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Christopher Wallace

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  • Natural Gas Contango Has Returned: Implications For Investors [View article]
    UNG buys front and subsequent month natural gas futures. The subsequent month is usually higher than the front (contango). This therefore becomes a cost to UNG. If gas stays flat, UNG will fall approximately by the amount of that contango. If gas rises by more than the amount of contango, then UNG will rally.
    Sep 7 12:49 PM | Likes Like |Link to Comment
  • Natural Gas Contango Has Returned: Implications For Investors [View article]
    The numbers are for the natural gas commodity, not UNG.
    Sep 7 11:30 AM | Likes Like |Link to Comment
  • Natural Gas Contango Has Returned: Implications For Investors [View article]
    $0.16 was the spread between the front and next months contracts on the day I wrote the article. Right now it is 13.5 cents, and is obviously a moving target. http://bit.ly/Irfoya .135/2.775 is 4.9%, your number.
    Sep 7 12:09 AM | Likes Like |Link to Comment
  • Natural Gas Contango Has Returned: Implications For Investors [View article]
    BOIL is a levered nat gas commodity etf, 2 x to the upside. Other levered gas etfs are UGAZ (3 x up) and HNU.TO (2 x up). In addition to contango, these etfs are also affected by their leverage costs. In the article I mentioned that UNG is generally best held for shorter durations because of contango, and this becomes even more important with levered etfs.
    Sep 6 10:10 AM | Likes Like |Link to Comment
  • Natural Gas Contango Has Returned: Implications For Investors [View article]
    Right you are - thank you. I will see if I can edit and change to the correct symbol.
    Sep 6 10:04 AM | Likes Like |Link to Comment
  • Latest EIA Data Shows Resilient U.S. Natural Gas Production [View article]
    A good description of the "shadow inventory" (wells awaiting completion or pipe, associated production) and how the correlation between rig count and production is not one to one. You summed up with "Looking forward, all these factors will contribute to a delayed and shallower decline in the US natural gas production than may appear. " I am tempted to respond that perhaps more accurately, "Looking BACKWARD, all these factors HAVE contributeD to a delayed and shallower decline in the US natural gas production than may appear." It seems to me that the shadow inventory has already affected production and muted the effect of the rig decline. But that effect has probably peaked, given the steep decline in the Marcellus gas directed rig count of 32% over the last year (http://bit.ly/SdX8OP). The extraordinary lag in rig count decline and production decline (well accounted for in your article) has got people to thinking that rig count has lost relevance. Not so. While production numbers have declined gently this year in the face of steep declines in rig count, ultimately the two will correlate. Until wells stop being subject to production declines and until they find another way to extract gas other than with a drill rig, rig counts will drive the direction of production.
    Sep 3 11:50 AM | Likes Like |Link to Comment
  • Salesforce.com: Signs Of A Breaking Business Model [View article]
    Exactly! With scale should come increasing marginal return from investment. That they are diminishing as the company adds scale shows the model as executed has become broken.
    Aug 29 06:27 PM | Likes Like |Link to Comment
  • Salesforce.com: Signs Of A Breaking Business Model [View article]
    You have read it correctly. What makes it startling is how the company claims they are doing such a great job growing cash flow.
    Aug 29 06:25 PM | Likes Like |Link to Comment
  • Salesforce.com: Signs Of A Breaking Business Model [View article]
    "It is hard to pick a top on a short" Yes, it certainly is. (It is also hard to pick a bottom on a long.) My article was written from a fundamental perspective. A better technical analyst could provide another perspective on timing of entry. That said, the stock does appear to be rolling over and momentum coming out of the price.
    Aug 29 06:23 PM | 1 Like Like |Link to Comment
  • Salesforce.com: Signs Of A Breaking Business Model [View article]
    "I disagree that the business model is to blame." I think you raise a good point and it makes the distinction between the business model and its execution. Perhaps it more accurately is the CRM execution that is broken. The Cloud itself is not a broken model, but CRM's disregard for the bottom line and invest for growth at any cost is what has become broken. They have certainly demonstrated their ability to attract customers and revenue. But the cost of doing so has become so high for them as to defeat its very purpose. They need to generate true profits from all of this revenue growth. The current model is broken as they increasingly get further from that objective.
    Aug 29 06:16 PM | 4 Likes Like |Link to Comment
  • VIX Futures Curve Means Trouble For VIX ETFs [View article]
    No, there was no negative correlation on backwardation either.
    Aug 29 03:01 PM | Likes Like |Link to Comment
  • Salesforce.com: Signs Of A Breaking Business Model [View article]
    Full disclosure: I am now short CRM through in-the-money put options.
    Aug 29 10:42 AM | 1 Like Like |Link to Comment
  • Salesforce.com: Not So 'Amazing, Great, Incredible' [View article]
    @Diana, your point: "While, there are no clearcut standards for non-gaap numbers the intent is normally to present a clearer picture to investors of underlying business operations. Not to obfuscate them." is right on. I went through their numbers for the last four years to try to get a better understanding. What that exercise showed me is that their business model is becoming broken. They are getting diminishing marginal returns from their spending and the picture is not pretty. Prompted me to do an article on the subject: http://seekingalpha.co...
    Aug 29 10:13 AM | 2 Likes Like |Link to Comment
  • Why Last Week's Natural Gas Decline Was Only A Dip [View article]
    When you are wrong you are wrong and you should stand up and say so. I was wrong. This decline from $3.21 down to today's level of $2.61 is 18.7% and that is more than just a dip. While I believe the long term thesis for gas remains in tact, and that we will see higher prices this year, my call for a short term dip was clearly wrong.
    Aug 28 03:47 PM | Likes Like |Link to Comment
  • Salesforce.com: Not So 'Amazing, Great, Incredible' [View article]
    Diana,

    While I a agree with your overall point that backing out stock based expense is misleading, in fairness to CRM, one thing does need to be pointed out. They have never claimed stock expenses to be one-time, or not a "real" expense, but simply non-cash. And so their operating cash flow number adds that expense back, along with amortization and other non-cash expenses. The number as reported appears to be accurate, but where you and I agree is that it is at best a poor measure of performance. And it certainly seems to have been taken out of context by the bullish camp as the primary number to focus on, to the near exclusion of the GAAP numbers and other return metrics.
    Aug 28 11:48 AM | 1 Like Like |Link to Comment
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