Credit deflation and the reflation cycle to come.

[Harley]

2 hours ago, sancho panza said:

this latest set of drops feels very different to the start of teh year.

They are.  That bounce unerved me.  And although I've mentioned bybacks before, it's just that kind of continuation thinking that usually accompanies a turn.  Although current prices must be tempting for some companies.  I have funds to put to work but am struggling.  May buy some div players tomorrow as a good spot to average in, accepting the risk of further falls, but the positioning and timing of other asset classes is hard and I'm reassessing daily right now.

[Harley]

2 hours ago, sancho panza said:

Any idea when the buy backs can start again?

After the "quiet period", ie. after a company has published its results.

[Harley]

1 hour ago, Barnsey said:

I see the excruciating zig zagging down over the next 18-24 months as quite possible, like 2000 all over again.

Me too, although maybe a bit quicker.  A slow stagnating death.  Nothing in the pipe to push stocks up other than they're cheaper (or rather less stupidly expensive).  Maybe the other markets like the zig zagging down DAX are showing the way.  Maybe talk of peak earnings as the narrative/cover (tax cuts being a one off).  Trump has already cya'ed with the FED and higher rates.  This is all the relatively easy part though viz where to shelter funds in the interim.

[Harley]

1 hour ago, Barnsey said:

Remarkably, 70% of S&P 500 stocks now in correction.

The S&P, bar a few key stocks, has been weak for some time now.

[Harley]

3 hours ago, Barnsey said:

Oh yeah, and the Wall Street crash of 1929 started on October 24th. Exactly 89 years ago.

And started with a fall, suckers bounce, and then plunge!

[Harley]

The older trades people around me have been saying things are bad for a few months now as they've seen it all before and can smell it a mile off.  The younger ones are still running around a bit unawares.  There's work but its small low grade stuff.  The merchants are still holding good margins but will be facing lower volumes.

[Barnsey]

The MSCI Asia Pacific Index has just officially entered a bear market, nothing to panic about 

[macca]

What UK FTSE listed Gold stock have you guys bought into if any?

I cant find any Foreign listed gold stocks on my share dealing account for INT..

[azzuri82]

9 hours ago, DoINeedOne said:

AMD crashes 25% https://www.zerohedge.com/news/2018-10-24/amd-crashes-25-after-revenue-miss-q4-guidance-cut

Semiconductor market is complete toast.

[azzuri82]

9 hours ago, sancho panza said:

I hate nights as well particualrly weekend nights-NHS,you can guess why...-

My reason for opting for 2019 for the big kahuna was buybacks.Are you still of the view it'll be 2019?I'm getting very unsure where we are... this latest set of drops feels very different to the start of teh year.

Worth noting HUI was a sea of red today,jsut down less than the  rest.

 

Have eyed a few Dow stocks and things like Visa which have gone up 10 times since the bottom in 09.The more I dig the more I'm finding.......

Visa is a good call. Even if buybacks do boost things a bit next month (which they likely will), perhaps this is really it, and there's no particular catalyst (like Bear Stearns) that people will be able to point to and say, "ahh, ok, this caused it!" People love a story/narrative, but perhaps the narrative is that in hindsight, everything was/is ludicrously overvalued and it all just started to unwind?

[azzuri82]

10 hours ago, sancho panza said:

I had plans to staircase in at 340,350,360,370.Shows what I know.I'll uopdate the short thread later.Added some Starbucks and facebook as well since we last liaised

Obviously, beware the bounce, but I'm firmly of the belief Netflix eventually ends up at zero. The cash burn rate is incredible. Who's going to keep funding this vanity project when money starts getting very expensive? It's just like Tesla.

Netflix's new bond issuances over the next few weeks and months will be very telling - if they can't raise enough funds to keep producing all this new content - the share price is going to tank. If they can't finance their operations for the next year or two - they're going to run out of funds pretty quickly. Which means they'll need to slash the vast majority of all this new content to stay solvent - which will result in a complete loss of confidence. The moment the worm turns on Netflix is going to be extremely interesting - I think it could go down fast - and hard.

When you look at all aspects of the company - it's a confidence trick, effectively a Ponzi scheme. When the confidence in it disappears - it's going to go "poof" in a very short space of time.

[DurhamBorn]

10 hours ago, sancho panza said:

You put a thought in my head and I had a look at the GDX chart and actually,that chart is way more stable and readable than any individual stock.Just saying.I never really check the ETF charts as I don't buy them.That'll teach me.

You got a view on the sort sell off we're facing here DB? Is it a crash or as Wolf argued t'other day,is it a drip drip sell off featuring rallies that lasts years.I was in that latter camp until the last few days,but even from oversold conditions-in my opinion-it's jsut not recovering.

I expect the S+P to fall to 2100 ,not sure on the way it gets there,but thats the roadmap for now.I expect the FTSE to be a tale of two markets,some stocks will hold their own or even go up while others are hit hard.Take a look at WPP today.

[kibuc]

Some miners reported Q3 earnings (negative earnings are still earnings, right?) yesterday.

Barrick - bad, oh so bad.

Goldcorp - truly, madly, deeply shite.

Newgold - now that's what I call a dead parrot.

Goldcorp were in fact so desperate to hide their absymal report that they immediately released a "resource and exploration update" right after it, which is now their main news.

[Democorruptcy]

When the talk turned to sectors signalling bad things ahead I thought about advertising and with the added bonus of the Sorrell exit I was tempted to put WPP in the short thread. WPP recently lost the top slot on market capitalisation to Omnicom and it's having a bad day today.

https://www.hl.co.uk/shares/shares-search-results/w/wpp-plc-ordinary-10p

[sancho panza]

 

11 hours ago, Barnsey said:

This does indeed feel much different to earlier in the year, I've got a lot of faith in @DurhamBorn's charting it's just the timeline I'm fuzzy on, whilst we've been waiting forever to crest the peak, DXY still seems to be predicted to strengthen >100 in the near term until there's a significant change in direction from U.S., last country standing as it were.

In regards to short rates, Powell can't reverse course just because of autos & housebuilders (yet), and can't be seen to be heavily influenced by Trump either, so barring a shock crash in November, Dec hike seems certain, but what happens thereafter looking increasingly dovish. Amazing the difference a few weeks make. Remarkably, 70% of S&P 500 stocks now in correction.

Keep seeing mid 2019 pop up as the key point where this reversal occurs, and from a variety of analysts/traders/economists that I've been following for a long time now and trust their methodology reasonably well. Naturally, if what we're seeing this week becomes self-reinforcing by pure fear then this could well be it, otherwise I see the excruciating zig zagging down over the next 18-24 months as quite possible, like 2000 all over again.

I guess we're at the point at which you might well lose out on whatever you allocate, just about minimising losses and seeing the macro picture ahead. I'm only focused on this side of the pond for my own modest allocations, lots of value to be found as widely discussed on here, yes a little inevitable downside risk when the recession hits but nothing compared to the FTSE stocks up in the heavens. Spent the past couple days setting up all my price alerts based on primitive long term trends, won't buy unless they're hit or close, otherwise cash is king on the sidelines.

Still lacking confidence to jump into GDX and GDXJ even though it makes sense long term.

That psot resonates with me particualrly the bit in bold..My issue ref Powell is whether with the scale of new issuance inbound can actually keep rates down without destroying the dollar???

I've been in the slow stagnating death camp for some time,seeing this as a market where I could gently ease shorts in and then let them run,but there was a point the other day when I took a load off that I wondered if I'd get back in again.-I did anyway-.I rushed a couple back onto LSL/Rightmove/Savills(I think EA's are f+@+#_).It was the emotion that was strange to me.

Your timing point of buybacks coming back in concurs with my read that there'll be some sort of rally-don't know where,don't know when etc

 

Ref primitive long term trends,that's what I use as the basis for a lot of my chart wortk,adding some nuances but the trend is your friend and the trend is now down.......possibly for everything lol

 

10 hours ago, onlyme said:

Ozark, one of the biggest US construction lenders in trouble. Lender to Kushner project, see 2nd link.

"Trouble In Arkansas": This Cycle's Countrywide Financial Just Imploded

https://www.zerohedge.com/news/2018-10-24/trouble-arkansas-cycles-countrywide-financial-just-imploded

https://www.bloomberg.com/news/features/2018-07-10/how-a-tiny-bank-from-the-ozarks-got-big-and-outpaced-wall-street

 

Interesting.I hadn't heard of them but they sound like a prime candidate for bankruptcy,some of the US big cities eg San fran are in massive property bubbles.

9 hours ago, Harley said:

Me too, although maybe a bit quicker.  A slow stagnating death.  Nothing in the pipe to push stocks up other than they're cheaper (or rather less stupidly expensive).  Maybe the other markets like the zig zagging down DAX are showing the way.  Maybe talk of peak earnings as the narrative/cover (tax cuts being a one off).  Trump has already cya'ed with the FED and higher rates.  This is all the relatively easy part though viz where to shelter funds in the interim.

I really appreciate that expression.Sums it up nicely harley.

9 hours ago, Harley said:

The S&P, bar a few key stocks, has been weak for some time now.

Yes,I think as per various discussions many indices have been held up by the strength of the big players eg Fang stocks or big oil/pharma in the UK.I'm ready for a rally here.You got a view?

8 hours ago, Harley said:

The older trades people around me have been saying things are bad for a few months now as they've seen it all before and can smell it a mile off.  The younger ones are still running around a bit unawares.  There's work but its small low grade stuff.  The merchants are still holding good margins but will be facing lower volumes.

People who've seena recession remember it.There's a lot of people around now that haven't witnessed one.

6 hours ago, macca said:

What UK FTSE listed Gold stock have you guys bought into if any?

I cant find any Foreign listed gold stocks on my share dealing account for INT..

Randgold but it's historically expensive imho,you'd be better searching through US based stocks for ADR's and as ever DYOR.

2 hours ago, azzuri82 said:

Visa is a good call. Even if buybacks do boost things a bit next month (which they likely will), perhaps this is really it, and there's no particular catalyst (like Bear Stearns) that people will be able to point to and say, "ahh, ok, this caused it!" People love a story/narrative, but perhaps the narrative is that in hindsight, everything was/is ludicrously overvalued and it all just started to unwind?

I think we've seen peak credit in this cycle.Some of the Dow stocks are have massively outgrown revenue/net income growth growth.I'm putting little bets on for now and spreading myself wide.

I think Visa is ludicrously over valued for what it is/where it operates.But there's more.I keep digging and I keep finding more compelling candidates than Barratts.....

2 hours ago, azzuri82 said:

Obviously, beware the bounce, but I'm firmly of the belief Netflix eventually ends up at zero. The cash burn rate is incredible. Who's going to keep funding this vanity project when money starts getting very expensive? It's just like Tesla.

Netflix's new bond issuances over the next few weeks and months will be very telling - if they can't raise enough funds to keep producing all this new content - the share price is going to tank. If they can't finance their operations for the next year or two - they're going to run out of funds pretty quickly. Which means they'll need to slash the vast majority of all this new content to stay solvent - which will result in a complete loss of confidence. The moment the worm turns on Netflix is going to be extremely interesting - I think it could go down fast - and hard.

When you look at all aspects of the company - it's a confidence trick, effectively a Ponzi scheme. When the confidence in it disappears - it's going to go "poof" in a very short space of time.

Netflix and Starbucks(Whitbread too) are unusual punts for me in that they're the wrong sides of long term trend lines but I find them compelling in differetn ways.Hence my intention to average in.I'll start on tesla today if we get the predicted £30 buck bounce.AS you say tehse could bounce viciously one way or the other,so I've raised my average in policy to 5/6 strikes rather than the normal two.The reason I guess is that like you,I think I need a policy that can keep me in long enough to profit from the inevitable collapse....and I think with both Tesla and Netflix-it's inevitable.

1 hour ago, Democorruptcy said:

When the talk turned to sectors signalling bad things ahead I thought about advertising and with the added bonus of the Sorrell exit I was tempted to put WPP in the short thread. WPP recently lost the top slot on market capitalisation to Omnicom and it's having a bad day today.

https://www.hl.co.uk/shares/shares-search-results/w/wpp-plc-ordinary-10p

WPP peaked in May 2017......Fundamentyally,is WPP- and I don't have the answer-equipped to survive in a world where online advertising via FB et al predominates?

 

Separate point.

S&P futures up 0.65%...

[Wheeler]

On 24/10/2018 at 09:38, DurhamBorn said:

Its incredible how bad DC pensions are.The funds offered in my old Glaxosmithkline pension are laughable.One of the biggest pharmas in the word yet a shocking choice.My new employer is the same a  massive company,yet the pension choices poor.It seems everyone has now decided that low fee passive trackers are the way to go.As a contrarian when the crowd all think one way is certain i like to be on the other side of that trade.

I keep seeing someone say at 55 with say £100k when the markets slide and its cut to £70k (at best),then its moved into the "lifestyle" section as most corporate DCs do about 7 years from retirement,,mainly bonds,just as inflation gets going and bonds enter a long bear.That £100k could end up at £35k if the timing is really bad.

I think passive trackers were a very good choice for a dis-inflation cycle as money flowed into markets,but that doesnt say they will be in a distribution cycle.My answer would be allow people with a SIPP to have their contributions from employers paid direct into that.

I've only one DC pension, dating from around '98 but it has a pension underpin where the company is guaranteeing that the value of the pension won't be less than a defined benefit one based on final salary and years of service. The current estimate is that the DC pot is only worth about 2/3rds of the DB equivalent. It's a pity that the choice of funds is so limited otherwise I'd put it all on something like GDXJ or even New Gold as there would be no risk to me!

[Harley]

18 minutes ago, sancho panza said:

Your timing point of buybacks coming back in concurs with my read that there'll be some sort of rally-don't know where,don't know when etc

And then?  Nada. 

[Harley]

20 minutes ago, sancho panza said:

Yes,I think as per various discussions many indices have been held up by the strength of the big players eg Fang stocks or big oil/pharma in the UK.I'm ready for a rally here.You got a view?

And that's why work (research) once again pays!  Happy days!

[Wheeler]

18 hours ago, sancho panza said:

But individually, some of these declines are not so sanguine anymore. This is how these seven stocks performed since their 52-week highs:

• FB: -29%
• NVDA: -25%
• NFLX: -21%,
• AMZN: -14%
• GOOG: -13%,
• MSFT: -7%
• AAPL: -4.7%

So three of the seven have plunged over 20% from their recent peaks, and another two are down 13% and 14%.

But Apple, by far the largest among the FANGMAN in terms of market cap (still over $1 trillion), is down only 4.7%. This covers up a lot of bloodletting in the smaller stocks. And Microsoft, the third largest with a market cap of $830 billion, is down only 6.7%.

 

I've just 2 tech stocks left in my portfolio: ORCL (down 13% on 52 week high) and NTAP (down 16%). Both are in a trading account that is outside an ISA/SIPP tax shelter so I was hoping they would hold on until April next year so I could make use of the CGT allowance and 10% tax band to cover the profits I've made in them. I think I'll cross my fingers and hope they can recover a bit over the next 6 months before I sell.

 

[Harley]

37 minutes ago, sancho panza said:

You got a view? 

I'm using the last few rays of sun to fill my ark!

If I stay in cash, they'll steal it from me. 

If I invest in anything, It'll probably go down, at least a bit to start.

Probably just have to hold my nose and jump into more of a "Permenant Portfolio" allied with averaging in to those good but beaten down individual (div) stocks.

All ideas appreciated!

[Harley]

3 minutes ago, Wheeler said:

NTAP

Oh no!  They still going?  Bought them way back in the tech bubble because of the good story.  Lost loads, as with Hannover Compressors (another good story).  God, I used to be really bad at this game, as opposed to "mostly harmless" now!  

33 minutes ago, sancho panza said:

People who've seena recession remember it.There's a lot of people around now that haven't witnessed one.

And so the seeds are sown.  Twas ever thus!

[Wheeler]

8 minutes ago, Harley said:

Oh no!  They still going?  Bought them way back in the tech bubble because of the good story.  Lost loads, as with Hannover Compressors (another good story).  God, I used to be really bad at this game, as opposed to "mostly harmless" now!  

And so the seeds are sown.  Twas ever thus!

Yes, I "lost" a load on NTAP between 2001 and 2002 or so when they dropped from something like $75 to $6 or so. Bought a load more at around $6 and then forgot about them for years. Could have sold last month at $85 or so! (all prices from memory and split adjusted).

 

[Noallegiance]

3 hours ago, azzuri82 said:

....and there's no particular catalyst (like Bear Stearns) that people will be able to point to and say, "ahh, ok, this caused it!" People love a story/narrative, but perhaps the narrative is that in hindsight, everything was/is ludicrously overvalued and it all just started to unwind?

Have you not heard of Brexit?

Sheep loose in the lane? Brexit.

No water on Mars? Brexit.

Holes in your socks? Answers on a postcard...

[Barnsey]

Futures indicating a bounce today, but then I see things like this that can't be purely coincidental...

 

[Harley]

1 hour ago, Wheeler said:

Yes, I "lost" a load on NTAP between 2001 and 2002 or so when they dropped from something like $75 to $6 or so. Bought a load more at around $6 and then forgot about them for years. Could have sold last month at $85 or so! (all prices from memory and split adjusted).

 

......the bad news keeps coming, thanks!