Jtc Share Discussion Threads

[blusteradjuster] 15/5/2018 12:39

Wouldn’t rule that out JTC.

However, if it happened in the next couple of years, it would mean that the S&P has, in just 20 years since the millennium, seen 3 of the 4 worst bear-markets in 90 years.

Perhaps says something about leverage and our fast & loose approach to the economic cycle..

[jtcod] 15/5/2018 12:25

There's the conundrum MT. As I have said before I think long term your Commodity call may well be correct but I expect disruption in the shorter term from which commodities like Copper are imo unlikely to be unaffected.Whatever happens the beauty of it is that we can both vote with our money. My portfolio is 75% cash right now fwiw because I would rather be predominantly out of the market. I want the casino to provide significantly better odds than are on offer today.Btw from the Hussman Link posted earlier he says (in the Feb 2018 article): "I expect the S&P500 to lose approximately two-thirds of its value over the completion of this market cycle"

[mount teide] 15/5/2018 12:00

'From present levels of valuation, we fully expect the S&P 500 to lose value, on a total return basis, over the coming 12-year horizon. That’s not a worst-case scenario or an outcome that depends on unusual economic outcomes. It’s actually the standard, run-of-the-mill expectation given current valuation extremes, and it assumes substantial expansion in the U.S. economy over this horizon.'


Market valuations - decisions, decisions - buy the S&P 500 or Commodities in the early stage of recovery following a brutal near decade long recession?

Following chart compares the GSCI Commodity Index(20 major commodities) v S&P500 over nearly 50 years.

[jtcod] 15/5/2018 11:53

Original link is here. Only just noticed thishTTps://www.hussmanfunds.com/comment/mc180201/

[jtcod] 15/5/2018 11:52

The next chart shows our Margin-Adjusted CAPE, in data since the 1920's, which is also easily at the most extreme level in history. Notably, the relationship between the Margin-Adjusted CAPE and actual subsequent market returns is more reliable than for the raw Shiller CAPE.hTTps://www.cmgwealth.com/wp-content/uploads/2018/02/0216.18.pnghTTps://www.cmgwealth.com/wp-content/uploads/2018/02/0216.19.pngOne last point from Hussman...On interest rates and corporate taxesThis brings us to the question of interest rates. Don't low interest rates justify rich valuations? Not so fast. Remember how discounted cash flows work. If interest rates are low because growth rates are also low, no valuation premium is "justified" by the low interest rates at all.Despite some investors waxing rhapsodic about things like "mass collaboration and sharing enabled by technology and global communications networks," S&P 500 Index revenues have grown at a nominal rate of just 3.2% annually over the past 20 years, and just 1.6% annually over the past decade, and that includes the benefit of stock buybacks. Even the steep expansion of profit margins over the past 20 years (investors forget that one of the reasons P/E ratios were high in the late-1990's was because margins were actually below-average) has produced average S&P 500 earnings growth of just 5.0% annually, and only 3.1% annually over the past decade. While these growth rates are already below historical norms, further earnings growth at a rate higher than revenue growth would require profit margins to advance without limit.

[jtcod] 15/5/2018 11:50

hTTps://www.cmgwealth.com/wp-content/uploads/2018/02/0216.16.pngTake MarketCap/GVA, put it on an inverted log scale (left) and you get the blue line below. The red line (right scale) is the average annual nominal total return of the S&P 500 over the subsequent 12-year period. The correlation between the two is 93%. From present levels of valuation, we fully expect the S&P 500 to lose value, on a total return basis, over the coming 12-year horizon. That's not a worst-case scenario or an outcome that depends on unusual economic outcomes. It's actually the standard, run-of-the-mill expectation given current valuation extremes, and it assumes substantial expansion in the U.S. economy over this horizon.hTTps://www.cmgwealth.com/wp-content/uploads/2018/02/0216.17.png

[jtcod] 15/5/2018 11:49

John Hussman is new to me also:Hussman 12-Year Forward ReturnsFrom John Hussman's February 2018 post:Here is how you read the chart:Last week, the U.S. equity market climbed to the steepest valuation level in history, based on the valuation measures most highly correlated with actual subsequent S&P 500 10-12 year total returns, across a century of market cycles. These measures include the S&P 500 price/revenue ratio, the Margin-Adjusted CAPE (our more reliable variant of Robert Shiller's cyclically-adjusted P/E), and MarketCap/GVA – the ratio of nonfinancial market capitalization to corporate gross value-added, including estimated foreign revenues – which is easily the most reliable valuation measure we've ever created or tested, among scores of alternatives.A few charts will bring the valuation picture up-to-date. The first chart below shows the ratio of MarketCap/GVA, which now stands beyond even the 2000 market extreme.

[jtcod] 15/5/2018 11:21

Here’s something from the October 2017 Artemis research that I have not come across before:



Chart 9: The Buffett Indicator — Corporate Equities to GDP

This indicator takes the value of corporate equities from the Fed’s Quarterly Z.1 Balance Sheet and compares it to U.S. Gross Domestic Product.

Think of the U.S. as one big business and it produces a number. In this case, GDP is used.
If your business produced $1 million and the value of all your outstanding shares times your current stock price was $2.38 million, the value of your business would be worth 138% more than what you produced.
Think of it just as a base line measure.
You can then compare that base line measure to points in time (history) and see just how richly priced you are relative to history.
If I’m going to buy your stock, am I paying a lot or getting a good deal? Of course, that depends on your ability to grow your sales; I can estimate that…but I want to see how much I’m paying for your shares relative to your business growth over time.
So think of all the stocks in the U.S. compared to where they have been historically. Since 1990, GDP has averaged around 3%. I suspect over time, as it has in the past, it will fluctuate between 2% and 4% with a few select periods above and below those numbers. See chart on GDP since 1990 here.
Bottom line: The “Buffett Indicator” is at the second highest level since 1950. We are not getting a lot for our money (i.e., investment). Also note the opportunities that presented in 2002 and 2008.

[jtcod] 15/5/2018 11:08

Only time will tell MT but I think given the relatively low volatility of the last 6 years against the relatively high growth in debt over the same period, their strategy may have a reasonable chance of success over the duration of say the next 36months. Especially as PE10 is currently coming off its 2nd highest peak in the last 140yrs.I follow with interest.This was from their now outdated October research which I was sent yesterday by someone but although the markets have advanced since then I haven't seen any update since that date. hTTps://www.cmgwealth.com/wp-content/uploads/2018/02/0216.07.png

[jtcod] 15/5/2018 08:36

It's an interesting strategy of Artemis leading fund. Essentially they extrapolated much of the historical market indicators as any serious investor does but then they have focussed their main fund on a big-bet strategy of increased volatility. I understand really started to pay dividends from Feb 2018 onwards.hTTps://www.theguardian.com/business/2018/feb/09/how-artemis-hit-bulls-eye-by-betting-on-stock-market-collapseFor those into historical data:hTTps://static1.squarespace.com/static/5581f17ee4b01f59c2b1513a/t/59ea16f7e5dd5b23063a3154/1508513533577/Artemis_Volatility+and+the+Alchemy+of+Risk_2017.pdf

[mount teide] 14/5/2018 23:58

Baltic Dry Index now up 55.3% to date in Q2/2018. - driven primarily by very strong demand/rising prices for Capesize dry bulk commodity carriers.


According to Goldman Sachs, global oil demand growth in the first quarter of 2018 is likely to have been the strongest growth since the fourth quarter of 2010 - and its being driven largely by rocketing Chinese demand.

The Most Underappreciated Story In The Oil Market - China’s ever-growing oil demand.

[mount teide] 14/5/2018 10:10

The depths to which the hugely embittered, self serving Civil Service has gone to mislead the UK electorate and our mostly clueless politicians over Brexit and the EU Customs Union and Single Market is nothing short of a National Scandal.

The bureaucrat class in the EU and its Nation States actually believe they run the EU and its Nation States NOT the elected politicians and their Parliaments, that the EU bureaucrats have reduced to mere Parish Council talking shops - which in the case of Italy and Greece, saw the EU bureaucrats replace elected 'Governments' with unelected technocrats for failing to follow EU dictats with sufficient zeal!

Never mind the fact that Germany is one of the worst offenders of failing to follow EU rules and regulations and yet, the EU Bureaucrats continue to turn a blind eye - presumably because 3 of the top four EU bureaucrat positions are held by Germans!

The Civil Service's recently released: 'Cross-Whitehall Brexit Analysis’ - is either the work of total incompetents or, like their completely discredited 'project fear' brexit vote economic impact report - another disgraceful attempt to misled the electorate. Either way the authors of the reports should ALL be dismissed immediately.

[mount teide] 13/5/2018 00:03

Top Global Container Ports

In 2017 China and SE Asia continued to build still further on their huge domination of the Ports that specialise in handling mostly finished goods in freight containers.

Seven of the top 10 global ports are now in China; two are in SE Asia (Singapore and Busan), with just Dubai as the only entry outside Asia. Europe's top port Rotterdam is 11th and top US port Los Angeles a lowly 17th.

Six of the next 10 largest global container ports are also in China and SE Asia, 3 are in Europe and 1 in the USA.

Shanghai, China the world's busiest container port now handles over 40million TEU freight containers a year and the top 7 Chinese ports combined handled 165million TEU in 2017.

To put this in some perspective, the Port of Shanghai on its own now handles more freight containers annually, than:
* The top 10 US Container Ports and top UK Container port(Felixstowe) COMBINED
* More than the top 7 European Ports COMBINED
* More than 6 TIMES the top 3 UK Ports COMBINED
Shanghai is currently growing at the rate of the UK's largest container port Felixstowe's entire annual throughput a year!(The container port quay at Felixstowe is 3 miles long).

And the clueless remainers and our fanatical pro EU Whitehall/Treasury want to continue shackling us to the Customs Union - staying in the customs union after Brexit means charging EU tariffs with no say in setting them – the “vassal state” argument - effectively the EU is trying to keep us and our money in.

Customs union membership also means accepting EU regulations, de facto single market membership. That makes it doubly impossible for Britain to cut trade deals with other nations, one of the main Brexit benefits. Clueless remainers say the customs union is an elegant compromise, but it’s the worst of both worlds and makes a mockery of the June 2016 vote to take back control of our laws, borders and money.

The EU’s trade agreements are highly unimpressive in range - after 60 years of trying, the EU has no free trade agreements with major players like the US and China. EU deals currently in force cover under 10pc of the global economy and are generally skewed towards French and German, not British, interests. Sizeable economies with EU deals – like South Korea and Mexico – now want bespoke bi-lateral UK agreements.

When Britain joined the EU bloc in the 1970's, it comprised over 30% of the global economy. As global commerce has increasingly shifted east, that share will fall to under 14% once Britain leaves. It makes no sense for a competitive economy like Britain to hide behind a tariff wall harming our consumers and discriminating against 86% of the world economy that continues to grow at multiples of the EU.

[jtcod] 11/5/2018 08:03

China’s bike-sharing bubble

[jtcod] 10/5/2018 10:09

America dominates the thriving global weapons tradehTTp://www.bbc.co.uk/news/business-43873518Rather puts a perspective on Mr Trumps view of world politics

[jtcod] 10/5/2018 07:54

Or should that be :-(

[jtcod] 10/5/2018 07:52

Have been looking at data on different country's GDP dynamic during WW2. It showed among other things, not unsurprisingly I guess, that those countries which trade arms tend to see a noticeable acceleration of GDP during war time despite the obvious hindrance to traditional trade relationships. Obviously those that do not see their GDP fall markedly. I was trying to get a picture on the economic potential to dwarf high debt levels with accelerated gdp in the rebuilding after war to that of the demands of high debt to gdp in peacetime Anyway, I came across this data for military spending which i found quite fascinating. Particularly so the chart on UK defence spending as a % of GDP going back to 1692. It seems that over more than 300 yrs the UK has had a default 2% defence spend between wars and it seems we have never spent less on defence in terms of GDP than we do today. (Although the data finishes in 2014.)Given that defence spending is in a 300yr record bear market slump, perhaps I should be investing in defence? :-)hTTps://ourworldindata.org/military-spending

[mount teide] 09/5/2018 20:52

Baltic Dry Index up 51% in month to 1,465 as a result of strong demand/rising prices for Capesize Dry Bulk Commodity carriers.

The BDI hit an all-time high of 11,793 in May 2008 at the peak of the last commodity/shipping cycle. The lowest level ever reached was in February 2016, when the index dropped to just 290 at the cyclical low of the last commodity/shipping cycle.

China imported 442,000 metric tons of unwrought copper in April 2018. Although the imports are similar those in March, they are up more than 47.0% y/o/y. In the first four months of 2018, China’s unwrought copper imports have risen 15.7% compared to the corresponding period in 2017.

China’s copper concentrate imports have also been strong in 2018. In April, the country imported 1.6 million metric tons of copper ore and concentrates, which is 13.9% higher than in April 2017. On a year-to-date basis, China’s copper concentrate imports have risen 9.7%, compared to the corresponding period last year.

Source: PRC Customs Dept

Cynical, long in the tooth market watchers might suggest its no coincidence that China's all-time copper monthly import record occurred in Q1/2016 when Copper, Zinc, Lead and the BDI all hit 10 year lows - and that the Chinese have again been buying very heavily recently, following a 'softening' in industrial metal pricing over the last few months generated principally by what some consider to have been manipulation of Chinese and LME stock inventory data.

AIMHO/DYOR

[englishlongbow] 09/5/2018 12:05

9 May 2018
Amerisur Resources Plc ("Amerisur" or the "Company") (AMER)
Operations Update

Amerisur Resources Plc, the oil and gas producer and explorer focused on South America, is pleased to provide an update on operations in Colombia.

Platanillo N Sand Drilling

The Company is pleased to report good progress on the civil works, a 3.8km new road and a location with three drilling cellars. This progress has been made in spite of adverse weather conditions and the discovery of unconsolidated zones on the route which required additional works to stabilise. The construction is expected to be completed in June, after which Rig D10 will be mobilised to drill Pintadillo-1, the first of up to three wells targeting the N Sand anomaly, which has been identified on 3D seismic. Pintadillo-1 will be a slightly deviated well, with a planned total measured depth of 8,448ft, and is expected to take less than a month to drill and log.

The N Sand anomaly at Pintadillo is one of four such anomalies identified by the Company in the central part of the Platanillo block. It is estimated to hold P50 resources of 11.44 mmbo.

Put-8 Drilling

Amerisur has been informed by the Operator of block Put-8, Vetra Exploration and Production (50%), that the drilling contractor has been slightly delayed in the completion of their previous contract and the spudding of Miraparriba-1 is now planned to begin in June 2018. Miraparriba-1 will be drilled as a directional well to the Miraparriba structure within the Put-8 block.

The Miraparriba structure is a low risk U and T sand light oil structural target covered by 3D seismic with gross P50 recoverable resources estimated at 4.4 mmbo by the Operator.

Put-8 is a 102,799 acre block which lies adjacent to the west of the Platanillo field.

CPO-5

The Operator (ONGC Videsh Ltd, 70%) has informed the Company that the preparations for the spudding of the well Indico-1 continue to advance despite adverse weather conditions in the area. The rig is now expected to mobilise in the latter part of June 2018. Mariposa-1 continues to produce in a stable manner and the operation to perforate additional zones in the well is expected to be performed within the next month.

Indico-1 is targeting the same play as the successful Mariposa-1 well, but is further up dip in a larger structure. The Operator estimates a gross P50 recoverable resource at Indico-1 of 10.3 mmbo.

CPO-5 is located to the south of the prolific Llanos 34 block and to the east of the Corcel fields. The block includes the producing Mariposa-1 well and the evaluation area related to the Loto-1 oil discovery.

John Wardle, CEO of Amerisur said:

"We are gearing up for a busy period of exploration drilling, targeting 26 mmbo of gross resource over the first three wells."

[jtcod] 08/5/2018 16:43

Argentina's Shock and Awe Seems to Pay OffhTTps://www.ft.com/content/ea4728b8-5229-11e8-b3ee-41e0209208ec

[jtcod] 08/5/2018 12:28

Must say I am surprised the board of Virgin Money haven't turned down the CYBG bid out of hand. The fact that they are actually bothering to engage with the suitor on a seemingly low-ball offer makes me wonder if it is not saying something about their book.

[mount teide] 08/5/2018 10:48

Theresa May has asked the UK Space Agency to lead a taskforce of engineering and aerospace experts to develop options for the UK’s own Global Navigational System, with the capability to guide missiles and plan operations, after being told by the EU that post Brexit as a third country, we could no longer be trusted to have access to the EU's Galilao GPS System, despite funding 12% of the cost of it.

The unelected Brussels Commission on hearing Theresa May's instructions to the UK Space Agency immediately slammed Britain's plans to develop its own Global Navigational Satellite System as “completely pointless”!

It really does show how Juvenile, petty and vindictive the self serving EU bureaucrats have become.

Everything we do in the Brexit 'negotiations', everything we suggest, these hugely embittered venal charlatans say no to and dismiss out of hand.

The EU says post Brexit we cannot be trusted to use the Galilao GPS System - so we look into our own system, and the EU then says, "we should all be working together".

Priceless.

[the stigologist] 08/5/2018 08:42

FARN today follows IMM with a major Phase III failure.

When will investors realise that in a gold rush it's better to buy the providers of picks and shovels?

In the biotech/Pharma world that should mean favouring the likes of PYC