My first trade - Shell / BP

[KDave]

I was hoping for some £9 shell but had resigned to not seeing it again, my average is £11.16 a share now.

I have some BP and Repsol left to buy, then in October I am hoping to be buying gold again but if gold price goes against me which is looking likely now, then fingers crossed by Kmans chart I may have the opportunity to buy some more oil. 

I still can't believe how cheap these companies are, the market hates them. 

[Martysmith]

Tullow and Premier taking a beating this morning, may be more buying opportunities ahead.

[StackerCollector]

19 hours ago, KDave said:

I was hoping for some £9 shell but had resigned to not seeing it again, my average is £11.16 a share now.

I have some BP and Repsol left to buy, then in October I am hoping to be buying gold again but if gold price goes against me which is looking likely now, then fingers crossed by Kmans chart I may have the opportunity to buy some more oil. 

I still can't believe how cheap these companies are, the market hates them. 

If there's a second lockdown we will see shell trading way lower than £9. 

But even without a second lockdown the stock market will be made to crash and the blame will be put on Trump so he doesn't get re-elected. Loads of more buying opportunities ahead I am sure. Probably around October/ November. Looking to buy BP, Shell, Prudential, British Am Tobacco, Jpmorgan and Goldmansachs at a fraction of today's prices.

[KDave]

1 hour ago, StackerCollector said:

If there's a second lockdown we will see shell trading way lower than £9. 

But even without a second lockdown the stock market will be made to crash and the blame will be put on Trump so he doesn't get re-elected. Loads of more buying opportunities ahead I am sure. Probably around October/ November. Looking to buy BP, Shell, Prudential, British Am Tobacco, Jpmorgan and Goldmansachs at a fraction of today's prices.

Fingers crossed yes, I can't see a second lock down but I can see sub £9 shell in this market its incredible how hated oil is by the new generation of people, yet everyone still uses plastics, own cars, live in houses and drive on roads built by plant fuelled and lubricated with oil products who knew. Every good they buy is transported by shipping, trains, aircraft and road vehicles that use oil. Every person on the planet is a direct or indirect consumer of oil. But oil is dead right? So I keep hearing. 

Once inflation kicks in oil will lead the way up, as well as other first in the line products like fertilisers (potash) and anything linked to commodities, be it coal, natural gas, iron, copper, etc. I like Telecoms for the inflation reason as well, as their infrastructure has been built on the condition that prices are CPI linked and they have built that infrastructure using long term fixed debt, effectively they are building at a huge discount to inflation and will see a lot of free cashflow in a few years time. 

I have hit my allocation for Shell but if it goes sub £10 I will find money for more, I can't believe how cheap they are or how they have stayed so cheap for this long. There are so many opportunities now though and as I am buying monthly from wages it is forcing me to cost average in and make what feels like tough choices every month, I have a final allocation target split between oil, telecoms, infra and agri, with some dividend yield shares for diversification, BUT they are all cheap now with exception of the agri stocks that are still on the buy list (Nutrient and Mosaic, MOS has already doubled since march). 

I bought Repsol and Telefonica this month, I have a few more of each to buy to finish the allocation, very happy with the price I have paid. I also bought some BATS this month as part of the dividend/diversification allocation, I had not planned to until later in the year but I scraped together enough cash to start it off, then next month will buy more and finish Repsol allocation. 

You can keep the bank shares though, I am not a fan at all, although JP Morgan has the worlds biggest silver stack so I am told, I was surprised that buffet sold them to buy Barrett, does he not know about JP Morgans silver stack? Or perhaps he found out and dumped them because of it. 

[StackerCollector]

I like JP Morgan - too big too fail. Not a whole lot of dividend, but look at the dividend cover. Above 3.0 every year 👍

https://www.hl.co.uk/shares/shares-search-results/j/jpmorgan-chase-and-co-com-stk-usd1

Edited August 20, 2020 by StackerCollector

[KDave]

If you like banks why not HSBC - share price is at a 25 year low, 7%+ dividend;

https://seekingalpha.com/article/4366974-hsbc-extremely-cheap

Compare to JP morgan. Looks pricey although you said you are waiting for second lockdown and further crash so fair enough.

Too big to fail I like that, but I am not so sure its such a thing. That said I may have to rethink banks and add HSBC to the dividend/diversification list probably buy early next year when funds are available. I hate banks as gen-z hates oil, its just how I was brought up 

[KDave]

HSBC have no dividend for 2020 turns out they cancelled it, still cheap though. 

[Stacktastic]

4 hours ago, StackerCollector said:

If there's a second lockdown we will see shell trading way lower than £9. 

Its going that way now. Yesterday was horrendous. Its not haloing my stock portfolio as im currently £65 down

2 hours ago, KDave said:

Every person on the planet is a direct or indirect consumer of oil.

anything linked to commodities, be it coal, natural gas, iron, copper, etc.

You can keep the bank shares though

Especially air travel. 
Not a fan of banks, I don't fully understand them. However they are the reason we are in this mess so I dont want to support them. 

What would you say is the best thing atm? I saw today the helium is getting very rare, so would uranium be a good long term investment?
I was also thinking along the lines of fertiliser & food production industry? 

1 hour ago, StackerCollector said:

too big too fail

I would have thought that about Shell & BP this time last year, if this carries on for any amount of time, they will have to keep drilling & have no one to buy the product. 

Edited August 20, 2020 by Stacktastic

[Martlet]

1 hour ago, Stacktastic said:

I would have thought that about Shell & BP this time last year, if this carries on for any amount of time, they will have to keep drilling & have no one to buy the product. 

Already past the bottom of economic demand. The effects will be felt, rippling out for a while yet, demand wont go lower than it was and large number of wells even fields have ceased production. Some wont come back on line, so price should stabilise to somewhere $50-60bbl.

Edited August 20, 2020 by Martlet

[KDave]

1 hour ago, Stacktastic said:

Its going that way now. Yesterday was horrendous. Its not haloing my stock portfolio as im currently £65 down

Especially air travel. 
Not a fan of banks, I don't fully understand them. However they are the reason we are in this mess so I dont want to support them. 

What would you say is the best thing atm? I saw today the helium is getting very rare, so would uranium be a good long term investment?
I was also thinking along the lines of fertiliser & food production industry? 

I would have thought that about Shell & BP this time last year, if this carries on for any amount of time, they will have to keep drilling & have no one to buy the product. 

If you are saying £65 quid down after a couple of weeks is horrendous that is a big red flag unless you are joking. 

If you are a seller its not ideal, hardly horrendous, horrendous would be Shell announcing they are going bust. If you are a buyer lower prices are good, it means you can buy more for less next month. I don't understand the mentality that stocks should always go up. I read that 70% of investors want a market to be high and stay high, why? What is the logic? They are saying they want to pay more for stocks and keep paying more for them while they accumulate. What they should want is a market that is low and stays low as long as possible while they accumulate. The cheaper the better. Only a fraction want this apparently. I don't understand. 

Uranium I think is a good buy, though I am struggling to find a good fund or a company I like other than Cameco. There are loads to chose from but nothing I would want to invest in, they are mostly speculative, though I would be happy to doing it through a reasonably priced fund. A list of uranium stocks was put up on the forum and a fund, but the fund was very expensive to hold at nearly 4% a year, I am not willing to pay 40% over the decade to hold.

Potash stocks are a good bet, you want to buy the commodity that is at the start of the chain. The farmer needs to buy fertiliser regardless of the price and then try to pass on his increasing costs (inflation related) to his customers, the supermarkets, who in turn will try to pass that on the consumer, but the further down the chain you get the less benefit you get from inflation. Likely the supermarkets will eat a lot of the inflation and take the biggest hit, the farmers too. The farmer might only get part of his costs, so it is through the chain. The start of the chain is where you want to be.

Telecoms companies are pricing linked to CPI by agreement with ofcom to build the new infrastructure. They will benefit from inflation, and while consumers will cut back on everything out of necessity, they will not get rid of mobile phones or internet providers (well, that will go last). Prices will rise and they will pay the higher price. Increased cashflow to telecoms companies will be passed on to investors via the dividend. That is why I am investing, yet the market hates them. The market is looking backwards. People are buying gold and silver out of inflation fears and not looking at the markets for the same or better opportunities. 

Who the hell knows though, perhaps we get another decade like 2010-2020 and no inflation. I doubt it but its possible. As is a stronger dollar, if it reverses and goes significantly higher then deflation becomes likely and all bets are off, systemic collapse is on the cards. Gold will be where you want to be then. 

[StackerCollector]

19 hours ago, KDave said:

If you like banks why not HSBC - share price is at a 25 year low, 7%+ dividend;

https://seekingalpha.com/article/4366974-hsbc-extremely-cheap

Compare to JP morgan. Looks pricey although you said you are waiting for second lockdown and further crash so fair enough.

Too big to fail I like that, but I am not so sure its such a thing. That said I may have to rethink banks and add HSBC to the dividend/diversification list probably buy early next year when funds are available. I hate banks as gen-z hates oil, its just how I was brought up 

Too big to fail certainly applies to the largest US banks. They are "system-relevant." That's why I choose JP Morgan.

HSBC is losing and will likely lose more money in their asian markets. At £1.50 and lower I will consider buying. But they need to do some serious restructuring to get into decent profit area. I do not like their dividend covers:

https://www.hl.co.uk/shares/shares-search-results/h/hsbc-holdings-plc-ordinary-usd0.50

2019: 1.00 (they paid out all of their profits! non-sequitur)

2017: 0.94

2016: 0.14

Ridiculous dividend policy of theirs - borrowing money to pay the shareholders. WTH?  As a comparison, JP Morgan has a dividend cover of 3.0 for every year. These are much more healthy numbers.

 

[5huggy]

IMHO- "follow Warren Buffet"! - get out of any part of the banking sector 😉👍

[Stacktastic]

34 minutes ago, 5huggy said:

IMHO- "follow Warren Buffet"! - get out of any part of the banking sector 😉👍

He still has a lot of banking and finance shares including the bank of America, VISA etc. Something makes me think that it might have been one of his BH staff that made this move as he is usually quite predictable. Almost to prove that they can make money with PM. I think they will go all in on more mining now as it has rallied quite a bit since their purchase, so he can see that its not 'useless'. Or it's a move on that specific mine & he wants to hold large assets in it in the future - let's face it its a very safe bet. Then again it might be a false flag to get people out of banking so they can then get in when they crash, which i think will happen. Like mob wars, its a way to clean out the bad blood. Not a bad analogy as its quite close to the truth.

Shell is still plummeting. Wish i had waited now, or put less in. I think I am going to invest £1,500 in this. Gonna wait for a reasonable bottom and then average - when everyone is back to normal is when the oil will start really flowing again, so many people are still at home all over the world. The dashed line is where I bought at. makes me feel a lot better when i zoom right out 😛


 

BP

Edited August 21, 2020 by Stacktastic

[5huggy]

1 minute ago, Stacktastic said:

He still has a lot of banking and finance shares including the bank of America, VISA etc. Something makes me think that it might have been one of his BH staff that made this move as he is usually quite predictable. It's either a "hey Warren, wake up, give me 500 million and I will turn it into 3 billion in a year, its just small change dude - then you will see". I think they will go all in on more mining now, or it's a move on that specific mine & he wants to hold large assets in it in the future. Then again it might be a false flag to get people out of banking so they can then get in when they crash, which i think will happen. Like mob wars, its a way to clean out the bad blood. Not a bad analogy as its quite close to the truth.

Shell is still plummeting. Wish i had waited now, or put less in. I think I am going to invest £1,500 in this. Gonna wait for a reasonable bottom and then average - when everyone is back to normal is when the oil will start really flowing again, so many people are still at home all over the world. The dashed line is where I bought at. makes me feel a lot better when i zoom right out 😛


 

A possible "hedge"/ "diversification! tactic might be - BP- as they are going balls out to go green! (more so than Shell)

ergo attract the greenies! 😉👌👍

Just a thought IMHO!

Also if you get some more RDS at a lower price - then £/cost average will lower your initial! 😉

[Stacktastic]

12 minutes ago, 5huggy said:

A possible "hedge"/ "diversification! tactic might be - BP- as they are going balls out to go green! (more so than Shell)

ergo attract the greenies! 😉👌👍

Just a thought IMHO!

Also if you get some more RDS at a lower price - then £/cost average will lower your initial! 😉

Yes and this will be the kick in the nuts to do that for lockdown no2. 

I tend to think that Shell could survive a recession better. As per the long term, don't know with regards to leaving fossil fuels as everyone and thier dog is at it. 

Might buy another £200 on each I think. 
Edit too late - its going back up again. 9-10 period seems like a good time to execute and order on average. 

Edited August 21, 2020 by Stacktastic

[Martlet]

20 minutes ago, Stacktastic said:

I tend to think that Shell could survive a recession better. 

Why?

[AndrewSL76]

I have spent a few too many hours trying to learn about the ins and outs of basic trading. I am still struggling but having fun with small amounts of money in some of the usual suspect accounts. One thing I did scratch my head over was the difference between Class A and Class B shares in Shell. All about Dutch Tax, it seems - though their website seems to suggest UK residents can claim the 15% back..........

https://www.shell.com/investors/retail-shareholder-information/information-on-shares.html#:~:text=Class A ordinary shares and,see note 1 - Taxation).

Can anyone with more experience and knowledge put this into simple English? I have not bought into Shell yet and may not - but any thoughts would be very welcome; recognizing that it would not be financial advice, of course!!

If it is obvious and I am being an idiot - is there a website that explains this - to save you the time and pain of typing!!??

[StackerCollector]

53 minutes ago, AndrewSL76 said:

I have spent a few too many hours trying to learn about the ins and outs of basic trading. I am still struggling but having fun with small amounts of money in some of the usual suspect accounts. One thing I did scratch my head over was the difference between Class A and Class B shares in Shell. All about Dutch Tax, it seems - though their website seems to suggest UK residents can claim the 15% back..........

https://www.shell.com/investors/retail-shareholder-information/information-on-shares.html#:~:text=Class A ordinary shares and,see note 1 - Taxation).

Can anyone with more experience and knowledge put this into simple English? I have not bought into Shell yet and may not - but any thoughts would be very welcome; recognizing that it would not be financial advice, of course!!

If it is obvious and I am being an idiot - is there a website that explains this - to save you the time and pain of typing!!??

https://www.fool.com/investing/general/2013/05/28/3-things-to-loathe-about-royal-dutch-shell.aspx

Living in the Uk, that's why I bought B shares.

[StackerCollector]

2 hours ago, 5huggy said:

IMHO- "follow Warren Buffet"! - get out of any part of the banking sector 😉👍

Yes. And get back in when their shares are dirt cheap 👍

Waiting for:

JP Morgan £20

HSBC £1.50

Goldman Sachs £45

[KDave]

4 hours ago, Stacktastic said:

Shell is still plummeting. Wish i had waited now, or put less in. I think I am going to invest £1,500 in this. Gonna wait for a reasonable bottom and then average - when everyone is back to normal is when the oil will start really flowing again, so many people are still at home all over the world. The dashed line is where I bought at. makes me feel a lot better when i zoom right out 😛

Your last comment is the right perspective, look long term. You bought them cheap, can they get cheaper - Yes. If you are not selling why do you care? If you are still buying why is it not "great shell is plummeting! Now I can buy more shares for less money"? 

You should not care about the share price if the company has not changed. That was the red flag yesterday, now the bold highlighted today is another red flag, this focus on the share price suggests you are speculating on the shares and not investing in the company. 

Has anything fundamentally changed about the company the reason for investing in Shell? 

[KDave]

This is the kind of thing I love to read, articles like this are a great contrarian indicator. The whole perspective is looking backwards;

https://seekingalpha.com/article/4369696-dont-let-oil-stocks-ruin-your-retirement

 

[KDave]

https://seekingalpha.com/article/4370008-coming-inflation-boom-is-going-to-catch-lot-of-people-off-guard

If you want some encouragement instead read this one 

Low prices are the cure to low prices

[Kman]

11 minutes ago, KDave said:

https://seekingalpha.com/article/4370008-coming-inflation-boom-is-going-to-catch-lot-of-people-off-guard

If you want some encouragement instead read this one 

Low prices are the cure to low prices

Can inflation come before the economy gets back on track? 

Maybe wrongly but my understanding is at the moment that lack of jobs and recession will mean lower consumer spending so no inflation  because less currency in circulation

Unless they continue furlough schemes or introduce UBI of course which is looking more like;y

Edited August 21, 2020 by Kman

[Roy]

I don't know anything, but I see house purchases are on the rise. 

People want inflation.

[Kman]

3 minutes ago, Roy said:

I don't know anything

Clearly, because If you did you would have answered my questions on your thread 😛