[Fultonius]

Nah, but my S&S ISA is a euro denominated fund, so if I sell any shares just now it's taking a hit. Kind of assumed there was a low risk of GBP getting stronger (brexit basket case), so wasn't too worried about the currency risk - always learning!

I've actually started noting down my decisions when I make them, so that when I'm thinking back I can remind myself of why I think things are a good decision at the time. (Easy to reimagine the past...)

[Snoops]

Can anyone point me in the direction of some reading around bonds/bond yields and their effect on economy and/or market please?
I have done plenty of research over the last couple of years but can’t get my head around them....

Example now...bond yields spiking...causing bond self off...causing strengthening dollar....and part of the reason stocks sliding.....(from Bloomberg)

I just don’t understand bonds, bond yields and where they fit in to the wider market

[Fultonius]

Nah, but my S&S ISA is a euro denominated fund, so if I sell any shares just now it's taking a hit. Kind of assumed there was a low risk of GBP getting stronger (brexit basket case), so wasn't too worried about the currency risk - always learning!

I've actually started noting down my decisions when I make them, so that when I'm thinking back I can remind myself of why I think things are a good decision at the time. (Easy to reimagine the past...)

Reflecting on this - I'm probably just reading the opinions I want to hear....   Most of the indicators are still saying buy GBP.

On Gold Pete - your man Northstar was saying interesting things:  https://twitter.com/NorthstarCharts/status/1365083827660599302?s=20 

[petejh]

Can anyone point me in the direction of some reading around bonds/bond yields and their effect on economy and/or market please?
I have done plenty of research over the last couple of years but can’t get my head around them....

Example now...bond yields spiking...causing bond self off...causing strengthening dollar....and part of the reason stocks sliding.....(from Bloomberg)

I just don’t understand bonds, bond yields and where they fit in to the wider market

Long-term (10yr) bond yields are the benchmark for 'zero risk' return.
Equities are valued at a premium relative to the zero risk return of long term bonds. This is due to the time value of money - why invest for ten years in something risky, which may or may not give your an x% return, when a zero risk option gives you a return of x-minus the difference between equity risk premium and long-term bond yield.

High bond yields affect growth stocks the most. Growth stocks are often tech companies with no profits but future potential, like Tesla etc. They are given a valuation based on profits estimated a long time out in the future. Hence the time value of money impacts these stocks the most as a billion dollars of profit 15 years from now isn't worth a billion dollars in value today, due to inflation and also due to the opportunity cost of not investing in a 10-year bond that could have given you a safe 1.6% or higher (likely to go higher).

The big problem in the US being that future earnings potential for risky tech stocks has been getting stretched further and further into the future, by risk investors looking for a return in a low interest rates environment. It's a bubble and its bursting now. The time value of money is hitting home.


One other thing about bond yields is they might not be bad for all stocks as they also predict strong growth in the economy.

Value stocks are less affected than growth stocks. Value stocks are companies undervalued by the market based on fundamentals such as actually having strong earnings today or in the near future, profitable or about to turn profitable in the very near future, or valuable product about to hit the market - not in 10 years but in 6-12 months. These are the companies to look for in a correction. They're often undervalued simply due to being out of fashion (sentiment), or previous poor performance but have turned around since.

[Monolith]

Benjamin Graham is your friend although it is said to be getting harder to unearth true value propositions any more; technological advancements are a double edged sword in that respect with information being much more freely available than ever before. NAV is your best friend

[petejh]

On Gold Pete - your man Northstar was saying interesting things:  https://twitter.com/NorthstarCharts/status/1365083827660599302?s=20

Yep looking forward to hear his thoughts. TA long-term suggesting gold in a bullish descending wedge but I'm not betting anything on it either way!  There are good reasons for gold companies forecasting their next 3 years at an average gold price of $1,300 -1400.

[AJM]

Example now...bond yields spiking...causing bond self off...

Just on this bit - bond yields and bond prices are effectively two ways of describing the same thing. The bond yield is the rate of return you would get if you bought the bond at the current market price and then received the payments over time.

So bond yields and bond prices are tied in an inverse relationship.

If bonds are being sold off, then supply/demand suggests prices go down, and another way of saying that is that yields go up. Or, if you believe that yields are going to go up, then your view of the right price would go down, and therefore you ought to sell before the price does fall.

[petejh]

Correction ongoing in the US following fed’s announcement. The s&p 500 is only just above the 3750 level.. below that things accelerate downwards. UK market catching the cold too.
Could be great buying opportunities  over the coming weeks and months as panic spreads.

[Fultonius]

Hmmm.... been sitting on selling shares to see what happened with the UK budget. Oh well, might need to ride this out!

[petejh]

BTC could be providing a good buying opportunity soon.. I'm still hoping for under 40k to buy in. I trade ARB shares not btc itself, less faff.

Most of my pf down on the week and the month, but I'm happy to have taken out a load of profits earlier in the year and it's waiting on the sidelines for the drop. Thing may get ugly in the short term as the froth gets removed from US tech stocks and everything else gets a shakedown.

[JohnM]

Yep,the portfolio I put together of US stocks is down from +20% earlier this year to -6%. I am not going to sell anything though as I am happy to hold on for a few years and I don't think I bought anything outrageously over priced although a rising tide and all that with things like Tesla getting pumped etc.

I have been beefing up my Crypto portfolio in the meantime. I am fully aware this is fully speculative but I am trying to balance it out so hopefully I back a couple of the right horses which may pay for losses elsewhere. I have missed most of the big Crypto runs so far and even if I don't get one this time (in the next 3-5 years) I don't want to regret not trying. My main annoyance/concern is the amount of exchanges I have had to sign up for to access the coins I want and their respective fees/security. My portfolio is so far balanced like this:

Bitcoin - 25%
Ether - 25%
XRP - 10%
XLM - 10%
ADA - 10%
MIOTA - 7%
DOT - 7%
XDC - 6%

That ratios are approx. as I am buying at different times depending on price. e.g. last weekend was good to buy ETH as it dropped to £940 which is low relative to recent prices and last night or the night before I stocked up on ADA as it dropped to $1.04. I haven't bought into BTC for ages as I can't help but feel it is over priced. The last order I had setup was to buy in was at £20k but that would be an unbelievable bargain compared to prices these days! I have not decided when to buy in again but I will try not to get tempted until it goes south of £30k. I made good returns this year trading XLM and XRP but they seem to have a much higher resistance level now. I am not buying in again unless they go down to £0.2 and £0.24 respectively. I am looking to just buy and hold for a few years now rather than try and trade the swings between £0.2 and £0.4. Anyway, it will be interesting to see how it goes. Going to put in an amount (say 10% of all investments) that I can afford to lose without being impoverished and strap myself in for the ride for the next few years!

[petejh]

Piece in the telegraph on ethical investing: ‘can I be a socialist and profit from the stock market?’

https://www.telegraph.co.uk/money/money-makeover/money-makeover-can-socialist-still-profit-stock-markets/

(paywalled)

[petejh]

Government R&D competition funding for EV innovations:
https://www.gov.uk/government/news/20-million-fund-fuels-search-for-electric-vehicle-innovations

And,
''The Faraday Institution, the UK's independent institute for electrochemical energy storage research and skills development, estimates that Britain will need one gigafactory by 2022, two gigafactories by 2025 and eight gigafactories by 2040 to meet demand for electric vehicles and batteries.''
New Tesla gigafactory planned for Somerset? https://uk.motor1.com/news/492760/gigafactory-uk-appears-to-be-in-works/amp/

[seankenny]

I know this thread is all dips and rips, spills and thrills, but this seemed interesting.

https://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2021/03/a-defence-of-maths-in-economics.html

Despite the title, it's kind of finance-orientated. Proviso: I don't agree with some of the points, and I haven't worked through the maths.

[Fultonius]

I've done the "sensible" thing, and pulled out some cash from a volatile (but quite decently performing until the last month) fund, and paid of some mortgage.

It's madness just now, that paying of a chunk of mortgage makes such a piddling difference to how much interest I'll pay back  when our 2yr fixed is 1.44%....

Aaanyway, at least that's guaranteed.

Back to the "investing" theme. I think Pete mentioned previously about chalking up any losses to experience, and learning from how you react etc.

In July I opened my first Stocks & Share ISA, and put in some spare money to my aforementioned sustainable development fund. At the time the NAV was £48.

In November I had noticed my savings account filling (not bragging, I know how shit lockdown must have been for some, but I've been on the busy side with work and not really spent any money on my usual passions - travel & food!) and thought "hmm, maybe I should put in some more". It had been up to about £53 in Late October, but then dipped a bit again (can't say I was paying a lot of attention). I dithered, forgot about it for a few weeks and then suddenly remembered. Transferred the funds and watched it grow  NAV was £56

Then, around early to mid Jan I posted something about starting to think I was maybe over-committed given the sheer amount of money printing going on, I can't see how it can be sustainable. Anyway....again....I dithered. It peaked at £61.5 in Jan. Held off, watched, dithered. Finally bit the bullet earlier this week, sold 50%......at......wait for it........£56.....

Ha!  Zero sum game for the second round. (well, when you count fees etc., marginal loss)

Actually, I sold slightly more than 50% and left in my initial amount.  If you count the whole capital the ROI was 7%, but if you cut out the zero sum game since December...the initial was 16% which isn't bad for 6 months. Put it another way...it's about 30% of the amount I've saved in interest overpaying my mortgage....over 15 years!!!




Dithering cost me about 18%.... (that said, it was never meant to be a short term plan). 

Learning learning.

[petejh]

I've been interested in the investment potential of green hydrogen for a while but haven't yet pulled the trigger on any company. CERES Power Holdings have a nice 12 month chart, up many hundreds of percent, but I haven't researched them enough to know if there's still value there.

Here's a link to Hannam & Partners, I've been reading their 15-page research note on the investment potential and future applications for 'green' hydrogen. It's free to download once registered, registration takes a couple of days to process but once done you'll be able to access research notes on various sectors and companies.
https://www.hannam.partners/disclaimer/


''Market Trends Raise Questions on How Investors Should Play the Market
There has been significant investor interest in supporting hydrogen development, with public market equity investment activity seeing inflows of approximately $4 billion (raised in 2021 YTD) compared to $2.7 billion (raised in all of 2020), and shares in fuel cell companies up over 300% in the last twelve months. This is not to say current publicly-listed companies are not and will not develop successful positions in the market; however, they represent only a small
portion of the opportunity investors should be evaluating.

So, Where Will Green Hydrogen Grow Now, Later, or Never?
We believe green hydrogen (and its value chain) will be attractive for investment when used as a reactant to perform some type of chemistry – not simply as an energy carrier. We believe replacing steam methane reforming with green hydrogen and ammonia production from green hydrogen are both ripe for growth NOW. Decarbonizing steel, transportation fuel and methanol with green hydrogen will be viable within 10 YEARS or more. Glass making and residential heating will likely NEVER be viable. There are expected to be additional niche applications for green hydrogen in distributed storage and transportation over the coming decades.''

[Ally Smith]

One of the biggest issues with a H2 distribution network for transport is ensuring purity; this is particularly challenging for fuel-cell applications which require >99.9% pure hydrogen.

Using hydrogen in an internal combustion engine is an alternative favoured by some vehicle OEMs as it you can cope with much lower purity, but then the combustion process yield NOx when burnt in air.

The uptake of a hydrogen based economy has many challenges ahead, and in the meantime decarbonisation via other routes will be favoured; for example bio-LNG, though here there are significant challenges for methane slip.

A 10-year outlook for green-H2 adoption seems like a sensible time-frame, and in the meantime any spare H2 will be used in refineries to reduce the CO2 footprint of high-octane gasoline...

[petejh]

Interesting thanks.

One company I'm looking at is Province Resources, a Swedish company with a green hydrogen project in western Australia. I'd previously invested in them due to their exposure to gold exploration in the Paterson region of WA, but in the short term they fell flat with their exploration target. They recently acquired a green hydrogen project in Western Australia and their share price subsequently saw a large increase, after I'd sold unfortunately.. It's a hot sector, like most of the green energy/EV sectors. Just need to sort the wheat from the chaff.

Company website: https://www.provinceresources.com/
Some info on Province Resources hydrogen project here: https://www.provinceresources.com/hyenergygreenhydrogen
And chat here: https://hotcopper.com.au/threads/ann-hydrogen-project-feasibility-studies-commencement.5938000/

Abundance of solar and wind power in the area.

I need to learn more about potential uses. A lot of heavy industry in that part of the world which could use some of the supply? Also talk of exporting.

[Fultonius]

Wood PLC are throwing a lot of eggs into the basket of Blue and later Green Hydrogen. They see significant long term growth, and we're already involved in lot of pilot and bigger scale projects - see Methil H100 project is going through planning, My team run the wind turbine that will power that...

[AndyR]

I've been interested in the investment potential of green hydrogen for a while but haven't yet pulled the trigger on any company. CERES Power Holdings have a nice 12 month chart, up many hundreds of percent, but I haven't researched them enough to know if there's still value there.

Do you use linked in Pete?
Many interesting discussions regarding “green” hydrogen on there, mostly around the energy balance needed to make it ( I.e. it needs effectively free carbon-free electricity at 100% capacity factor and unrealistically efficient electrolysis) the lack of suitable electrolyser technology etc etc.
As a long term energy carrier, more hope than reality being driven by the fossil fuel industry - real applications as that research paper notes are fairly niche (though real).

As a short term investment thesis where aspirations and positive spin outweigh reality, then might be a decent bet...

[petejh]

I'm on it but hardly ever use it, I try to avoid social media as I'm the type of person who'd waste a lot of time on it if I got sucked in! I follow a short list of twitter accounts for information from various angles for investing purposes.

Carbon free electricity at 100%  - would that be applicable to large solar farms in desert regions, with little local demand? Wind farms in unpopulated areas etc.?

[petejh]

A few interesting snippets this week..


Futura Medical (FUM). Received approval from the EU notified body for it's 'erectile dysfuntion gel' to be licensed for sale over the counter without prescription. An interesting story behind the gel is that it was originally the placebo used in a phase 3 trial run by Futura to test effectiveness of their actual product )) The placebo proved as significantly effective on ED as the product they'd spent years R&D'ing. So Futura dropped the product gel and went with the placebo gel -  'MED3000', available soon in all good chemists.
FUM's share price rocketed from 18p to 80p, settled back down to high 50s. Could be a good medium term punt as they've now also just received FDA approval from the US.
https://www.thearmchairtrader.com/futura-medical-share-price-forecast-26032021/


Arrival (CIIG) largest ever float price for a UK company - $13 billion on NASDAQ this week. They'll be manufacturing EV vans and buses from a plant in Bicester, as well as in the US. Possible links to deals with Trackwise and Ilika.. currently speculation.
https://www.energydigital.com/renewable-energy/british-electric-car-startup-arrival-lists-dollar13-billion


Greatland Gold (GGP). Fallen 50% from ath.. possibly a good buying opportunity in the high teens for the next 12-18 months as they grow the Haverion resource estimate, possible takeover target. I sold most of mine in the high 20s, just bought back in at 18.6


Alphamin (AFM.V) Tin shortage is going nowhere. AFM are the largest producer outside SE Asia, with 4% of global supply. I'm in with a big chunk at 0.58 for the long term. I'm also invested in Cornish Metals, further exploratory drilling commencing at the United Downs project in April.
Tin overview article, ignore Afritin (bag of shit imo): https://moneyweek.com/investments/commodities/industrial-metals/602859/take-a-look-at-tin-a-crucial-metal-set-to-soar?amp&__twitter_impression=true


Centuras Metals (CTM.ASX)  Due to release a scoping study next week for their Jaguar Nickel resource. It's expected to be very good news. Good rundown of the Nickel market's prospects from the growth of EVs here:
https://www.greencarcongress.com/2020/06/20200602-roskill.html
Info on CTM's Jaguar project: https://hotcopper.com.au/threads/ctm-huge-nickel-play-unfolding.5388271/
Also invested here for the long term.

[petejh]

To follow up on the Tin squeeze narrative that I've been going on about since this thread started, this is worth reading and digesting:  https://www.metalbulletin.com/Article/3980892/How-the-London-tin-market-sleepwalked-into-a-once-in-a-lifetime-spread-squeeze-%5bCORRECTED%5d.html


There are only two tin producers worth investing in - Alphamin and MetalsX. AFM the better play but worth spreading jurisdiction risk between Africa (DRC) and Australia.

[petejh]

Good straight-talking piece in the Independent about the environmental impact due to the energy consumption required by Bitcoin.
https://www.independent.co.uk/climate-change/opinion/bitcoin-mining-environment-climate-change-b1822426.html
The combined energy requirement of all machines in Bitcoin’s network is already estimated to match the electrical energy consumption of a country like Finland, and may soon be on par with the electrical energy requirement of all data centres globally (corresponding to 1 per cent of global electricity consumption). Historically, a big chunk of this energy has been obtained from regions like Xinjiang, China, as miners also search out the cheapest sources of energy. With Xinjiang’s abundance of coal fuelling Bitcoin, the network’s carbon footprint will soon match London’s.

Also a nod to the global tin shortage I mentioned above.. the shortage isn't chips, it's partly due to the shortage of tin required to solder the chips.

Currently, a global shortage of computer chips is the only thing preventing this from happening already. Semiconductor manufacturers Samsung and Taiwan Semiconductor Manufacturing Company (TSMC) are the only companies capable of mass-producing the specific chips Bitcoin mining device manufacturers like Bitmain need, and these companies are already facing significant challenges in meeting chip demand, in addition to the pressure from Bitcoin miners.

The auto industry has been hit hard by the shortage too, as millions of cars simply cannot be finished without the required computer chips. But the fallout of the shortage isn’t limited to the auto industry, as also personal electronic devices like phones and gaming consoles, also suffering in this chip crunch. New electronic devices are becoming unobtainable or severely overpriced.

[Fultonius]

One of the reasons I was always more interested in the potential of Ethereum - proof of stake. Much more energy efficient.