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Latest Comments31 Comments
OPEC's Cuts Can't Fight Global Recession Headwinds
Under these conditions, oil may momentarily drop to $30 and diamonds sell for the price of glass. The craziness probably won't end until at least the Japanese carry trade has been totally unwound and probably when most hedge funds are belly up with nothing left to dump.
The market is already pricing as though no one will ever drill for oil again. There are oil service companies selling at PEs below 2 right now. Their market values are below the fully depreciated replacement cost of their equipment...never mind other aspects of their usiness. Tellingly, even these companies can't be snapped up on the cheap because no one can borrow a dime.
It won't last. Without exploration, the price of oil will have to climb as pumping rates slowly decline. Peak oil is real and peak world population is nowhere in site.
Credit Default Swaps, Part Two: ICE and Other Exchanges
Still, ICE is very thinly traded, so it cannot seem to get a stable price and that makes owning it (as I do) a difficult exercise in fear control. This stock bucks harder than a wild horse and many a rider has recently been thrown off.
Salesforce.com: Pricey and Coming Down Fast
SalesForce is a model that might be attractive to a little company which can't afford the rupees to contract an Indian programmer and has an owner who believes pretty screens can make salesmen sell better (hah-hah-hah-hah). If they are lucky, it's a formula for "getting by," but never getting big.
Some years ago I looked into developing on salesforce's platform, but just couldn't justify the time and effort. Not only was I going to have to originate the product, but I'd have to sell it to. If I can sell, I can host, so what did I need them for?
I wouldn't buy this stock at $5, $2, or $1. I'll sell it all day at $30 though.
World Wrestling Entertainment, Frontline: High Yield Dividend Payers
On Board the 'U.S.S. Titanic'
This is an investment. The U.S. will buy tranches of mortgages at fire sale prices which are supported underneath by actual houses sitting on actual land. Furthermore, the vast majority of these mortgages are actually current! The securitized bundles have lost value, not because we "know" how many mortgages are delinquent, but precisely because we do NOT know. This uncertainty poisons the true value. The U.S. Treasury, however, can print money which it does not have to pay back to anyone, so it can afford to hold these mortgages for five or ten or even twenty years until home prices have recovered and the financial system can re-absorb the mortgages. This is as much a "bail out" as Buffet raping Goldman-Sachs when they desperately wanted his $5 billion. There is little chance of a long-term disappearance of housing need so in just a few years this $700 billion investment in U.S. property and U.S. homeowners by the U.S. government will become a particularly profitable deal. In fact, if the U.S. Treasury later turns around and lets us buy pieces of their deal, most of us will be quite eager to buy.
Now's the Time To Give Your Portfolio a HERO?
Forget $100 a Barrel - Oil Will Plummet to $30
Oil vs. the Market: Major Changes Expected This Month
Crude Sell-off: Solid Entry Point into U.S. Oil Majors
Alberta is indeed concerned about pollution problems surrounding the extraction process and are likely to do several things, all of which will increase the production price. First on the list may be a 30% increase in royalties.
I am long oil-related stocks, and momentarily taking a beating, but I look at the next five years and see no way for oil to remain below $150 per barrel. While I think your 300% margin requirement may be a trifle high (new side scanning techniques make drilling dry holes less likely), E&P is still an intensely risky, capital burning business and it will take oil remaining well above $100/bbl for at least a year before we see some serious new development. The oil exploration industry has to feel comfortable that the high price will still be in force 2-3 years from now when their production starts flowing before they will start shoveling money out the door to find and develop new expensive domestic resources. There are still millions of acres under contract in the Gulf of Mexico (GOM) which have not been explored, let alone drilled. Putting more unexplored acres under contract in the Atlantic or Pacific won't result in a single well being drilled until the price per barrel has stayed high for a long time and all of the GOM tracts have been drilled and are producing. The GOM comes first because flowline infrastructure already exists close to every new tract, so it's cheaper to get that oil to market.
Intercontinental Exchange and the New ICE Age
Indicator Points to Higher Gas Prices - and 3 Potential Power Plays
When crack spreads widen it won't be because of falling demand; it will be solely due to internal industry pressure--you just can't keep producing for peanuts and maintain your equipment properly. So, at some point next year, expect to see spreads widen modestly on their own.
Sigma Designs Should Fall on Lost Blu-ray Customer
Most of these losses should really be thought of as second-sourcing arrangements which are to be expected as Blu-ray makers scramble to ramp volume. As to consensus, they have always been wrong on this stock. Never close, even once. (Sigma needs to hire someone who can handle a conference call and knows how to drop hints to help these incredibly stupid analysts look better. Hell hath no fury like an analyst with egg on his face.)
At this PE for a company with products in several growth markets, there just is no short case to be made.
An Oil-Driven Paradigm Shift?
Sadly, I doubt that there is a easy way out of this one because the elephant in the room is over-population. Demand for oil, food, water, and every other resource is now or will shortly be approaching asymptote.
Buy oil, natgas, uranium, other metals, water rights...and guns.
Recent Stock Performance Based on Analyst Ratings
It's hardly worth paying attention to since the total difference between worst and best performing analyst deciles appears to be less than 5% and this small difference when the analysts are not even "predicting,"... they "postdicting.&quo...
Fuel Check
I think Jangchup has it right. It's some intermediate profit taking.
Bespoke's charts show us just what we would expect as a commodity becomes hugely more expensive: processors stop storing tons of it. Very few jewelers can afford to keep thousands of pounds of gold laying around waiting for use, but if gold were as cheap as bricks you'd see towering stacks of the stuff in the jeweler's back yard...for convenience. Same with refiners. They pay attention to dollar inventory turns llike anyone else. To fill a tank farm now takes twice as much money. Only a fool would keep up the old habits of filling all his tanks to the max.