KDave

Interesting post thanks, yes I am not confident enough to trade either, I tried my hand at elliot wave a couple of years ago with a forum member but could not get to grips with it in regards to consistency, effectively for me it was no better than choosing higher or lower on a slot machine but with limited downside with the correct set up. Its more an art form, a systematic art form. I follow a couple of commentators that do trade (chris A) and some that do not, I have more respect for the ones who do trade because of the additional factors involved in that process which makes it a glorious event when you win but it hurts when they get it wrong on the short term. 

2 hours ago, Kman said:

One major thing regarding oil price is it's close relationship to bond yields, QE forces down bond yields, this is oil (green) with 30 year bond yields (red)

How is oil price going to go up any meaningful amount? if you know they correlate and you know there's one one way for yields to go

 

 

This is very interesting it should tell you something important about the nature of oil, as like the monetary nature of gold. The monetary nature of oil. And they say the petro dollar is dead. I see the loose correlation is in the trend, yet late 2019 the correlation is strangely exact, around September is it (QE began at the FED). That could be an indication in itself perhaps (monetary). Oil does need to drop a bit more to regain true correlation (and to kill of shale) and then move sideways for the rest of the year to form a bottom with rates, then we have both technical and fundamental reasons to reverse the trend. Keep an eye on that one, good spot. Or I could be talking rubbish and the worst is coming - perhaps negative rates are on the way and oil can go to zero to correlate (deflationary collapse). 

3 hours ago, Kman said:

 

I was right it was just coming up to test before resuming down but it was the long red trend line instead of a horizontal support I'd drawn in

If I owned shell that would have been the perfect place to take a sell to hedge and be able to buy 20% more shares for the money vs averaging in 

 

Looking at it closer I've drawn in a channel it looks to be travelling down in

 

I don't know the fundamentals to guess just how low it could go, would need to know

• What areas of their business are most profitable
• How covid has effected those areas
• Have they had to take on new debt and how is it financed 
• When will oil demand + price likely be favourable for them again 
• Have they had to make fundamental changes to survive that would prohibit  them from being as profitable even if oil price+demand is getting healthy

I know they're down billions, I think it would something like -20 billion on a normal year

Looking at economic data it doesn't look likely things will improve too much in the next few months but maybe they will, if they do it will show on the charts. Are you guys all using technical analysis?

I'd have very similar questions about Rolls Royce, why is now the bottom? I've not seen anyone give an explanation as to why now is the time to buy

Well done on the price targets did you trade it? Where next do you think based on the charts, is that a support line at 893 or just another line. Fundamentally well I can tell you a story about debt, assets and covid but it will make no difference short term, no one knows which way it will go, even the charts will only tell you a story but with probabilities instead. The times I have timed anything well it was luck, gold included. 

I have listened to a macro podcast today, their theory is that oil will not recover until 2021 with WTI $80-$100 by end 2021, I think that is a bit optimistic at these prices, I was expecting later and more time to keep buying. Ideally I would want oil prices to fall from here and stay low to kill off shale, then I would agree with end 2021 thesis.

To me the charts I am looking at are telling me a story of 25 year lows in several major companies, a rare opportunity to invest in companies that provide a commodity critical to the economy. I am also being told a story that oil is dead by the same people who called gold a pet rock in 2015. Long term this will be seen as a buying opportunity just as gold was 5 years ago, unlike gold I hope to more than double my money I expect at least 200% return from here in a few years time including dividends. We will see 

5 hours ago, AndrewSL76 said:

I bought in at 101.3.......if the news is correct re the 10 for 3 at 32p then I am happy with that.

Well done if calculations are right £1.06 is the equivalent pre-placement/recapitalising price of 32p so you have bought at a lower price than new investment coming in on 27th October.

Just now, Stacktastic said:

Damn you !!!!

Im £500 down now.

£500 down if you need the money today

Shell at £8.96 I could not resist. No gold for me this month. 

@HGr RR. is recapitalising, 10 shares for 3 at a new share price of 32p, hoping to raise £2 billion from new issues as well so its a dilution, plus they are making £1 billion in bond sales. To be confirmed at the next share holder meeting on 27th October (in other words its already decided).

Its not as bad as it looks if my working out is right - 10 shares at 32p vs 3 shares at 121p, 320/363 = 88% of equivalent value or a 12% haircut from dilution is that right? Could be worse if so. I would factor in sentiment as potentially by 27th October the current share price could be lower and a better buying opportunity before the recapitalisation happens, we will see. 

Edit - 88% of current share price = £1.06, that would be equivalent post dilution issue value, if it drops below that then new investors at 32p are paying more than market value, that should give you confidence but given the market is all sentiment who knows what could happen short term. 12% down is hardly worth worrying about, being in the red for a while for a long term investment is nothing. I know what I am doing this month, compare the defence companies and find the change behind the sofa.

What is the 80p target based on? I would not worry too much about fool articles, you can read 2 or 3 of them and get opposite opinions from each, then head to seeking alpha and get the same, then go on the silver forum.... opinions are everywhere. 

Like I say I need to have a look into the balance sheets and compare to its peers in the sector, that would be BAE and Boeing off the top of my head (defence/engineering), its something I will look at next year. You can't have everything there are often more opportunities than cash.

59 minutes ago, HGr said:

Today I bought some BP and Shell, I thought I wouldn't see anything as low as March again. Will double down if they go much lower. Had some Shell around 13.50 a few months ago, but I got a bad feeling and sold it at 13ish to buy gold instead, happy I did that. 

Rolls Royce also sucks right now! So I bought some ☺️

 

Well done a good day today for buyers. I have enough now in shell and BP and no immediate targets, next buying will take place at sub £9 and £2 respectively as a 'too good to miss', otherwise I will end up buying next years full allocation before this years Christmas. 

RR is very tempting I have been watching it since £2, but I know very little about the company other than my perception that it is a UK strategic asset given how in bed it is with the military (tech/engineering wise). I think its a good long term bet but I need to have a good look into it. I have bought VOD and FP recently, I would like some more FP then next on the list is AT&T to go along with my other telecoms stocks, decent yield on that one at the moment.

I was 12% down this morning as a portfolio average, logged on to count my dividends. Only metals and tobacco in the green. I am very happy with that, ideally it will stay down as long as possible, lower would be good. Wages and dividends need somewhere to go 

A Russian penny has dropped;

https://seekingalpha.com/news/3617863-rosneft-calls-bp-and-shells-shift-to-renewables-existential-crisis

Attacking their shift towards renewables, Russia's Rosneft (OTCPK:RNFTF) lashed out at BP (NYSE:BP) and Royal Dutch Shell (RDS.A, RDS.B) for creating an "existential crisis" for oil supplies.

"I think that to go away from your core business, which is what they are doing, somebody will need to step in... somebody will need to take that responsibility," Rosneft's Didier Casimiro told the Financial Times Commodities Global Summit. "It is an existential threat for supply. It is an existential threat for price volatility... we will have a [supply] crunch, price volatility, and yes higher prices."

3 hours ago, Kman said:

Higher bank reserves and lower loaning standards would be inflationary as long as the demand for loans is there

The higher a banks reserves the more it can lend, they don't lose any reserves from giving out loans that currency is created out of thin air through fractional reserve lending

Sure and excess reserves fell from 2015. Looks to me as if the banks were lending against excess reserves, RPI confirms inflationary pressures entered in 2015, banks were lending/consumers were borrowing. Currency was being created out of thin air against reserves that were created in the years before via QE. 

3 hours ago, Kman said:

I think the problem is, look at how much money has been spent already that hasn't expanded anything economically, merely kept heads above water

I think by the time you get the economy to back where it was with unemployment levels, consumer spending, loans etc that will probably take 5-7 years. In that 7 years you've got all this new debt to be paid back and things are only where they were at the start of 2020

Growth up from a bottom but only getting back to previous levels 5-7 years ago + massive new debt doesn't seem inflationary

You are not wrong on what has happened, it is exactly that, replacement of what was lost only. What happens next I think a lot more QE and spending directly, it won't be the banks only QE combined with government austerity this time imo, but we will see. 

OK I will have a look and for now I take your word for it, though part of me has doubts that it may be a interpretive reading of recent events where the FED stopped banks using QE funds for buy backs and bonuses? 

I can't quite 100% agree academically that QE is deflationary in itself but it is an academic argument as in reality it does allow those conditions to develop. But it is the act of government/corporate/household borrowing followed by repayment and servicing of borrowing that takes dollars out of the system, it is government bonds at maturity, and the servicing of debt that is deflationary. QE is enabling more government and corporate bond sales, so I guess from that perspective QE can be said to encourage deflationary conditions, but I think I would struggle to find the correlation on a chart, mainly because deflationary conditions are the cause of QE. At least that is how I look at it, without the deflationary conditions what need would there be for QE? 

The idea of QE is to facilitate borrowing, which I agree borrowing has an ongoing deflationary effect in its servicing (interest rates) and is deflationary at the end on repayment. But what happens to the dollars in the meantime is potentially inflationary, or the additional dollars have inflationary potential. If its being held on bank reserve as in previous QE, then the inflationary effect is not realised until that money is mobilised. Banks sat on most of that QE money for a long time last time around, until around 2015 when reserves started to fall (inflationary);

On 28/09/2020 at 01:43, Kman said:

If the lending occurs immediately and borrowing is spent on things, then the effect is immediately inflationary and long term deflationary, though the balance depends on what that money is spent on (whether we get a return on the borrowing, or a return on investment - for example on infrastructure spending). 

That is where I think we are heading personally. I believe the government will basically direct the market by spending in certain areas which will then spread out. Infrastructure being the main one I am expecting, around which industry will grow. This will be funded by borrowing at low rates (enabled/facilitated by QE), the window will last for as long as QE lasts. The issue then is, longer term, when government can no longer borrow and the artificial market demand disappears, leaving a new sector developed in a borrowing bubble to find new customers or go bust, while the deflationary effect of borrowing also comes home to roost and exacerbates (rising interest rates to combat the inflation). Then it is reset time, I reckon end of the decade. 

3 hours ago, Kman said:

1. The Bank has $1 that already existed
2. Gov: can I borrow that $1 and I will give you back $1.01 in a year? here's an iou 
3. The bank now has an iou for $1.01 and the government can spend the $1
4. The Fed: I will take that iou please for $1.011 but I'm going to exchange it for dollars in an account you can't withdraw from
5. result: There's still only $1 in circulation and when its repaid $1.01 we will be -$0.01 from where things started

Out of interest where does the FED say banks can't use the dollars it creates, I will take your word for it. If the FED does say that, does QE not still increase balance sheet reserves from which to lend against anyway (making the restriction irrelevant). The government will be right back after step 4 to borrow some more, followed by the FED, etc - liquidity is increasing all the time, along with inflationary potential of all those additional dollars. 

Lets say QE is itself deflationary because of the destruction of dollars at the end of the process, by the example a 0.01% deflationary effect from QE, but after how long? Until the dollars are repaid we see no deflationary effect? How big is the deflationary effect, are we talking 0.01% as per the example or is it more than that, because it would have to be more and to be over a short time frame to be a factor in the equation, rather than after 30 years we see a 0.01% deflationary effect from repayment of a long bond. In other words if QE is deflationary, is it anything more than academic vs the inflationary potential of the increased money supply?  

A new dollar is created and given to a bank. All things being equal, there is inflationary potential in the new dollar. If the banks sits on the dollar its not the dollars fault. 

In our case currency (dollars) are being destroyed and hoarded by repayment of debt and saving, and the banks are not lending new dollars. This is in part due to government response to a flu virus killing off everyone's job prospects and destroying the economy. The BoE sees the deflationary conditions developing and steps in to lower interest rates and create new currency, this time it gives some to the banks to encourage them to lend, and it gives some to the government. The government does not sit on those dollars it gives them out and makes it rain. Rishi Sunak gives Gordon Brown a run his money. The balance between dollars being destroyed vs dollars being given out by government (and banks) is enough to counter some of the deflationary pressure. However, the activity that was being performed previously with those dollars is no longer possible because the economy is shut down and the psychology/attitude remains that everyone is still hoarding in anticipation of job losses. So is QE deflationary? Or are the conditions coinciding with the need for QE deflationary. 

QE was in response to deflationary conditions in the money supply. It does not remove dollars from the system it adds them. Dollars are being removed from the system but not by QE. 

The government will lead the economy out of the mess it has caused and will be facilitated by the central banks (more QE).  Historically government have done this by spending on public works and infrastructure and something similar will happen this time around, hopefully anyway because I am positioning for it. We will have to wait and see. 

58 minutes ago, Kman said:

We've had a decent amount of QE, stimulus, you could apply for loans deferrals etc 

Why is RPI going down?

Deflationary pressure is winning out. It was spotted by the FED late 2019. September onwards they tried to introduce liquidity using the old fashioned QE, it was not enough despite what the season uptick says (Jan/Dec). In March Covid came along to exacerbate the problem and provide the opportunity to test injecting liquidity directly into the economy. This was done to stave off the deflationary effects of the government response to Covid only; the stimulus replaced what was lost (furlough, wages, etc). Replace what was lost and the problem you had before is still there, here we are. 

Deflation won't last if it occurs, because one of two things will happen; either we live through systemic collapse, or central banks conjure up more liquidity and get government to put it where it is needed.

I have listened to arguments that QE itself is deflationary and causes deflationary conditions. Its an interesting argument but for the reality that tightening does not cause inflation, so it can't be correct. For example - the FED stopped QE Jan 2015, RPI started a little bull run in the years after, does that mean the deflationary effects of QE stopped between 2015 - 2017 as the argument claims? That stopping QE started inflation? Does it not more likely tell us the inflationary effects took time to enter the system? Given the nature of the previous QE programs (and austerity). 2017 as another example - the FED started tightening mid 2017 - logically by the QE causes deflation argument, RPI should have rocketed up. All of that deflationary pressure being reversed by removing QE from the balance sheets, where were the calls for impending hyperinflation? But deflationary conditions came back, notice not straight away. So there is a lag in the effect of tightening (which is deflationary) and there is a lag in the effect of QE (which is inflationary). It takes time for liquidity to move through the system and that gives the leads and lags. Late 2019 the FED spotted the deflationary problem they had caused, and started increasing its balance sheets again in an attempt to increase liquidity the old fashioned way (2008 QE style). Fortunate that covid hit in march and they could test out the next generation QE, we will see a lot more of that. 

The calls for hyperinflation following the March 2020 version of QE - this was never the risk. Deflation was always the risk over the last 12 months, September 2019 onwards they started to respond. We will see inflation when the FED and central banks size their response properly yes, but not hyperinflation, in these conditions post covid it is impossible. The RPI chart tells you that more QE is coming (or a reset) and going from past performance that they will likely over do it as they did on the other end into late 2019 tightening for too long.

The RPI chart says there are leads and lags, and liquidity takes time to enter/show up in the system. 2016 - 2017 was 2015 FED's inflationary lag, 2018 - 2019 was 2017 FED's deflationary lag. Direct into the economy is the only option now to avoid as much lag as possible, so we will see a lot more of that imo. Government will be spending it, central banks will be facilitating it. 

14 hours ago, Kman said:

If your short term outlook was negative would you ever take a sell position rather than averaging in going down?

Taking a sell instead of a buy, if it went down 10%  and you exit your position to buy then you would be getting 20% more stock with the original monetary amount right?

If the stock goes up then the money you already have in would counter the loss of the sell position on paper; It would be aggressive but an interesting way to go

They said they would let inflation go over 2% but I think that was hot air

Yes you could do that if you are confident there are lots of ways to do it, you could combine a number of approaches. One commentator I follow treats 40% of his Shell holding as short term trading and keeps the other 60% as the long term hold and tries to increase that holding by trading, but it doesn't always go his way and requires a lot more work. It needs to be systematic to be worth doing I think, as the system is there to manage the human side of what we are doing; trying to time the market like that based on a short term outlook requires energy and work, causes stress, adds emotions to the equation, leaves more room for mistakes thanks to the human factor. But its another way to do it, sure, aggressive as you say (emotional), more risk more reward. I have a lot of respect for people that manage to combine technical analysis with a long term thesis, Christopher Arron is someone who does this with metals and has made some great calls in the past on silver for example, trading short term uptrends and downtrends to make money to add to his long term long position. However it doesn't always work and recently he got the short term picture very wrong, this will have cost him and his followers, but if he is right more often than not then its just part of the net positive equation.

On the FED better to look at what they and other central bank arms are doing not only what they are saying. QE to keep interest rates low (long bond yield) while adding enormous amounts of liquidity directly into the economy through various mechanism, directly to businesses, governments and the man in the street, so this is not the QE of 2009 to provide liquidity to the banks, this is for the whole economy. More will be coming, most of it directly to government as it is the only way out other than deflation and reset. 

The BoE pension fund is 90% index-linked bonds and corporate bonds (linked to RPI no less). What does this signal. They are telling you in every way they can what they are doing, they are positioned for it and they are working toward it because it is necessary. They are talking about it and telling everyone what to expect. If we don't see inflation its because they messed up by failing to print enough and cause a deflationary collapse. It is possible. 

This is how I think about it (not advice); See an opportunity long term. Establish how much exposure you want in this long term opportunity. Offset the risk associated with short term timing by using cost averaging and setting aside cash for targets to the downside. Now most of the negative emotion has been removed from process and watching prices fall becomes something to celebrate, sitting on a paper loss becomes easy. Sure you can think "if only I waited I would have more shares" but if it went up you would be thinking the opposite, the process is a timing risk/reward trade off. Any movements to the downside are no longer something to worry about. With dividend payers its even easier - you are paid to wait for the expected outcome and increase cashflow throughout the process. 

Of course I could be wrong and everyone else right on oil. That is why the first thing to do is establish how much exposure you want and work from there, I have hit my 2020 targets now. If we see further downside I will consider buying some of next years allocation early, otherwise I aim to be back on the metals next week, especially silver.  

The more articles come out hammering oil, the stronger the thesis 

1 hour ago, HerculeHolmes said:

Returning to normal is taking a lot longer that I'd hoped. 3 weeks they said... Now we're into a second wave (or so they claim, personally I am very suspicious about the numbers) and can't help but feel a conspiracy theory atmosphere in the air like it's all to do with stopping Brexit and replacing Donald Trump and desensitizing us into living in a less free world. This is not the same world we were living in 1 year ago.

But I am hopeful (if that's the right word) that oil is still going to be the big thing for decades to come. I've started putting some cash into Shell and BP on Trading 212 (about £700). Maybe I should be using a different platform.. I don't really know much but Trading 212 is the only one I've used so far. Gotta start somewhere though.

Buying BP at 25 year lows what is not to like. The downside is possible, risk of further downside vs reward of potential upside, you make the call, you know what I think. Always a chance they go bust of course, tentative is definitely appropriate with share picking in a contrarian/hated sector. If it was easy all the monkeys would be doing it. 

Returning to normal will not happen for a while yet, logically the 'Conservatives' (Stalinists with a 9 year plan) will want to see out winter first, with flu season on its way and a population with weak immunity due to being separated from each other all year. It will likely be the worst flu season we have seen for a long time, plus corona virus on top. After that, maybe the Stanlists in charge will let us back out of our prison cells, I don't think people will put up with it for another year. Account also for all the horror stories coming out from hospitals regarding euthanasia, critical race theory reintroduced into society by BLM, all the job losses that are coming, inflation, higher energy bills, etc - unrest will start to bubble over. They can't keep us locked down forever or we will see another poll tax riots equivalent and likely worse. 

For oil supply is as much a part of the picture as demand, supply has cratered and inventories are being burned through a lot faster than expected. However ideally I would want to see oil fall below $40 again for a while to reap the best long term gains, flush out the rest of the fracking companies and the smaller players, then the majors can cherry pick the best assets and after that cut capex as no new entrants will be coming into the market for years. They will have huge cashflow in a couple of years time which they will use to pay down debt, spin off dividends and share buy backs. BP should return roughly 20% compounding per year between dividends and share buy backs (6% yield + 15% of cash into buybacks as announced).

Its not going to happen smoothly in the timeframes that government wants, it will take drastic measures to implement and have far reaching consequences to our standard of living and the competitiveness of the UK economy. The initial target was 2050 all electric, reasonable, if unlikely, now they have said they will stop people buying conventional vehicles from 2030! All electric by 2030 is insane, 9 years from now there will be no conventional vehicles on the roads only electric? The only way to achieve that is with huge subsidies for electric along with tyrannical measures, including the stick of financial penalties for using conventional, though some of the later is coming anyway in the form of higher oil prices. The economic cost will be enormous and we will price ourselves out of competition against non EV nations. Anything we do or produce will have the huge overhead of expensive transport/commute tagged on to the price, while other nations carry on with oil and undercut and enjoy a higher standard of living. Nothing about it is good for the UK or its people. Likely that is the reason they are doing it.  

The result of achieving this will be to take two thirds of the cars off the road, as you say, too expensive for 90% of people to buy - this will force most people to use mass transport or walk/bike everywhere. A huge drop in standard of living. Most people will not be buying and maintaining electric cars at the prices they will command when demand is 95% higher. The state will make driving something for the elite and well off (that's how they like it). This would solve the issue of congested roads and it would have far reaching economic repercussions; the covid economy is perhaps a good glimpse as to what it would look like. People working from home with the rest on a form of UBI (furlough), perhaps that is what covid has been about all along, getting people used to working from home, quiet roads and UBI. The artificial trigger needed for the test run reform of the economy. Regardless, unless they keep covid going for the next 9 years the 2030 goal is not happening, once things return to 'normal', people will not play ball until they are given incentive to do so and no one is going to deliberate hamstring themselves by increasing transport costs either personally or in business. How many white van men are going to hand over the LGV for an expensive electric equivalent? How many businesses are going to sell the fleet of cheap cars for the enormous capital and ongoing cost of an electric equivalent? How many people are willing to give up convivence of a diesel or petrol car for the privilege of monthly battery rental whether they drive it or not. 

This is just the UK. EV sales are only currently 2% of global car market. Oil is going no where soon from the big picture, it doesn't matter what action they take here. Also consider that China is the largest EV market in terms of take up in the world now, they also have the cheapest electricity costs in the world because they burn coal to produce it. They understand economics and that energy is everything, they also could care less about the climate nonsense as there is nothing 'green' about any of this EV stuff. As soon as you start digging you work it out pretty quickly and are left wondering why we are pushing this nonsense so hard to our detriment.

Fair value of a company is a judgement on many factors, assets and share price sure, but in this case that judgement heavily depends on where you think the oil price is going in the future. You know my opinion on inflation and what I think will happen to the oil price. For the companies I looked backwards based on last years financial reports on $64 oil, comparing annual reports and comparing metrics in order to rank them, Exxon came out top Shell second, Shell had the highest revenue of all the majors in 2019, largest company by assets, best return on capital employed, best return on assets, decent quick debt ratio, highest income before tax, but it has more debt than Exxon, less per share income, almost 4 times as much long term debt, etc. I am not too concerned about long term debt due to inflation expectations. BP is the worst of them based on last years performance, has the worst balance sheet regarding debt, etc, but has half the short term debt that Exxon had. I am not concerned about its debt, especially after the FED told us inflation is coming. That is looking backwards, looking forwards take that $64 oil and double it in 3 years, triple it in 5 years, etc. Q3 will be interesting to see how they are getting on, I expect they did quite well all things considered, as oil has averaged around $40 for most of the quarter. A lot has happened this quarter in regards to the noise around renewable electricity and hydrogen. Shell buying oil developments in Africa, these will not be producing oil for 5-7 years, this tells me they know they will still be an oil producer beyond that time frame despite all the noise. Shell and Microsoft partnering up. It won't be long until the market starts to see value, whether it is fair or not is a judgement call. 

Everyone thinks oil is dead. I have read several articles around this theme recently far in excess of the calls from 2015, even the oil companies themselves are at it (BP). Instead people have been investing in Tesla and equivalent thinking everyone is going to need electric vehicles and no oil. Sure people will need them, but they are not going to be lining up around the world to spend $60k on an electric car next year, maybe in 10 years when there might be a significant amount of electric vehicles on the road, but until then what are people going to need? Have we found a replacement for plastics? How high does the price of natural gas need to be for hydrogen to be viable? Who is positioning themselves now to provide that hydrogen and given the prices of conventional energy to support said hydrogen, what do they know? 

The market is still looking backwards thinking more of the same is coming in regards to the monetary conditions (wrong), then it is looking forwards 10 years in to the future and seeing it happening next year (wrong). We will see in time. At the moment I am not seeing many people calling to invest in oil, though I have had a couple of tentative emails from various subscriptions calling attention to a few of the companies. Won't be long.  

1 hour ago, Stacktastic said:

Well done with Shell, I should have done that, but it was my first trade and I am not in that bad position. 

I shall just put a sell order on it I think at the price it hits a positive. i will leave 50% in each account as i will kick myself if it never goes down again. same with a couple of my mining stocks I will sell it all though and reinvest in only a few mining stocks on a dip (like Barrat). I can then reinvest if or when it goes down again in a similar fashion as you have. I am learning patience as well as good timing, as i got a very nice position in the WTI a couple of weeks back. 

Im looking at  a short play on paper silver I think if it keeps plummeting. £16 an ounce is a good target I think as it will certainly go up again. 

I have not sold to buy back lower, I have just been buying all year since March, cost averaging in and keeping some aside for bigger buys at low points if they came. The target for the money set aside was for £9 shell initially but I used most of that early to get the average below £11. I have no money for £8 shell should we see it, maybe we do who knows. Patience is good, key, I don't have enough of it so use systems where possible to take some of the strain off the human side and let the system work out what to do. I have also learned in the past that my timing is more luck than judgement which is why I average in and also keep some cash on the side for those opportunities (luck). I set targets to the downside at which to buy and if I don't get them then so be it, the averaging process will fill out my target eventually.

I am not sure about selling half to buy later idea, I used to do that on the way up, to take some cash off the table but its a sign you don't know something or something is missing from the plan. Is half your long term position and half for trading? Fair enough if so but just selling at breakeven would be a sentimental/emotional red flag if I started thinking about it (not rational or target driven). If you do sell at breakeven without a target then you must deal with one of two scenarios 1: you sell and it drops - now what do you do, wait for it to drop more? How long do you wait, how far do you let it drop. What if it starts going back up do you buy then, or do you wait for it to drop again? Scenario 2: you sell and goes up - now what do you do, wait for it to drop so you can buy back in? What if it keeps going up..... you get the picture. If you have targets you have worked out in advance then fair enough, otherwise you will just allow yourself to be led by the nose by the market and likely do the wrong thing. Emotions are part of the process but should not be the driving factor, if I had listened to this myself I would have a lot more £9 shell and less £10 shell but there you go. 

October is when I am looking to start accumulating metals again, maybe we get a few months to do so with a bit of luck. 

1 hour ago, Stacktastic said:

WOW - What a week end! I was £120-140 on each stock, which is not too bad as I have £1500 in each.

What are peoples opinions on selling this stock if it tips back in the positive (like in the 7th Sept)? I am pretty sure that there will be a second lockdown of sorts so sitting on the cash might be a plan, plus I may also need the money? Maybe sell half & cost average if it hits another low like Friday or even the rate its on now? I dont think its too bad if you look at the bigger charts to be fair, but it would be nice to get an even better average. If it goes up and does not come down at least I have 50% invested. I could do with the spare cash anyway. 

If you can get the timing right then fair play I have not worked out how to trade the short term movements myself and stick to buying with longer term targets in mind. 

Sentiment is very low despite a higher average oil price over the last quarter and results coming soon, I don't know what people are thinking but you can almost taste the fear at these prices.

Yesterday I finally bought shell at 973, a triumph of sorts as I have been holding that money for months. I missed the lowest it got yesterday as I was not paying enough attention (at work). I also bought more BP at 237 and added Total (FP) to the oilies to go along with Repsol and prior to ex-dividend, decent yield on Total now. That is the last I will put in to oil this year (maybe) as I have been neglecting telecoms which are also still very cheap, hopefully they stay low for a bit longer and allow me to get in.

Those four appear to be attempting to set up and take as much share of the non existent hydrogen market as possible while they continue to produce oil and gas. All of these renewable electricity buys are being done in order to use it themselves, BP has gone heavy into it PR wise, though oil and gas will still be needed and at a much higher prices for hydrogen to be viable in regard to cost. Between them all they must know something. 

24 minutes ago, Stacktastic said:

I think it will go a lot lower, but the March low will be a figure it will hover around though. 

How do I work out the £ price out of interest, based on this. What number would it be??

I have a put for £100 for 1020 today. I think it will hit that. 

I looked at the charts, turns out its not a good way to find the exact number £9.44 is not accurate as the low, it appears lower on more detailed charts. I am struggling to find the exact low back in March, on the more detailed chart it looks around £9.10-£9.20 between midday 18th March to midday 19th March, about 24 hours before it was back above £10 again, so the window was small, perhaps you are right to set targets on auto. 

For entry prices, when I started I set targets as to how much I wanted to invest into each sector, divided into companies, then took an initial position at the current price. I then hold back cash and set price targets to the downside, nothing technical just psychological levels, with plans to cost average in monthly otherwise. I use wages to cost average in then if we get a big sell off I have the cash ready to go where I want it to. There are likely much better ways to do it. I had actually finished cost averaging into shell from wages and the cash I kept held back for sub £9 was going to go elsewhere, but as my average had risen above £11, I couldn't help myself and kept nibbling away at these lower prices. I bought again at £10.11 the other day, if we actually see sub £9 shell it won't make much difference to the average. I will buy the last lot once I see the number 9 to be honest.  I have been more disciplined with BP, I bought initially at £3.07, then set targets at £2.80, £2.60 and £2.40, two out of three so far, again if we don't see the lower price its not the end of the world, I just cost average in until the target is hit, almost there now. The plan is also to reinvest dividends into them though ideally I want to be buying other sectors on the list and will probably use the funds for those. I have neglected VOD at these low prices and will probably regret it, but you can't have every bargain if you want to keep some cash.  

WTI is 8% lower today, shares are falling with it. I have the lows for shell at £9.44, hopefully we get there again before things turn around.

24 minutes ago, Kman said:

@KDave thanks

Yeah I'm just trying to get a better idea of oil price/production/inventory/demand and where the sweet spot is

I was looking at 2007-8 and the oil price going from $52 in January 07 to almost $150 July 08

it seemed to do a lot for Chevron but not so much other major western oil companies - Shell was the same price at $77 per barrel or $130 a year later

I assume that's because despite the high price the demand just wasn't there, or maybe the high price also hindered demand? 

The perfect conditions for oil stocks seem to have been 2009-2014, that's where I'd like macro data from to try and work out when we could see those conditions play out again. Maybe it was just low dollar+ economic growth 

It also made me wonder, during times of high oil price but low demand is that a time for smaller oil stocks to do well instead of majors? ones that can be profitable doing things at prices they wouldn't usually be able to make a profit on

2008 recession - using your figures oil went from $52 to $150 - bottomed at $52 Jan 07, gradually rose causing a recession which started in December 2007 and oil peaked part way through the recession in 08. Leads and lags. The same pattern predicated the previous 2 recessions in 1991 and 2000, both saw oil bottom around two years before recession started. Stocks bottomed sometime after that. That included oil stocks by the way.

It is complicated, especially in regard to stocks and returns vs the oil price;

https://theconservativeincomeinvestor.com/the-big-oil-crash-of-the-1990s/

Not really sorry I have nothing that you would find useful for charting/timing it is a weak spot for me for sure. But I don't look at it like that, my foundation is based on a currently weak understanding of macro-economics and value investing. I keep an eye on the rig count purely for academic purposes, and I visit oilprice.com for obvious reasons, it has some good articles on there that gleam interesting insight now and again, a bit like gold-eagle.com has editorials about gold, most of it is noise. Rigcount will tell you a tiny bit about supply, but its only half the picture and so useless (academic), as for tankers and storage I have no idea, if I knew it wouldn't change my thesis, long term its noise. I know you can buy access to that information.

I say the oil price bottomed in April because of the monthly prices, look at this;

https://www.indexmundi.com/commodities/?commodity=crude-oil&months=60

You need to go back a very long time to see oil that low, even before the death of oil in 2015, it has bottomed imo. That doesn't mean that BP or Shell or any of them have bottomed though, share prices are 90% sentiment. The 30 year chart in that link is interesting.