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Daniel Moser

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  • The Short Sell Ban: Are Markets Now Less Efficient and More Risky? [View article]
    That was completely awesome!!!
    Sep 23 10:18 AM | Likes Like |Link to Comment
  • Should the SEC Force Hedge Funds to Disclose Short Positions? [View article]
    I would like to take this time to comment that naked short selling should have never been allowed in the first place. It makes zero logical sense to me. Having said that I am quite frankly excited about the short selling disclosure requirement. There are several hedge funds that I admire that engage in short selling. I think this disclosure requirement will provide a great learning opportunity for students of finance to gain some insight and starting points for why some funds short. How could you turn down the opportunity to attempt to find out what Jim Chanos is thinking? This is a great thing if you are interested in investing.
    Sep 23 10:10 AM | Likes Like |Link to Comment
  • Ike vs. Refining Capacity and Oil Price [View article]
    I am afraid that you (whisper) are missing the point to some extent. While you are correct that crude and products (gasoline, distillate, etc) do move in tandem to an extent-albeit even a relatively large extent, refinery margins have been terrible in the U.S. because we have a gasoline driven economy. Unfortunately, for whatever reason, the U.S. made a huge bet decades ago to run the economy on gasoline vs. diesel thus we built the infastructure for gasoline.

    If gasoline and crude oil followed a more historical path over the last year or so, gasoline would be closer to 4.5-5/gallon. Maybe even higher. Big oil companies are capital constrained like any other industry. Arguably even more so given the fact that they can operate on 10% of the total reserves in the world .

    Exxon probably has terrible margins on their retail gas stations relative to E&P. Hence, a capital constrained company sells off their low margin businesses in an effort to invest more heavily in higher margin businesses like more exploration and production.

    Within the last 3 years refinery margins were at their peak for both distillate and gasoline production. They put off a lot of maintance work at that time so that they could boost earnings as much as possible. Now they are paying the piper. That is a large reason that refinery utilizations are down so extensively. They are operating with really old facilities and put off maintaining them properly for a few years.

    In my opinion, although no one asked, the recent volatility has practically nothing to do with the underlying fundamental picture. Quite frankly this is all about liquidations. I don't pretend to know where the equilibrium price of oil is but I am quite confident oil should not be moving $5 a day and natural gas moving 50 plus cents a day under normal, fundamentally driven circumstances. Don't be too hasty to draw conclusions about the direction of energy prices currently. There is a tremendous amount of noise in the system. This is what happens when you let banks get into the world of energy. This is little more than market contagion spread by the failure of most institutions that used credit to hold assets.

    The case winner here is that we need more infastructure (pipelines, refineries, etc). Until that happens energy price volatility will remain tremendously high. Drilling is a moot point if it isn't refined and distributed. Enough Said.
    Sep 17 04:05 PM | Likes Like |Link to Comment
  • Ospraie's Poor Portfolio Weighting: XTO Contributes Major Loss to Fund [View article]
    An important factor to remember when evaluating fund blow-ups is style. Ospraie was by definition a global macro fund which brings with it a vastly different risk to reward ratio. Ospraie was not a portfolio engineering hedge fund like Jacobs and Levy, thus probably not concerned with the modern portfolio theory definition of risk (a.k.a. volatility of returns). Moreover, I speculate, based on the few pages I have read from Mr. Anderson, that Ospraie believed in definition of risk that is more oriented around the probability of losing money on an investment. However, one must recall the famous Keynes quote, "the market can stay irrational longer than you can stay solvent". This is where Ospraie got into trouble. They ran a global macro hedge fund that specialized in basic material industries (why because that was Mr. Anderson's background in school as well as at Tiger). They had to be concentrated because their style of investment management was such that you don't take risks unless you have a competitive advantage....they probably had a tremendous competitive advantage but in the end the market volatility, in the short term, took Ospraie down at the worse possible time.

    While I must be sincere for a moment and acknowledge that everybody involved in Ospraie is not happy about the outcome currently, it is stories like these that make hedge fund investing so exciting. George Soros, Julian Robertson, Dwight Anderson, etc. are as heroic as dragon slayers or bull fighters. But every now and then the hero has to lose.
    Sep 9 10:41 AM | Likes Like |Link to Comment
  • SEC's New Plan Could Revamp Oil and Gas Reporting Rules [View article]
    From my understanding there is another issue surrounding the accuracy of proven reserves. Apparently there are two different numbers reported to the agencies...reserves and resources. As it turns out proven reserves reflect the economically feasible reserves. This is a huge kink in the peak oil theory as well as any other medium term shortage argument.

    As the price of oil/nat gas rises suddenly reserve numbers grow simply because projects that were not feasible a year or two before become feasible. That is a wretched way to measure the quantity of oil and natural gas on the Earth.

    It seems to me Wall Street, the media, and policy makers should be more concerned with resources than reserves in the first place. I can understand from a raw cash flow valuation perspective why proven reserves may be important for short term valuations of securities (i.e. less than 5 years). However from a long term perspective natural resource companies are much more of a call option (real or financial) and proven reserves just wouldn't allow the correct valuation in my opinion.

    Case in point, Canadian tar sand energy companies are quite literally a call option on future oil shortages. Yet because of limited technology currently, the amount of reserves available for them to harvest is grossly underestimated because it assumes no improvement in technology, which in itself is a very poor assumption.

    P.S. On a website in which knowledge can be gained, nothing productive comes from being rude.
    Sep 5 10:27 AM | Likes Like |Link to Comment