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Re: The Trading Log

Posted: March 21st, 2021, 8:12 pm
by compscidude
> Yah, that record book is literally four months old. Astounding stuff.

Hello GoSeigen, thanks for your reply.

However... what are you talking about? You surely can't have read the article.

(If paywalled, put a '.' after the .com in the URL to see the full text, or google the title to find identical coverage from other sources).

It's an all-time record.

In the text it's also clearly noted that even if you adjusted down the figures to reflect the generally larger size of equity holdings nowadays, it's still the highest inflow since 2014.

"Meanwhile, Goldman Sachs estimated that net flows into global equity funds hit a nominal record of $68 billion in the week ended March 17, which when scaled to the level of mutual-fund equity assets was the largest since December 2014."

Re: The Trading Log

Posted: March 21st, 2021, 9:35 pm
by GoSeigen
compscidude wrote:> Yah, that record book is literally four months old. Astounding stuff.

Hello GoSeigen, thanks for your reply.

However... what are you talking about? You surely can't have read the article.

(If paywalled, put a '.' after the .com in the URL to see the full text, or google the title to find identical coverage from other sources).

It's an all-time record.

In the text it's also clearly noted that even if you adjusted down the figures to reflect the generally larger size of equity holdings nowadays, it's still the highest inflow since 2014.

"Meanwhile, Goldman Sachs estimated that net flows into global equity funds hit a nominal record of $68 billion in the week ended March 17, which when scaled to the level of mutual-fund equity assets was the largest since December 2014."



No I read the article. It had nothing supporting its "record" figure except a four-month chart.

Not only that, but neither you nor the article gave additional context of net $240bn OUTFLOWS from US equities last year, following years of net outflows before that. So IMO if there are strong inflows at the start of this year, then if anything that is profoundly bullish as it signals a switch of investing strategy from a group of investors you evidently view as significant (having just posted about them).

https://www.morningstar.com/articles/1017899/us-fund-flow-records-fell-in-2020

FWIW, many of my favourite pointers are bullish equities, e.g yield curve, consumer credit, etc -- though I favour UK over the US, which is probably a mistake. So I am buying steadily still.


GS

Re: The Trading Log

Posted: May 4th, 2021, 7:41 am
by daducky
StepOne wrote:And just to point out that csd hasn't confirmed if he got back in at 763. That price was available for one day. It's currently well over 9 pounds which would have eaten significantly into the claimed 34% profit from shorting. So unless you are mystic meg there's not much attractive about the strategy being suggested.

StepOne


I seeeee ;-)

Re: The Trading Log

Posted: June 8th, 2021, 4:51 pm
by compscidude
Hello dear friends

Sold out of my BP & Total positions completely in the last hour. Wish I'd sold them last week for a few pennies more!

(UK market price peaked at 326p and 40 euros / £35.45 last week briefly; though in the US the effective price on BP ADRs was 329.5p briefly).

My sell price BP 324p (market mid: 324.05p as I post this)

My sell price TOT 3420p (market mid: 48.50 USD / £34.31 as I post this)

Remaining holdings: uninvested cash + RDSB bought last year, which I currently intend to hold till maybe £14.50-£15.00 depending on how the oil price goes.

An OK profit was made on BP & TOT purchases from last year including dividends but GBPUSD movement has eaten 10% of it, booooo. (Was 1.28 $/£ before, now £1.41 $/£). Might put my money into US treasuries or something and lock in the 10% gain of USD vs GBP.... I don't have much confidence in Boris to keep the plates spinning.

Regrets: should have sold BP, RDSB, TOT a few months back at higher GBP prices, and flipped to BRK, but you live and learn. I have a pishy little 4p dividend as compensation for my stupidity.

Hope you are all enjoying and profiting from the buoyant markets, try not to get sucked into envy of the meme stocks!

comp

p.s. re: a previous post which talked about my "profit from shorting", 100% baffled. I haven't held a short position in the last 15 years, I haven't even had access to a mechanism to place shorts, I've never said I've shorted, and I've never advocated shorting, and indeed I think it's a stupid way to approach investing. But, hey, never let a fact get in the way of a good story. I suppose it's possible for someone to be unable to distinguish between 'selling a stock you invested in' and 'shorting a stock you don't hold'.

Re: The Trading Log

Posted: June 8th, 2021, 5:56 pm
by compscidude
A short essay on some rubbish gut-feel valuation methods.

In case anyone is interested in my reasoning for selling BP / Total. This is a bit hand-wavey but hopefully you get the idea.

Method 1. BP:

1. Looking at the graph of the past 5 years, the price was in the range 420 - 590p until covid showed up. Eyeballing it, looks like the time-average was 500p and that's in the middle of the range. So let's take 500p as an average / sort of fair price over that time.

2. GBPUSD rate ranged 1.15 to 1.45 over the last 5 years. Eyeballing it around 1.29.

3. Add/Deduct some arbitary penalty %s from the price, based on gut feelings.

3a. -10% "approximate GBPUSD rate movement"

3b. -10% "oh dear I have far too much in oil these days, don't feel comfortable"

3c. -5% "political headwinds emerging against fossil fuels"

3d. -5% "BP changing its business model very substantially, possibly overpaying for wind sites, general risks of a major business pivot"

3e. -10% "Market is at crazy bubble prices, CAPE is like 37.5 today, people are using margin & options to bet on ridiculous meme stocks like it's the peak of the dotcom era, I don't like being in this market at all!".

4. Calculate it out - 500 * 0.9 * 0.9 * 0.95 * 0.95 * 0.9 = gives you 328 pence.



Method 1. Total / Totalenergies:

1. Share price range 40-56 euros pre-covid. Average e.g. 48 euros.

2. GBPEUR range 1.075 to 1.20. Average maybe 1.14.

3a. -2% "approximate GBPEUR rate movement"

3b. -5% "political headwinds vs fossil fuels"

3c. -10% "scary market"

4. Calculate it out - 48 * 0.98 * 0.95 * 0.9 = 40.20 euros / £34.66


Method 1 summary: This is all extremely hand-wavey and I'm just putting totally arbitrary %s on the penalties but sometimes a gut feel / 'back of an envelope' valuation is the best you can hope for.

Method 2. A second crude way of doing valuation is just to say 'The price is roughly 50% over the cheapest price of the last 25 years, probably means most of the value in this deep value play has been played out now".

Method 3. A third crude way is to ask my gut if I would bet that BP or Total would outperform a FTSE100 tracker in terms of total risk-adjusted return going forward in the next few years. I can't honestly say that I believe that's much better than a 50/50 bet.

Method 4. A fourth crude way is to ask my gut "Do I think the price of BP / Total / Shell is more likely to be higher, or lower, 6-12 months from now?". With Shell, I'd say "70% chance higher, 30% chance lower". But for BP and Total? Hmmmm... maybe 60/40? Maybe 50/50? Certainly close enough to 50/50 that my gut doesn't have strong feelings about it.

The problem with these oil shares is that I have a great deal of trouble in valuing them formally with a proper IV / DCF calculation because they're so incredibly sensitive to the oil price. In Ye Olde Days that wasn't a problem. But the oil price this last 18 months has been incredibly sensitive to e.g. people in some far off country sneezing on each other and getting on a plane. Random mutations in microorganisms occurring in individual people. Extremely narrow margins of victory in US elections and random crazy political events. I mean, good lord, just a few months ago, the united states faced an insurrection out of the blue with armed citizens marching through the halls of power and a set of gallows built outside! Just 2 weeks ago, a random individual Dutch judge decided to use his sense of personal ethics rather than strict word of law to compel Shell to completely change its business model on his own choice of timescale. Huge boats being randomly steered into the sides of canals by idiots. OPEC etc - just some guys in a room bluffing against each other. India altered its stance on buying oil from the middle east recently based on S.A. donating their spare oxygen generators at peak crisis. BP yolo'd itself into wind energy sites at a price far above any other offer. When will each country open up again, and how much? How much energy will they need this year? How can you possibly put meaningful numbers on any of this? I mean, some guy can, but it's surely not me.

All I can say really is that oil stocks felt very cheap before and now they only feel "maybe a bit cheap, or maybe not". Not going to win any Nobel prizes in Economics for this sort of analysis I suppose, but that's life.

comp

Re: The Trading Log

Posted: June 8th, 2021, 10:04 pm
by compscidude
Oops, this bit was worded stupidly:

"Method 2. A second crude way of doing valuation is just to say 'The price is roughly 50% over the cheapest price of the last 25 years, probably means most of the value in this deep value play has been played out now"."


should instead read something like:

"Method 2. A second crude way of doing valuation is just to say 'The price right now is roughly 50% over the low of the last few years (which was around the cheapest price of the last 25 years). Quickly rising to 50% over a low point probably means much of the value in this deep value play has been played out now"."

I mean it's not necessarily true; some shares ten-bag after hitting a low or whatever. But context matters. BP's current price is more than 50% above the lowest point of the last few years and less than 50% below the highest price.

The point I'm making is that if you come up with a bunch of crappy metrics and they all point you at the same conclusion then maybe that means something; at least, more than if they all point at different conclusions.

comp