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Deflationary collapse and the Reflation Cycle to Come.


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Just now, Sancho Panza said:

Warren Buffet has a great phrase that if 'you're willing to hold a share for ten minutes,you should be willing to hold it for ten years.'

My experiences of winning and losing over 25 years have steered me toward picking an asset class/share that's undervalued and then sitting in it until it becomes a 'momo' favourite.I've always had an eye for good value but my biggest weakness over that time has been selling early in the uptick-Whitbread,Rolls Royce,Unilever.....I could go on and on and on.

Many of my best winners have suffered significant pull backs after purchase.As have some of my biggest losers.The key to long term growth is to be able to read the newsflow and ascertain whether what's occurring is noise or a sign of a more fundamental change in outlook for either the share or the asset class.

Dont even go there SP,i bought Rolls at 80p sold it at £3.00 went on to above £12 i think.Done similar many times.Worst one ever was a tech stock in the boom.I sold a big holding for 20% profit three days before it 15 bagged over the following two weeks.Im talking home in the country money.That one really hurt,i even remember the name,Staffware.

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Rather than put my thoughts in other threads about how i see the end of this cycle playing out i thought a thread dedicated to this would be a much better idea.Many other posters here have some great

How convenient.

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27 minutes ago, durhamborn said:

Dont even go there SP,i bought Rolls at 80p sold it at £3.00 went on to above £12 i think.Done similar many times.Worst one ever was a tech stock in the boom.I sold a big holding for 20% profit three days before it 15 bagged over the following two weeks.Im talking home in the country money.That one really hurt,i even remember the name,Staffware.

yar, at least you didnt do a newton and buy back in to go over the cliff with it.

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1 hour ago, Sancho Panza said:

Warren Buffet has a great phrase that if 'you're willing to hold a share for ten minutes,you should be willing to hold it for ten years.'

Complete finance virgin here. After reading this thread for a year I opened an HL account intending to buy TLT, then that all went south and I lost my nerve. Never really feel I can get on board with any of this therefore frozen in cash. What's the strategy for those of us who are ehh no longer spring chickens and don't have the luxury of long timescale to repair any bad decisions?

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23 minutes ago, Funn3r said:

Complete finance virgin here. After reading this thread for a year I opened an HL account intending to buy TLT, then that all went south and I lost my nerve. Never really feel I can get on board with any of this therefore frozen in cash. What's the strategy for those of us who are ehh no longer spring chickens and don't have the luxury of long timescale to repair any bad decisions?

TLT sank to about 118 by the time Nucleus finally released my pension to HL. So I just took a punt and bought a chunk. Then another chunk. And then a third. All at about where it’s at now. We will see. 

Meanwhile I bought other stuff in chunks too. Cancelled the odd order here, tweaked here and there. Tried to minimize fees as I went. Gradually overall pictures and mix started to get clear and now happy with the mix. 

Up til this morning I was starting to think I had too much in miners, PHGP and SSLN. Decided stop losses were needed. This morning found out that because both had gone down a wee bit HL had sold PHGP and SSLN and returned me the money. Fair enough...

So today I got more of this and more of that and gave up on the stop loss craic because I don’t see how they can help.

Things need time in the market I reckon. And keep adding new money if possible, as efficiently for Tax as possible. And it’s hard to know which ones will grow the best. So I’m going for the best mix I can.

As for starting later... there’s a bit in The Wild Geese where the RSM looks at the overweight and ageing mercenaries assembled in the training camp in Africa and it’s really simple. He just shouts something like “Right. Let’s all try for our first heart attack, shall we?!”

I just got stuck in.

 

Edited by Thorn
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55 minutes ago, Funn3r said:

 What's the strategy for those of us who are ehh no longer spring chickens and don't have the luxury of long timescale to repair any bad decisions?

money worked for will always be viewed in a different way to investment gains. in my younger days as a twenty something i would think nothing of risking a grand or two down the casino once a week..  Now being maxed out on premium bonds is the height of my risk reward structure. 

although i like the look of some of the crypto more volatile with big gains in a short space of time if you get them right. 

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I have to admit, for the small amount i put in, crypto was the wildest ride,  you were either euphoric or depressed, there was no in between, the losses were real and huge %age wise, as were the gains. I quite like it, but im not playing with the farm and if it all goes to pot then ill put it down as an experience rather than a life defining moment. Its a bit like every so often i throw 50 quid into lotto scratch cards and play it down to zero, and thats my fix over and done with for another 6-12 months.

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Quote

 

Pound falls below $1.37 after April manufacturing data disappoints

IHS Markit said the weakness in manufacturing was largely linked to producers of consumer goods. They have been particularly hard hit by the reduced spending power among households caused by last year's rise in inflation.

"On this footing, the sector is unlikely to see any improvement on the near-stagnant performance signalled by the opening quarter's GDP numbers," IHS Markit director Rob Dobson says

 

 

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22 minutes ago, TonyJ said:

GBP dropping again today. Now into the $1.36s. I imagine, on its current rate of decline, DB may well be correct to think it could go as low as $1.

USD is a pig, but thanks to the Fed tightening its a pig in a dress, high heels and wearing lipstick.

As was said on here, Carney and Draghi needed to be following the fed and raising but didn't or couldn't. Interest rates wont send the zombie companies under, but currency fluctuations sending raw material prices to the moon (but not selling prices) will do it for them.  They cant fight the markets forever.

Edited by Majorpain
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27 minutes ago, Majorpain said:

USD is a pig, but thanks to the Fed tightening its a pig in a dress, high heels and wearing lipstick.

As was said on here, Carney and Draghi needed to be following the fed and raising but didn't or couldn't. Interest rates wont send the zombie companies under, but currency fluctuations sending raw material prices to the moon (but not selling prices) will do it for them.  They cant fight the markets forever.

Eventually inflation leaks into energy prices and commodities and it's game over for orthodox Keynesianism (oil can be used a store of value or a liquidity substitute when necessary). The day of reckoning was suspended this time by using debt to extract otherwise unviable shale oil/gas deposits. That was never going to create true longevity in the production base but it already appears to be losing traction.

Edited by zugzwang
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1 minute ago, TonyJ said:

So we have the lowest interest rates in history, and still people are stopping borrowing. Don't they call it 'pushing on a piece of string'? 

Perhaps it's also that lenders aren't as willing to lend. Either way, it looks deflationary.

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Quote

North Korea Is a Bright Spot for Billionaire Who Forecasts Crash...

He said in an interview Monday that he believes gold prices will rally further, reaching $1,800 per ounce from just above $1,300 now, while “overvalued” stock markets crash...

https://www.msn.com/en-gb/money/news/north-korea-is-a-bright-spot-for-billionaire-who-forecasts-crash/ar-AAwzT6o?ocid=spartanntp

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15 hours ago, Thorn said:

TLT sank to about 118 by the time Nucleus finally released my pension to HL. So I just took a punt and bought a chunk. Then another chunk. And then a third. All at about where it’s at now. We will see. 

Meanwhile I bought other stuff in chunks too. Cancelled the odd order here, tweaked here and there. Tried to minimize fees as I went. Gradually overall pictures and mix started to get clear and now happy with the mix. 

Up til this morning I was starting to think I had too much in miners, PHGP and SSLN. Decided stop losses were needed. This morning found out that because both had gone down a wee bit HL had sold PHGP and SSLN and returned me the money. Fair enough...

So today I got more of this and more of that and gave up on the stop loss craic because I don’t see how they can help.

Things need time in the market I reckon. And keep adding new money if possible, as efficiently for Tax as possible. And it’s hard to know which ones will grow the best. So I’m going for the best mix I can.

As for starting later... there’s a bit in The Wild Geese where the RSM looks at the overweight and ageing mercenaries assembled in the training camp in Africa and it’s really simple. He just shouts something like “Right. Let’s all try for our first heart attack, shall we?!”

I just got stuck in.

 

Yes I've sacked the stop/loss thing aswell. But I'll still keep a close eye in these uncertain times. If it tanks then I'll add more (or panic and sell the rest :) instead of trying to be clever timing the markets. Good dividend payers are what's needed I think. Live and learn...every day!

My strategy is, I have no strategy. Seat of my pants?

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13 minutes ago, TJHooker said:

Wonder if the BoE will wheel anyone out this week to talk GBP up again, hope so as i'd like to buy some IBTL

I'm sure you'll get a chance, these things don't progress linearly ?

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Watching the chart about Apple Inventory in shock.

thank you Majorpain that is quite a find. No mention of that on any of the financial sites.

If that isn’t making the headlines what else are other consumer-facing businesses hiding.

Dont want to lose out on any future stock market rising gains and want to minimize fees etc...but for the trackers the old fingers are getting a bit jumpy over the sell buttons.

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