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Messages - Bevan

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1
Shares / Re: Gold stocks
« on: August 14, 2019, 07:36:48 pm »
It's also interesting how many started trying to say that crypto markets were a great inverse correlation to equities etc. That they would perform just as well as gold due to their rarity value, which is what Satoshi originally tried to design into BTC. However, everyone knows that fear and greed (and when joined together, FOMO) have been largely responsible for crypto price moves.

So that supposedly inverse correlation is busy breaking down fast i.e. when all markets crash, investors tend to get margin calls. This results in often selling other positions to cover the calls. However, no-one sells their physical gold to cover a margin call. Rather sell this stupid thing called a Bitcoin, which doesn't seem to have any utility value anyway. If you try to buy a pizza with it, the transaction fees would probably be worth more than the pizza anyway.  :D  (Yes, I know you can't buy a pizza with gold either, although you probably could, but that's not what gold is there for. It's there to keep just ahead of inflation.)

2
Shares / Re: Gold stocks
« on: August 14, 2019, 07:29:38 pm »
I don't see gold popping yet but it's coming... The dream scenario for SA gold stockholders is a gold spike, together with another economic collapse / emerging market risk-off sentiment i.e. weaker Rand. I reckon inside of the next 1-3 years.... Interestingly, I reckon SA will recover quicker and faster than most developed nations, who will go into a Japanese style deflation scenario for a long time...

In case no-one has noticed, this dream scenario is busy unfolding for SA gold.... Stock markets look likely to head even further south from here on and whilst they will bounce back, 2019 looks like being another negative or flat year for equity markets. Interestingly, it's almost impossible to buy Kruger Rands at the moment. Apparently, as soon as the Mint opens every day, the available quota for the day is snapped up within minutes....

Whilst I don't think we will see a 1930's depression unfold, at least not yet because the US Dollar still seems to be currency to flee to in a crisis. Of course this is totally nuts as the US is indebted more than any other nation in the history of this planet. This penny has dropped to most of the ultra high net worths already and finally the large funds are starting to realise it. However, everyone is like the proverbial deer caught in the headlights. There is nowhere to turn to preserve value, never mind make a return. Gold, whether you love it or hate it, is becoming the only investable market. In localised markets property, diesel and bread (in fact most food and water) will hold their value too.

3
Shares / Re: Readjusting portfolio.
« on: June 26, 2019, 04:26:46 pm »
I've just managed to sell a property after it being a long time on the market and in light of the comments above where would you invest a large lump sum today as I have no intention of buying another property?

Bizarrely, productive agricultural land with water on site is an excellent investment longer term. Ask Dr. Michael Burry...
https://www.savingthegrace.com/blog/2018/7/25/why-michael-burry-of-the-big-short-is-investing-in-water-put-your-money-where-the-water-is

Unfortunately many risk-off markets have run already e.g. crypto-currencies, precious metals etc. Stock markets are very top-heavy. Bonds are in favour but only because everything else sucks. Private equity can probably offer decent returns. You might want to look at investing via Uprise.Africa or lending on RainFin. They are a little more risky but offering decent returns.

Collectibles are also offering decent returns. Classic cars, rare gold coins e.g. St. Gauden.... Read Simon's article on Sovereign Man...
https://www.sovereignman.com/international-diversification-strategies/the-most-interesting-way-to-buy-gold-today-23490/

4
Shares / Re: Gold stocks
« on: June 26, 2019, 04:19:25 pm »
Problem as always is the inverse correlation between gold and ZAR. Central banks are indeed buying gold en-mass now, as they spurn US Treasuries. The bond markets are signalling their fear of US debt levels and gold is benefitting from these concerns, as well as general US - Iran tensions, ongoing trade wars etc. Stock markets are very, very top heavy as companies have used all that lovely QE that has found its way to them, to buy back their own stocks. This has kept stock markets absurdly high even as the aging generation (who generally outnumber the young in developed economies) pulls their money from stocks into safer assets, like gold.

I don't see gold popping yet but it's coming... The dream scenario for SA gold stockholders is a gold spike, together with another economic collapse / emerging market risk-off sentiment i.e. weaker Rand. I reckon inside of the next 1-3 years.... Interestingly, I reckon SA will recover quicker and faster than most developed nations, who will go into a Japanese style deflation scenario for a long time...

5
Shares / Re: Readjusting portfolio.
« on: June 09, 2019, 08:48:39 pm »
...
Seems like a flat market has become the new normal over the years and no reversal is even expected in the near future.

I think flat would be nice. The concern is that we see a major correction. The Shiller CAPE ratio has only ever been higher two times before, once before the 1930's crash and the other during the irrational exuberance just before the dot.com crash. See https://www.multpl.com/shiller-pe - did anyone say Netflix, UBER etc.... Definitely heard that language before i.e. we operate on negative margins but we make up for it with eyeballs / volumes.... yeah right....

Some are talking 1930's depression again. I realise I've held a contrarian bearish "anti-investor" approach for some time, preferring to trade the swings and re-invest my profits. This means I often get to ride the same price moves up and down, two or three times. I'm completely price agnostic at all times.

My view is that governments and banks got bailed out in 2007/2008. Then more money than the world has ever known got printed. Where did it go? To the super wealthy of course, initially via the FED and the bond market, taking US debt to over $22-trn now. Note how the Chinese, Japanese and other traditionally large US treasury buyers have stopped buying and are turning to gold instead.... But for central banks their gold holdings are simply a nice way to earn annuity returns i.e. playing gold loans vs. interest rate swaps.

The super wealthy, clever money has also definitely been leaving the market of late, along with those baby-boomer pension funds, now all retiring. But you can't see them. Why? Because all those bucketloads of money have ultimately also found their way to companies, and those companies cannot find any value in the market, just like Warren Buffet sitting on oodles of cash reserves. So what do they do to appease their stockholders? They've been buying their own stocks back, keeping prices afloat. Of course the largely uninformed middle classes have also been buying stocks like there's no tomorrow. Because of course stocks always keep going up.... right? So whilst banks and governments got taken out in 2007/2008 we now need to see ordinary stockholders and companies get taken out, to restore the balance a little and help wipe out that massive excess of printed money.

I doubt the US will default as they will simply go after people's pensions first i.e. take away social security (it goes bust circa 2030 anyway) and replace it with a basic income grant instead. Either way, we are heading for interesting times. The top 1% will of course do just fine. Warren Buffett also has his put options and others have largely diversified into gold, properties, farms with water, rare collectibles etc.

Having said all that, the Dow has had a nice retracement on May's drop and looks like it could run further still to 27,000. Then however things should get very interesting. Will there be enough steam and momentum to push it higher or will we start to see the cracks? We haven't had a decent market correction for over 10 years now. This next one could be dramatic because I don't see anyone prepared to step in and save markets this time...

6
Off topic / Re: Live chat
« on: June 07, 2019, 10:21:22 am »
...until we revert to concurrent weakening again (to ride big swells), probably later in week....

We are in strong concurrent weakening on the Rand, now targeting 16 to USD by end June. However, for now we are quite overbought (i.e. USD) and Rand pushing outside the elastic bands (Bollingers), thus expect a little contraction and sideways, choppy price action. Especially as momentum (the wind) starts moving against signal and trend (the current). This will form the typical bull flag pattern, whilst momentum catches its breath. Following the bull flag, I expect further weakening to the expected 16 level.

7
Off topic / Re: Live chat
« on: June 03, 2019, 09:34:10 am »
ZAR is crosscurrent i.e. short term strength against medium term weakening. Expect choppy, sideways action (wind blowing against current in ocean) until we revert to concurrent weakening again (to ride big swells), probably later in week. Fundamentally, emerging markets to weaken against bleak global risk-off sentiment.

8
Off topic / Re: Life cover, income protection and such...
« on: May 20, 2019, 12:53:30 pm »
I don't do insurance. I prefer to do life. Hell, I don't even do medical aid. Instead, I eat healthy, organic food from the garden and our own animals. I cut down trees and carry logs and build stone cottages, which is way better than gym and keeps me in tip-top condition. I reckon I've pushed back any heart-attack etc. by many years now. Our place makes money from accommodation, selling food and other products, courses and compost making etc. I may have most of my eggs in one basket but I really like the basket and wouldn't want it any other way.

Insurance is pure grudge. If you're the sole breadwinner and your family has nothing else to fall back on then yes, you need it. Find the balance between being responsible and the least cost options, and invest whatever savings you can make instead.

9
Off topic / Re: Live chat
« on: May 19, 2019, 04:42:51 pm »
BTC on the Investor Challenge is also quoted in ZAR and the Runt looks like it's in weakening mode again. Expect 15 or even higher to USD fairly soon now. So weaker Runt and lower BTC means best to hold in the investor comp i.e. avoid paying taxes on profits.

10
Off topic / Re: Live chat
« on: May 19, 2019, 04:37:56 pm »
ETH and BTC both clearly very overbought and over-extended now. But weekly and daily momentum are still positive so no reason to sell. Just bring stop losses in quite close. This week could see some fast, gappy corrections so perhaps set guaranteed stops around 5% lower. If stopped out you probably want to look for an opportunity to re-enter on the long side, but we could see up to a 20% correction, so watch daily and 30-min momentum for timing.

11
Off topic / Re: Live chat
« on: May 19, 2019, 04:30:55 pm »
ETH definitely the better choice from a utility perspective. Ripple even better if you believe that financial insto's are going to support any of them. But then again, if they do, they would rather build their own. So I don't think we've seen the killer app in blockchain emerge yet. Meanwhile, BTC will be what the crowd (read "dumb money") follows and buys into. It has the lowest utility but highest FOMO and Fear and Greed factors, so expect it to also have the highest vol going forward. The days of puberty and HODL are past now, and crypto has become a trader's dream. Most of the black boxes are clearly MACD / momentum driven in their algo designs so it's easy to sell high and buy low on momentum, not price. Wish there was someone bold enough to offer long dated options but most of the CFD providers (IG etc) are too scared because vol levels are so high.

12
Shares / Re: Masterclass in Trading & Investing
« on: May 15, 2019, 05:52:16 pm »
Having spoken with JHB business school, there is some interest to offer this course in modular format, but of course attendees then miss out on the whole Rand Club experience and the good food, whilst paying a higher price. I still have around 3 spaces left if anyone is interested to round out their trading and investing knowledge and/or look at a career in trading / commodities etc.

13
Off topic / Re: Live chat
« on: May 14, 2019, 08:57:10 pm »
Hey Musa, I didn't realise there were herbs on the moon. Just goes to show you, you learn something new every day.  :))  Seriously though, does anyone really fall for this crap?

14
Shares / Masterclass in Trading & Investing
« on: May 02, 2019, 09:38:01 pm »
Hi there,

I have recently launched African Source Markets, which is an online physical trading platform for African commodities. We support the development of Africa’s resources and agri industries via online tools that encourage liquidity and assist market participants to effectively manage their commodity risk.

But this post is about a Trading & Investing Masterclass that I am hosting at the Rand Club on 30-31 May 2019. It's not about how to make a fortune trading, but rather it offers deeper insight into all global markets (stocks, currencies, commodities and crypto) as well as derivatives and trading psychology. A lot of lessons learned from half-a-lifetime of trading markets, which should help you obtain a new perspective and perhaps some insights into a trading career yourself, or help hone your trading and investing skills further.

The price of R2,800 for the two days includes all tuition, instruction materials, lunches and refreshments at the Club, although if you order a bottle of 2005 Château Pétrus I might have to reconsider.

It would be great to put some faces to some of the names on this site. You can find more information at www.sourcemarkets.co.za under 'Training'. Even if you can't attend this time I've no doubt there will be other occasions in the future. African Source Markets is going to be a good news story for the SA resources and agricultural industries.

All the best,
Bevan

15
Shares / Re: Offshore Structured Product
« on: April 13, 2019, 10:43:54 pm »
New FTSE 100 Structure:

Your return numbers are misleading. Working for a regulated brokerage you really should be more careful.

You're offering an option structure based on the current strike price of the FTSE. It returns 18% per annum in simple interest, not 54% or 72%. That's just you adding up all those 18% returns.... i.e. if I invest R100 in this structure then after 3 years I assume I get my R100 back plus R18*3 = R154. Compound interest would have given me R164 back. Nevertheless, 18% per annum is still pretty good.

Of course if markets do better than 18% return per annum then the option writer gets to keep that upside. Not so? Also, what happens if for some reason the FTSE is 40% lower? Then I presume the option is worthless and one loses their premium i.e. their initial R100...?

I imagine this would appeal to an investor who thinks markets are neither going to shoot the lights out, or fall too much. I reckon there's a decent crowd out there who might fall into that mindset. Either way, must be a nice book for your option traders to manage. Short vol, negative gamma trading is always exciting.   8)

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