My first trade - Shell / BP

[KDave]

10 year US bond is creeping up, likely the FED will be along to smash some more QE in soon. 

https://tradingeconomics.com/united-states/government-bond-yield

3 hours ago, Kman said:

 

https://markets.businessinsider.com/earnings-calendar

• 27th - BP
• 29th - Shell
• 30th - Exxon
• 30th  - Chevron

@KDave I'm only negative on oil for the near future (unless something fundamentally changes), I just don't think we've found the bottom yet but time will tell 

Sure oil might drop further, or it might not. What is the downside now you reckon? Risk/reward downside vs upside must be in favour on the charts now surely?  

I can't help myself I just keep buying, Shell earlier this month for sub £9, never thought I would see it, today I have bought a few more BP for £2. Payday I was looking for some more Total, even with French dividend tax the yield is decent and its the best one of the majors imo. I think as with the sovereigns we were buying back in the day, in a few years we will look back at these prices and think it unbelievable. But who knows! 

[HGr]

If they have had a bad quarter it might be another nice dip. I have been trying to save more this month for exactly this kind of thing, still managed to accidentally buy some silver, I wish I had saved it for shares now! 

Another one I have bought recently is SSP, who have gone down 10% since, so I will pick up more next month. 

I will look into Total. There is lots on my watch list at the minute, way more than I can buy

[HerculeHolmes]

I've put £1,200 into Royal Dutch Shell because it sounds like a safe enough investment  (I at least don't expect to lose money on it) but really I have no idea how much it's going to be worth 5 or 10 or 15 years from now. Will it go back up to it's old 2018/2019 value, or will it NEVER return to that level?

[JunkBond]

On 02/10/2020 at 12:15, JunkBond said:

I will buy more RR if we see sub 100.  Also going to buy more BP if it gets to 200.

Bought more BP at just under 200 earlier today.

[KDave]

26 minutes ago, HerculeHolmes said:

I've put £1,200 into Royal Dutch Shell because it sounds like a safe enough investment  (I at least don't expect to lose money on it) but really I have no idea how much it's going to be worth 5 or 10 or 15 years from now. Will it go back up to it's old 2018/2019 value, or will it NEVER return to that level?

Shell will make returns over the next few years in accordance with rising oil and gas prices. The market thinks oil is dead about 30 years too early hence the market gift of £9 shell and £2 bp (insane yield on BP at this price).

Returns depend on how high oil goes, for shell $60 oil is $20 billion free cashflow, at $70 its $30 billion, so on and so forth. When inflation picks up oil will be 3 digits mid decade, I expect new all time highs. Depends on how low it goes and how long it stays there over the next few months. 

[Stu]

OPEC are due to make a decision on production levels next month. If they fail to set a limit, it could see prices a lot lower and provide a further buying opportunity. I’m keeping my powder dry until this announcement. 

[HighlandTiger]

1 hour ago, Stu said:

OPEC are due to make a decision on production levels next month. If they fail to set a limit, it could see prices a lot lower and provide a further buying opportunity. I’m keeping my powder dry until this announcement. 

good, because next months buy will be my old employers BP. A drop in price would be nice.  

[KDave]

Worth listening to the interview, it will help understand what is coming once the FED has had enough of deflation. 

[Kman]

On 21/10/2020 at 20:32, KDave said:

10 year US bond is creeping up, likely the FED will be along to smash some more QE in soon. 

https://tradingeconomics.com/united-states/government-bond-yield

Sure oil might drop further, or it might not. What is the downside now you reckon? Risk/reward downside vs upside must be in favour on the charts now surely?  

I can't help myself I just keep buying, Shell earlier this month for sub £9, never thought I would see it, today I have bought a few more BP for £2. Payday I was looking for some more Total, even with French dividend tax the yield is decent and its the best one of the majors imo. I think as with the sovereigns we were buying back in the day, in a few years we will look back at these prices and think it unbelievable. But who knows! 

Fed are constantly doing QE but they might ramp it up - https://www.newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/treasury-securities/treasury-securities-operational-details

I didn't realise loans were still being deferred "On Aug. 8, 2020, President Trump directed the Secretary to continue to suspend loan payments, stop collections, and waive interest on ED-held student loans until Dec. 31, 2020."

They're also still not doing evictions and a lot of people are living rent free - https://www.reuters.com/article/us-usa-housing-eviction-insight/times-up-after-a-reprieve-a-wave-of-evictions-expected-across-u-s-idUKKBN27415U

"It has been a nightmare year for many of America’s renters. The local, state and federal eviction bans that gave them temporary protection in the spring began to lapse in early summer - ensnaring renters like Bean in the gap. September’s reprieve by the CDC, which protected many, but not all, renters will expire in January.

At that point, an estimated $32 billion in back rent will come due" 

It's amazing that despite the record stimulus it's achieved nothing in terms of stimulating anything in real world only bubbling stock/pm/collectible prices etc; unless they further extend the deferrals billions of dollars are going to be sucked out of circulation for debt in January and the velocity of money is going to be in the gutter, super deflationary 

This goes against what you just posted above but I haven't listened to it yet 

Quote

Sure oil might drop further, or it might not. What is the downside now you reckon? Risk/reward downside vs upside must be in favour on the charts now surely?  

Downside who knows, depends on oil demand & prices and how long until people start to see a recovery around the corner; the fact oil stocks are struggling would suggest there's not much optimism yet about either demand or price increasing (all though in the past 24 hours oil stocks seem to have a little uptick) 

What I'm hoping to see on the charts is a nice clear shift in trend, perhaps a bottoming pattern - the dollar in 2018 is a good example 

There's different bottoming patterns but basically it's just the price has stopped falling, generally trading in a tighter range ~15% up and down, a top resistance is established over a decent length of time, when it breaks out of that you know a corner has been turned and it's a positive signal to buy

Edited October 23, 2020 by Kman

[KDave]

32 minutes ago, Kman said:

Fed are constantly doing QE but they might ramp it up - https://www.newyorkfed.org/markets/domestic-market-operations/monetary-policy-implementation/treasury-securities/treasury-securities-operational-details

I didn't realise loans were still being deferred "On Aug. 8, 2020, President Trump directed the Secretary to continue to suspend loan payments, stop collections, and waive interest on ED-held student loans until Dec. 31, 2020."

They're also still not doing evictions and a lot of people are living rent free - https://www.reuters.com/article/us-usa-housing-eviction-insight/times-up-after-a-reprieve-a-wave-of-evictions-expected-across-u-s-idUKKBN27415U

"It has been a nightmare year for many of America’s renters. The local, state and federal eviction bans that gave them temporary protection in the spring began to lapse in early summer - ensnaring renters like Bean in the gap. September’s reprieve by the CDC, which protected many, but not all, renters will expire in January.

At that point, an estimated $32 billion in back rent will come due" 

It's amazing that despite the record stimulus it's achieved nothing in terms of stimulating anything in real world only bubbling stock/pm/collectible prices etc; unless they further extend the deferrals billions of dollars are going to be sucked out of circulation for debt in January and the velocity of money is going to be in the gutter, super deflationary 

This goes against what you just posted above but I haven't listened to it yet 

Downside who knows, depends on oil demand & prices and how long until people start to see a recovery around the corner; the fact oil stocks are struggling would suggest there's not much optimism yet about either demand or price increasing (all though in the past 24 hours oil stocks seem to have a little uptick) 

What I'm hoping to see on the charts is a nice clear shift in trend, perhaps a bottoming pattern - the dollar in 2018 is a good example 

There's different bottoming patterns but basically it's just the price has stopped falling, generally trading in a tighter range ~15% up and down, a top resistance is established over a decent length of time, when it breaks out of that you know a corner has been turned and it's a positive signal to buy

Its not really amazing, record stimulus during the pandemic = has at best replaced what was lost - ie - not inflationary. The liquidity is now sat there in the system however, and more is coming. 

Have a listen to the podcast interview at least its worth your time. 

Dollar going higher/deflation kicking in is a risk, but the response will be to print every time. The alternative is as you say massive deflationary pressure which will lead to collapse. Very low chance of it and if it does happen none of this will matter. Otherwise short term who knows where it goes. Long term, much easier to see.

[Kman]

On 23/10/2020 at 15:58, KDave said:

 

 

Have a listen to the podcast interview at least its worth your time. 

I've listened to the first 10 minutes and I'm going to give up 

He just said "I think the bond bull market is about to end after 38 years" what with the Fed as guaranteed buyers? 

What better market to be in than having the Federal Reserve as guaranteed buyers, how can that fail

 

 

[KDave]

22 minutes ago, Kman said:

I've listened to the first 10 minutes and I'm going to give up 

He just said "I think the bond bull market is about to end after 38 years" what with the Fed as guaranteed buyers? 

What better market to be in than having the Federal Reserve as guaranteed buyers, how can that fail

 

 

Did you listen to what Kelton had to say, she outlines how government and economists (central bankers) will justify the massive spending that is coming for infrastructure. Direct FED to government borrowing and spending (and the justification for that). The rest of the podcast take it or leave it honestly. The interview is 30 mins or so long, I forget where it is exactly sorry. The end of the bond bull yes that is where we are, at the cycle turn from consumer debt cycle to industrial cycle, already I hear the term 4th industrial revolution though I think its currently being used in a limited context and will be used more in hindsight.

[Kman]

12 minutes ago, KDave said:

Did you listen to what Kelton had to say, she outlines how government and economists (central bankers) will justify the massive spending that is coming for infrastructure. Direct FED to government borrowing and spending (and the justification for that). The rest of the podcast take it or leave it honestly. The interview is 30 mins or so long, I forget where it is exactly sorry. The end of the bond bull yes that is where we are, at the cycle turn from consumer debt cycle to industrial cycle, already I hear the term 4th industrial revolution though I think its currently being used in a limited context and will be used more in hindsight.

I'm listened to the first part, she says the government spends money into existence but that's not what currently happens, at least not in the US with the fed

Direct fed to government lending would be a major shift and I'm not sure why it would be needed, the demand for bonds is still strong from auction data and they seem to be able to generate all the currency they need from those; the only reason there hasn't been more stimulus is politicians arguing over the bill

The bank of England might be able to do it but GBP isn't the world reserve currency, we are just f*ing ourselves if the pound is over spent but the world runs on dollars and messing that up with direct lending seems like a step too far

Maybe it will happen who knows but for now just have to play in the system that exists 

[KDave]

46 minutes ago, Kman said:

I'm listened to the first part, she says the government spends money into existence but that's not what currently happens, at least not in the US with the fed

Direct fed to government lending would be a major shift and I'm not sure why it would be needed, the demand for bonds is still strong from auction data and they seem to be able to generate all the currency they need from those; the only reason there hasn't been more stimulus is politicians arguing over the bill

The bank of England might be able to do it but GBP isn't the world reserve currency, we are just f*ing ourselves if the pound is over spent but the world runs on dollars and messing that up with direct lending seems like a step too far

Maybe it will happen who knows but for now just have to play in the system that exists 

Yes we will have to see what happens 

[HerefordBullyun]

Cisco could be one to watch going forward. They've invested in passwordless authentication with duo. I was looking at Thier white paper for this. If they own the patent for this it's going to be big in the tech market going forward. Very interested in this and going to put on my watchlist. The only concern I have is we are in tech bubble but Cisco are well established and can easily ride the storm. Definitely worth looking at.

[KDave]

13 minutes ago, HerefordBullyun said:

Cisco could be one to watch going forward. They've invested in passwordless authentication with duo. I was looking at Thier white paper for this. If they own the patent for this it's going to be big in the tech market going forward. Very interested in this and going to put on my watchlist. The only concern I have is we are in tech bubble but Cisco are well established and can easily ride the storm. Definitely worth looking at.

Tech bubble 2.0

https://www.cnbc.com/2020/08/28/us-tech-stocks-are-now-worth-more-than-the-entire-european-stock-market.html

This time I don't think we get 90% off the big ones when it cracks though, as they are a key part of the economy now. Maybe half price. It will be like last time in that money will flow into value, such as, for example, the oil majors. 

[HerefordBullyun]

3 minutes ago, KDave said:

Tech bubble 2.0

https://www.cnbc.com/2020/08/28/us-tech-stocks-are-now-worth-more-than-the-entire-european-stock-market.html

This time I don't think we get 90% off the big ones when it cracks though, as they are a key part of the economy now. Maybe half price. It will be like last time in that money will flow into value, such as, for example, the oil majors. 

Well I'm certainly interested in buying the dip in the aftermath

[Stacktastic]

13 hours ago, HerefordBullyun said:

Well I'm certainly interested in buying the dip in the aftermath

Pintrest is my interest 😛

I wish I had got in on that earlier this year when my gut said do it. I wish I had rode the Tesla superhighway & doubled my money, but it was too risky. 

I am seriously considering Vigin Galactic - risky but the upside could be immense. 

Edited October 25, 2020 by Stacktastic

[KDave]

Hold tight chaps. I have a lot of time for Avi Gilburt, I have followed him for years because of his PM analysis. He is seeing 10-15% stock market falls coming in the short term.   

https://seekingalpha.com/instablog/876837-avi-gilburt/5512782-storm-clouds-are-forming

He also says by 2021 the market will continue its rally to new all time highs, regardless of who wins the election.

[Kman]

21 minutes ago, KDave said:

Hold tight chaps. I have a lot of time for Avi Gilburt, I have followed him for years because of his PM analysis. He is seeing 10-15% stock market falls coming in the short term.   

https://seekingalpha.com/instablog/876837-avi-gilburt/5512782-storm-clouds-are-forming

He also says by 2021 the market will continue its rally to new all time highs, regardless of who wins the election.

I've heard people say the s&p500 could be in a very large megaphone pattern and it does match up 

The top is about +4% and the bottom is -40% 

No idea if this will be prove to be of any relevance but if I throw enough ___ at the wall something will stick and I can say "ahh see, I was right" lol 

 

[HerefordBullyun]

Don't know why but I've had a gut feeling all weekend that a bubble is going to burst in the market this week. Then I watched a video by Niel McCoy ward who believes a crash is imminent now. He stated that the fed own a 3rd of the mortgages on Thier books now. That is absolutely insane...

[KDave]

Yes I am reading a lot of "crash is imminent" stuff, it could be, but when a lot of people are saying it the opposite usually happens. The people I follow get it wrong from time to time.

When a cycle turns there is a lot of turmoil in the market, some people think March was it, but we are too far into a bubble in tech stocks now its getting harder to agree with the March thesis. Tech bubble 2.0 always leads to big crash. The question for me is still will it take the rest of the market with it, or will people flee to value like last time. I think the latter is more likely given the valuations we are seeing in the hated sectors, but cheap can always get cheaper.

https://seekingalpha.com/article/4378438-stock-bubble

Stocks have been only before the 1929 and 2000 crashes more expensive than today.

[Bumble]

It's a matter of timescales. Whoever wins the US election, there will be a lot more stimulus spending and a lot of debt monetization, and some of this money will find its way into the stock market. On a shorter timescale (between now and the year end) there may be a lot of tax loss/tax gain selling. Biden might increase capital gains tax. It only needs US investors to think that he might, and they will realize any gains they currently have before the year end to lock in a lower tax rate. This would cause a fall in the next two months followed by a rise in January when the buying back starts.

[HighlandTiger]

1 hour ago, Bumble said:

It's a matter of timescales. Whoever wins the US election, there will be a lot more stimulus spending and a lot of debt monetization, and some of this money will find its way into the stock market. On a shorter timescale (between now and the year end) there may be a lot of tax loss/tax gain selling. Biden might increase capital gains tax. It only needs US investors to think that he might, and they will realize any gains they currently have before the year end to lock in a lower tax rate. This would cause a fall in the next two months followed by a rise in January when the buying back starts.

I like that scenario. Fill my boots in the next few months with some cheap stock, and then reap the benefits.

[Stacktastic]

10 hours ago, KDave said:

Yes I am reading a lot of "crash is imminent" stuff, it could be, but when a lot of people are saying it the opposite usually happens. The people I follow get it wrong from time to time

Im starting to loose a bit of faith in many of these people especially when you watch them over a period of time and they then change course and forget thier previous predictions or statements. If it was not for monetisation, affiliates & some form of ego satisfaction, you wonder if they would be there in the first place?

I do think it will crash though, might not be as abrupt, but I do feel that cvid is just the start of somehting a lot larger. Maybe civil war in the USA?? Dont know, but I just wish I had 100k to drop into the markets, crypto & mining stocks when or if it tanks..

I was looking today at the odds of Kanye winning the election. its 1000 to 1! Even £10 will reap £10k. Imagine dropping 10k into it and he wins (no chance though). 😛

Edited October 26, 2020 by Stacktastic