as the markets move.. long options can turn against you quicker than they can move in your favour, so I'm not shy about locking in some of my gains, even if I think the market will go higher. 

As the old trading adage goes...nobody ever went broke taking a profit.

I'm definitely not recommending this trading style to anyone... just putting it out there for anyone who's interested. 

 

[Sman]

Learned a lot from here. I was too late for the pm miner shares. However I have been amassing pm in the form of silver in the main. Gold and some platinum. Might wait and have a look at the reflation shares in good time

[sancho panza]

5 hours ago, Lavalas said:

Thanks Sancho, that can only be good advice. It’s seeing the gains that I hoped for and reading the chat about where next that got me thinking, also spending my day off listening back to Sunday’s Test Match Special and playing about with a compound interest calculator. I always thought I’d stay in (risky) miners for the long term (along with some UK reflation stocks) as that suited my low base - aim high situation but now I’ve made some progress I feel I should diversify more, and I can now see the kind of safer gains that can still be made when you’re more balanced. Problem being I’ve spent the last year learning about PMs, learning what and who to listen to etc, and I enjoy them. I don’t have enough to spray and pay so need to learn other areas better from scratch. I think I could do that though if it was still commodity based. I have a geography / cartography background so find interest in the prospecting side of things. Keeps it a bit romantic too, drilling/digging for a fortune. I know where I want to put a bit on copper (REG.v ) so onto a crash course in Oil, Gas and Potash it is then. Should be easier this time as big oil can’t be as wild as the mining industry.

Still going to push my luck on the miners a bit more, mind.

Thing is Lavalas,we're all heading in a similar direction.Worth ntoing that the ETF's offer an excellent route into most asset classes eg

XLE=Big Oil,

XOP=Mid size and some big oil,

XES=oil services,

OIH=Oil services

SOIL=Potash

COPX=copper

FCG=Natural gas

The only sector where I would try and buy the individual stocks is big oil,if you can spread yourself that far.Some are kciking out some 6% + divi's and BUT-and it's a big BUT-XLE kicks out 3.8% with an expense ratio of 0.13%.SO you can get into the asset class without any of the risk of the the individual shares.

In all honesty,I reckon after all the work I've done on the goldies since 2017,we'd have done better if we'd just taken the easy road and pumped the ETF.Having said,I've learned a shedload and it helped me develop the Sancho Coma Scale for wading through reams of companies.In terms of the goldies,there are a lot of people had some big wins,but I've been buying us into it since mid 2017 and have had some chunky patches where we were mostly red..........I won't bore you with the list.I reckon we're level pegging with GDX.

If you want my Sancho Coma scale scores for any sector,then if I have it,jsut ask.

Big thing to rememebr is that there's investors from various backgrounds here all with different aims.If you're aiming to get a hosue then my Grandad had a saying,

'Noone ever went bust taking profits.

As @A_P has alluded,the best returns come from long term buy n hold-key thing is the price you pay,then let the divi's do their work.Me,DB and a few others could probably bore you witless with our stories of selling all our Whitbread/Compass back in the day and not leaiving the stake in to run it up.

[MvR]

9 minutes ago, sancho panza said:

As @A_P has alluded,the best returns come from long term buy n hold-key thing is the price you pay,then let the divi's do their work.Me,DB and a few others could probably bore you witless with our stories of selling all our Whitbread/Compass back in the day and not leaiving the stake in to run it up.

You're not kidding.  If I'd held my initial £50k stake in Apple that I bought in 2003, I'd have been worth well over £10m by now, and raking in £150k a year in dividends!   Oh well.. you live and learn, and I intend to apply this lesson to the PM sector and the reflation stocks next cycle.

[sancho panza]

 

5 hours ago, Noallegiance said:

Schiff reckons PM stocks are off to the races with this bull just starting. Is he wrong?

Schiff has been right a lot and wrong a lot.I'm with him on this one,but we're due a pull back to shake the tree.

2 hours ago, Talking Monkey said:

I don't doubt the bull in Silver and Gold coming up SP but in the bust there is a chance of an epic pullback before the  real pull gets started

Absolutely imho.We could run up the end of the weak dollar phase if we get one,and then see the PM miners get pummeled as in 08.A number of us here are on the look out for tells in terms of wehn to bail.Speaking to a family member the other day,I was saying that selling these PM positions carries a risk they may jsut run and run.But by then we'll have taken profits and deployed into other inflation hedges so if we miss out,so be it.Obviously,I'd like to sell as the weak dollar phase ends,move to UST's for a few months,then buy back the PM's for a fraction..........................head drops into cornflakes.I can but dream.

Interesting to note that having done some research for timing our exit,I have noted that the Gold Silver ratio bottoms at the gold bull peak,but sample is small but silver really does run late and hard,perhaps giving us the nod that the end is nigh.

 

31 minutes ago, MvR said:

My speculative options account is progressing nicely.  starting around $4000 back in February, it's currently up about 260% at $14500, with over 150% of my stake back in cash.  

Most of the realised profits are from GDX, and unrealised profits from the silver ETF SLV.   My SPY positions are down 50% as I wait ( hope?) for the equity melt-up David Hunter is predicting.  Maybe it will happen, maybe not, but if it doesn't at least I've more than covered my initial stake and I'll be in a position to re-assess and enter some new positions for next year. 

Here's where I'm at right now. Ignore the cost basis of these positions.. they don't give a clear picture due to various adjustments and profit-taking.

Each instrument's position consists of "ladders" of mostly long call options, and usually some short call options at higher strikes which I sold after the price moved up, in order to cover the initial stake.

Here's a drill-down of my SLV positions for example. Currently the overall position has a delta of 1826.. that is to say right now it's the equivalent of holding 1826 SLV shares. As SLV goes up, so will my delta. Each option contract is for 100 shares, so if we get over $23, i'll be controlling the equivalent of 13500 SLV shares ( and my account will be fluctuating rather violently! )

 In theory these positions can more than 10-bag from here if SLV hits $26 by January,  though realistically I'm aiming for less than half that as I take profits on the way up. So far ( touch wood ) I'm on track to make this year's ISA allowance, which was my initial aim, and if we get an equity melt-up this year too, I should do even better. 

I'm trying to be disciplined in selling or reducing positions as the markets move.. long options can turn against you quicker than they can move in your favour, so I'm not shy about locking in some of my gains, even if I think the market will go higher. 

As the old trading adage goes...nobody ever went broke taking a profit.

I'm definitely not recommending this trading style to anyone... just putting it out there for anyone who's interested. 

 

That's suoper stuff MvR.Which broker is that with.I'm keen to set us up with an options account in the US.Interactive Brokers still good as per your previous recomendation?

I'm going to risk some on some out of the money puts and calls on the moves I think are inbound.

 

By the way,I must be psychic as I quoted you before i'd read your post.....spooky.

[DurhamBorn]

@sancho panza indeed.I also sold Greggs at about £5.00 as well.Its amazing actually how much you simply ignore the noise and use your eyes and ears.Its like now,Cooplands bakers are expanding all over and miles better value than Greggs,if i could buy their shares i would.

Those ETFs were great,but we cant buy them now due to the KIDD rules.Shocking.Im going to replicate some of them though and use the numbers you have been putting up to select maybe 6 companies per sector.Printed money always ends up with the commods in the end.Its parked in the FANGS ,houses and bonds at the moment,but not for much longer.Gold is telling everyone whats coming next.Distribution cycle when wealth is sucked into only a few sectors.

Im going to nail down the companies i want over the next few weeks and get everything into position.

[sancho panza]

4 minutes ago, MvR said:

You're not kidding.  If I'd held my initial £50k stake in Apple that I bought in 2003, I'd have been worth well over £10m by now, and raking in £150k a year in dividends!   Oh well.. you live and learn, and I intend to apply this lesson to the PM sector and the reflation stocks next cycle.

Like I said,I could send you to sleep with mine but none as good as Apple.Our oilies/goldies/potash and pretty mcuh everything will get sold if I can identify that strengtehning dollar phase beginning.Otehrwise,we'll hold through the big kahuna.I'll take my chances on Statoil and BP rather than leaving it in cash.

[sancho panza]

2 minutes ago, DurhamBorn said:

@sancho panza indeed.I also sold Greggs at about £5.00 as well.Its amazing actually how much you simply ignore the noise and use your eyes and ears.Its like now,Cooplands bakers are expanding all over and miles better value than Greggs,if i could buy their shares i would.

Those ETFs were great,but we cant buy them now due to the KIDD rules.Shocking.Im going to replicate some of them though and use the numbers you have been putting up to select maybe 6 companies per sector.Printed money always ends up with the commods in the end.Its parked in the FANGS ,houses and bonds at the moment,but not for much longer.Gold is telling everyone whats coming next.Distribution cycle when wealth is sucked into only a few sectors.

Im going to nail down the companies i want over the next few weeks and get everything into position.

dn't realsie,but aren't there any UK based alternatives?

One good way of cutting the number of companies is to jsut move the market cap limit up from $1bn,always cuts a few off the bottom.I designed it to avoid the leveraged companies in sectors and jsut run a more conservative approach.With dealing fees as cheap as they are at II and HL,it's viable to do some smaller trades now.Especially with how high some of the smaller ones might go.

 

By the way.I'm reorganising our Godlies for the sit and hold phase,sold a couple of dogs today,tehn selling some mopre profitable trades that don't fit eg Detour/Teranga/Dundee.

 

Ref my psot above,I've been researching market top singlas for gold and the gold silver ratio is potentially viable here.Silver runs late into the bull and checks out rapidly.Crucially,it's far more volatile. and thus more potentially proiftable.Have you looekd at this?

I've been loading up with fres and HOCM(some more of the latter tmrw),you got a view on these?silver shares like these are looking cheap as chip compared to the ones I'm selling.

Bought first ladders in XOM/EQNR,OXY this evening.Loving HL and II,so thanks to all who reccomended.

[sancho panza]

11 minutes ago, DurhamBorn said:

@sancho panza indeed.I also sold Greggs at about £5.00 as well.Its amazing actually how much you simply ignore the noise and use your eyes and ears.Its like now,Cooplands bakers are expanding all over and miles better value than Greggs,if i could buy their shares i would.

Those ETFs were great,but we cant buy them now due to the KIDD rules.Shocking.Im going to replicate some of them though and use the numbers you have been putting up to select maybe 6 companies per sector.Printed money always ends up with the commods in the end.Its parked in the FANGS ,houses and bonds at the moment,but not for much longer.Gold is telling everyone whats coming next.Distribution cycle when wealth is sucked into only a few sectors.

Im going to nail down the companies i want over the next few weeks and get everything into position.

We're buying big oil mechanically over ten weeks.I see a good chance of a big tip down.

[MvR]

1 hour ago, sancho panza said:

That's suoper stuff MvR.Which broker is that with.I'm keen to set us up with an options account in the US.Interactive Brokers still good as per your previous recomendation?

I'm going to risk some on some out of the money puts and calls on the moves I think are inbound.

By the way,I must be psychic as I quoted you before i'd read your post.....spooky.

also @Cattle Prod

This account is TastyWorks ( entirely US based ).  I still use Interactive Brokers for my regular, mechanical, short options trading ( straddles, strangles etc ) as that counts as income rather than capital gains, and IB's Mark-to-Market ( M2M) reporting is perfect for this. The M2M figure, minus commissions, is what I give as my profit for the trading business.  I also use my IB account as my general "bank" account to keep capital that isn't allocated elsewhere. I can keep various currencies in it, move money directly to other trading accounts without going via my bank, and move quickly into anything I want. I reckon it's safer than the banks too.

TastyTrade is a simpler, nicer platform, but since it only accounts in dollars and doesn't do M2M,  I use it only for speculative trades which count as capital gains.  Another big plus for TastyWorks is their account minimums are very low, and since they are big on trading education via their TastyTrade site, they are happy to take on people with little or no experience, unlike other options/futures brokers. 

Depending on why you want a US account, it's worth remembering that if you open an IB account in the UK, it is via their UK subsidiary, so it's a UK based account, though you can of course trade US as well as any other markets and instruments in it.  (edit- actually this may not be true.. I seem to remember having a US based account with them many years ago, and maybe they still offer that )

[Barnsey]

DYOR of course but I've stuck a little into Platinum, interesting price action today off a low base.

[MrXxxx]

6 hours ago, sleepwello'nights said:

Its really annoying I've been hesitating on pulling the trigger on SSLN since it was mentioned on here in July. It fluctuated a bit until yesterday when its suddenly surged. Bugger.

I did the same with gold and am currently doing the same with committing to a portfolio...why?...its not that I believe the people on here do not know their subject, but I want to learn/understand what I am buying and the best way is being responsible for my own successes/failures.

[sancho panza]

9 minutes ago, MvR said:

also @Cattle Prod

This account is TastyWorks ( entirely US based ).  I still use Interactive Brokers for my regular, mechanical, short options trading ( straddles, strangles etc ) as that counts as income rather than capital gains, and IB's Mark-to-Market ( M2M) reporting is perfect for this. The M2M figure, minus commissions, is what I give as my profit for the trading business.  I also use my IB account as my general "bank" account to keep capital that isn't allocated elsewhere. I can keep various currencies in it, move money directly to other trading accounts without going via my bank, and move quickly into anything I want. I reckon it's safer than the banks too.

TastyTrade is a simpler, nicer platform, but since it only accounts in dollars and doesn't do M2M,  I use it only for speculative trades which count as capital gains.  Another big plus for TastyWorks is their account minimums are very low, and since they are big on trading education via their TastyTrade site, they are happy to take on people with little or no experience, unlike other options/futures brokers. 

Depending on why you want a US account, it's worth remembering that if you open an IB account in the UK, it is via their UK subsidiary, so it's a UK based account.   (edit- actually this may not be true.. I seem to remember having a US based account with them many years ago, and maybe they still offer that )

I'm jsut after an account where I can buy and sell US single company options.My UK broker has ceased trading them so I'm heading into the brave new world of online trading.

I've lsot a few quid trying to do it via IG and would rather have the limited laibility of an option.

[MvR]

1 minute ago, sancho panza said:

I'm jsut after an account where I can buy and sell US single company options.My UK broker has ceased trading them so I'm heading into the brave new world of online trading.

I've lsot a few quid trying to do it via IG and would rather have the limited laibility of an option.

I'd go for TastyWorks then, if that's all you need.  Just be aware that at some point you'll have a good few hours ( or days?) work to do in a spreadsheet to match all your buys and sells, and convert them all to the GBP, in order to calculate CGT.  Thankfully HMRC are happy for you to use the end-of-day rate, rather than the rate at the moment you placed the trade, which makes things simpler.

[sancho panza]

11 minutes ago, MvR said:

I'd go for TastyWorks then, if that's all you need.  Just be aware that at some point you'll have a good few hours ( or days?) work to do in a spreadsheet to match all your buys and sells, and convert them all to the GBP, in order to calculate CGT.  Thankfully HMRC are happy for you to use the end-of-day rate, rather than the rate at the moment you placed the trade, which makes things simpler.

Thanks for the advice MvR.

@DurhamBorn foudn this one on morning star,it's not the same as XLE but looks ok.

http://www.morningstar.co.uk/uk/etf/snapshot/snapshot.aspx?id=0P00013LFF

[Barnsey]

15 minutes ago, Cattle Prod said:

I enjoyed that action, no idea where it came from. People rebalancing from gold, maybe

Exactly, and maybe a little from Silver too? Minimal exposure but if it runs...

[Barnsey]

This could be part of the reason why Platinum is finally ticking up after long term suppression

https://www.reuters.com/article/us-china-economy-consumption/china-considers-relaxing-auto-purchase-curbs-to-boost-consumption-idUSKCN1VH146

[Talking Monkey]

8 hours ago, sancho panza said:

 

Schiff has been right a lot and wrong a lot.I'm with him on this one,but we're due a pull back to shake the tree.

Absolutely imho.We could run up the end of the weak dollar phase if we get one,and then see the PM miners get pummeled as in 08.A number of us here are on the look out for tells in terms of wehn to bail.Speaking to a family member the other day,I was saying that selling these PM positions carries a risk they may jsut run and run.But by then we'll have taken profits and deployed into other inflation hedges so if we miss out,so be it.Obviously,I'd like to sell as the weak dollar phase ends,move to UST's for a few months,then buy back the PM's for a fraction..........................head drops into cornflakes.I can but dream.

Interesting to note that having done some research for timing our exit,I have noted that the Gold Silver ratio bottoms at the gold bull peak,but sample is small but silver really does run late and hard,perhaps giving us the nod that the end is nigh.

 

That's suoper stuff MvR.Which broker is that with.I'm keen to set us up with an options account in the US.Interactive Brokers still good as per your previous recomendation?

I'm going to risk some on some out of the money puts and calls on the moves I think are inbound.

 

By the way,I must be psychic as I quoted you before i'd read your post.....spooky.

There's always the possibility we don't get a week dollar phase but I thought that things were far more skewed to a weaker dollar happening in the coming months as rate cuts get done and QE is seen as more and more likely by market participants. Would be interested to hear  view on the dollar direction in coming weeks months

[Yellow_Reduced_Sticker]

With all the EXCITEMENT here about the metals here, I just remembered my BV acc from last year.  I put in £6K for the long-haul & was buying Silver from £12.66 down to 11.23....bought total 4K of Silver and forgot about it DOH!

 

Just logged in, AND feck me 'ol boots its UP 23% ...looking at that chart I know i should SELL especially with all the talk here of a pull-back, it ain't easy this biz! BUT i'm going to do an Errol and hang on to my hat for the long-haul!

 

Anyway THANKS @DurhamBorn & others here for the input, when I we all going to meet up for fish&chips?