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J Mintzmyer
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J Mintzmyer is a CFA candidate (testing Level 2) and investment enthusiast who utilizes Seeking Alpha to provide a free exchange of trading and investment ideas and to provide online visibility for his developing business. Founder and President of Mintzmyer Investments LLC, a financial services... More
My company:
Mintzmyer Investments LLC
My blog:
Mintzmyer Investments
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  • Trades & Performance In 2015

    I've been taking a haitus from my 'official' Seeking Alpha work for the past 6 months, but have been actively commenting and posting my trades.

    I was recently ranked in the top 5% of analysts worldwide on TipRanks (2y performance), and my 1y performance currently places me in the top 8% of global analysts.

    As I'm working on returning to the spotlight, I wanted to check the status of my performance so far in 2015- I designed an Excel sheet that highlights my trade performance in the short-term (under 2m), medium (2-12m), and long-term investment ideas (1+ year).

    I have posted the results below. As I expected from my account balance- the results have been phenomenally positive on the short-term side. Average return of 76% with a 67% sucess rate and average duration of a few days.

    Those who have followed my work know that I primarilly focus on the long-term angle, so I'm hoping that these 2015 picks will pan out there as well.

    The first average is if you followed my entry and exit. The second average is if you bought and held forever or to expiration. AKA you liked my recommendation but either didn't agree with sell order or were too busy to notice. In the trades, expiration was almost always better. This mirrors some of my results from last year as well. I left several 5-10x trades on the table.

    I Tweet 100% of my trades live- I often mirror them as a StockTalk on Seeking Alpha also.

    Pictures/Proof Below:

    Investments

    Mar 04 6:13 PM | Link | 5 Comments
  • Thoughts On Oil

    I have been exceptionally busy (in AF pilot training) the past few months, so I have been unable to write many of the articles that have been on my mind.

    I would like to get my thoughts down somewhere on the current oil pricing environment for two reasons:

    1) To inspire a discussion with fellow investors here and perhaps discover some new investing ideas along the way

    2) To have a verifiable way to check back in a few years and be able to judge the clarity of my decision making

    -----

    What I saw in early 2014

    I'll be the first to admit that I didn't see this coming. My #1 investment for 2014? BP. I wrote puts (thankfully spreads) and used most of the proceeds to buy out of the money calls. I looked at $BP in spring 2014 compared to $XOM and $CVX and I saw 50-100% upside potential. Needless to say this back-fired. Thankfully the put spread is for January 2016 and can be rolled to January 2017, but the losses are huge. I never post the $-size of my positions, but suffice it to say the paper losses are >10% of my net worth.

    Anyways- the point is that I was firmly entrenched in the bandwagon of long-term rising oil prices and my investments prove that (unfortunate) fact.

    What I'm thinking now (in response to 'buy big' theory)--

    Rather ironic that CVX and XOM are still relatively flat from their spring 2014 prices, while other US producers are down 50-90%.

    Obviously the long-term money isn't shifting focus while a huge majority of the growth/momentum money has fled the scene.

    If oil prices stay flat for a long time, CVX and XOM will likely gobble up 'cheap' reserves from bankrupt US producers. Although this will help both companies in the long-term, I wouldn't be surprised by a drop to 5-6% yield territory as some of the index money shifts. If 'cheap' (sub-$80) oil is here long-long (5+ years) term, than XOM and CVX may require a dividend cut, or at least a halt to growth-- perhaps 1c a year just to maintain aristocrat status.

    If oil prices recover in the short to medium term (by 2016), many US producers such as WLL, OAS, WPX, GST, etc could be 3-6x return plays.

    All 4 of the above and perhaps another half dozen US plays could be capable of surviving 2-3 years at these price levels. I'm not wasting my time looking at anything with a D/E above 100%, a P/B above 1 (book value is often far-inflated anyways), or D/A above 50%, or a Current Ratio below 1, when much safer plays offer 3-10x potential.

    --------

    Long response, but I suppose all this to say that XOM and CVX are indeed good long-term holdings, but are far inferior to nearly all other (financially conservative to moderate) producers if you believe an oil recovery is just around the corner.

    If you think oil will be cheap for a LONG time, than CVX and XOM are poor investments anyways.

    Allocation Comments (6 January)

    I'm personally long BP, CVX, XOM, GDX, FCX, BTU, ACI, ANR, EOX, DRYS, SALT. (TLM position just got taken out)

    Will soon be adding: OAS, WLL, GST, TPLM, ATXDY, WPX, EOX, RIG, BP, ORIG

    Reflection Time

    Digging deeper-- why didn't we... Heck ANYONE see this coming 6 months ago? Nothing fundamental has changed except for OPEC's stubbornness. China's slowdown has been expected, Europe's troubles have been known, Fed raising rates (ironically Tbills are moving in the opposite direction), massive US supply growth-- all of these factors have been known (expected) by the best and the brightest for at least 2 years.

    Why suddenly is everything so different?

    Perhaps we are just all on a negative group-think panic which is just the mirror image of the insanity of the 2008 oil peak?

    Really makes you wonder huh?

    Was oil exploration in the US just another investment bubble? Or are we in the middle of a groupthink bandwagon short-sighted panic? To be honest, I don't really know.

    All I do know for certain is that:

    1) in the END supply/demand will determine the pricing (even if that supply is artificially manipulated by the likes of OPEC)

    2) the companies I'm investing in can all survive 2-3 years with oil prices as low as $20-$30

    3) exploration will virtually halt in this price environment

    4) IF IF IF oil recovers within 2 years, the juniors can return up to 10x, while XOM and CVX will be lucky to go up 50%.

    Market Choice Observations

    Two observations:

    1) XOM and CVX were insanely cheap last fall and this spring (in regards to the current oil environment). Perhaps one of the cheapest multiples (to projected cash flows at $110 oil last spring) they've been in company history.

    2) Investors are fleeing en masse to:

    a- safety of oil (most people seem to buy into the theory that the big will get bigger and oil prices will rise in a few years while CVX and XOM 2x their reserves on the cheap)

    b- higher yields (notice the 10y Treasuries)-- with CVX yielding a A-grade 4%, this keeps investors there.

    I buy into the 2a theory, but I only see 50% max upside in 2 years on CVX and XOM. BP has 100-150% upside, and many of the better positioned US producers have 5x+ upside.

    Exploration vs. 'Pumping' Costs

    (in response to this: 1.usa.gov/VoGFG8 )

    What I see (assuming this data is relevant):

    'Finding costs' are clearly the major issue here. 'Finding' takes exploratory capex, which usually only floods in when 50-100%+ IRR is promised (due to the rates of failure). With average 'finding' costing 75-100% of the current crude rate, NOBODY will invest in (new) exploration.

    Exploration-->Full Production can take anywhere from 1 year to 10 years depending on the complexity of the projects, so essentially there will be a giant ripple effect globally.

    Production ('lifting') costs on the other hand, are extremely low, so current finds will produce as much as possible to pay the bills. This could keep prices low for years in the worst case scenario. Not sure if yall have noticed, but even with US juniors and middles cutting their capex by up to 75%, most will grow production y/y. Even the worst cuts (EOX for example) still result in flat y/y production for 2015.

    Ultimately the further the price goes down, the higher it could sky-rocket in the future. sub-$30 is feasible, but so is $150-$200+ (for a very short period as the zero-exploration ripple hits).

    Thus, oil will begin to trade more and more like a TRUE commodity (extremely cyclical). OPEC's control of 40-60% of the global supply has artificially kept prices high and slowly rising so far. It also has helped that South America, Africa, and the Mid-East are extremely unstable. With the majority of the supply growth in ultra-stable US, this has changed.

    In Conclusion

    Not really sure what I really think anymore (in regards to what will happen to the oil price in the next few years).

    All I know is the juniors have 10x upside while majors have maybe 50% upside.

    What's the chance of success? Is it 1% that oil will be $100 in a few years, or is it 50%, or 95%?

    Only in a scenario where the odds of oil increasing are 10-20% would investing in the super majors (over juniors) make sense. In that same scenario the super majors would be horrendous investments at these prices- perhaps down up to 75% with $RIG style yields.

    What do you think?

    What I'm Investing In

    Stock Talk feed:

    seekingalpha.com/author/j-mintzmyer/stocktalk

    Twitter:

    twitter.com/MintzmyerInvest

    I post 100% of my trades, typically within seconds but always within hours.

    I look forward to your insights and I hope I don't come back in 5 years to regret this post and my potential investment approaches.

    Jan 08 10:28 PM | Link | 18 Comments
  • Extreme Short Float On Angie's List

    Beyond the news of Angie's List (NASDAQ:ANGI) CEO William Oesterle selling 27% of his shares over the past year, several 13G filings have popped up on the EDGAR and they spell a scary story for shorts.

    Combined with short interest on Jan 31 of 18.4M shares, and assuming none of the big holders (top 8) have sold any of their shares, it appears that the practical short float may be as high as 120%!

    I've heard across the board that ANGI shares are impossible to borrow and I've heard of limited anecdotal reports of brokers forcing shorts to cover their shares due to limited supply. If my rudimentary chart below is anywhere close to accurate, and especially if any big players have upped their stake, we could be in for some massive short-term stock manipulation.

    In essence this stock is so heavily shorted that it is physically impossible for the stock to move much lower without one of the 'big names' folding.

    It seems as if Capital Research Global has 'seen the light,' but the rest of the institutions continue to increase their ownership.

    At this point, I'm resigning to the fact that my puts will probably expire worthless. Long-term the company is a $0, and probably under $5 within the next year, but for now it's devolving into a high stakes game to see who blinks first. A few of these big bag holders are going to get burnt extremely badly, but not perhaps before a significant number of shorts are crushed.

    With shorts being forced to cover and the 'big players' upping their stakes almost universally, this one could get really nasty really quickly. In fact the 'smart' trading move might be to load up on $17.50 calls for March. I won't be doing this, but I do have a $22.50/$20 Mar14 call spread play left over as an insurance play against earnings-who knows, it might pay off significantly.

    Ulterior Motives?

    On a side note, I received a message from an anonymous user suggesting that I had 'ulterior motives' due to the fact that I published an article bashing Angie's List while also holding puts ($12.50s and $15s). If anyone has any issues with what I post, please post below in a public forum, don't try to attack me or threaten me in a private message. Also please make sure you leave your full name. If you think there's any misleading information, by all means, feel free to contact the SEC. I'd love it if they looked into this company, maybe they'd find some suspicious insider dealing behavior by the CEO … Perhaps the $10.4M of insider sales while giving (allegedly) misleading statements?

    Trade History

    As often as possible, I post my trades on Seeking Alpha and Twitter within minutes in an effort to be transparent. Here is my recent history on ANGI trades (2014):

    Anyways, best of luck to everyone- it's going to be a wild week out there.

    Disclosure: I am short ANGI.

    Additional disclosure: I am short via Feb14 puts ($15 and $12.50). I also am long bullish call spreads for Mar14 ($22.50/$20).

    Feb 14 6:17 PM | Link | 34 Comments
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