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Kevin Stecyk

 
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  • ExxonMobil's Q3: Business as Usual [View article]
    Thank you for commenting Michael. Please allow me to respond to some of your points.

    1) 20% increase in production is not business as usual.

    First, I didn't pick the title. And second, while 20% increase in production is not typical, the results for the combined companies of XTO and ExxonMobil were strong, business as usual. There was no unusual activity--either a decrease or decrease. So, it's business as usual.

    2) Natural Gas as Transportation Fuel.

    ExxonMobil addressed this point during its March analyst meeting. I discussed that point in my blog:

    Long Link:
    speciousargument.com/b...

    Short Link: goo.gl/oOuA

    As you'll see when you read the article, natural gas as a transportation fuel is not so easy.

    3) Bernanke and other stuff. I largely agree with your comments.

    Again, thank you for commenting.
    Nov 1 10:52 PM | 1 Like Like |Link to Comment
  • Exxon Mobil Leads the Way With High Oil Here to Stay [View article]
    Financial Times Article: Oil surges amid maintenance in North Sea

    www.ft.com/cms/s/0/1d1...

    Quote=========
    Published: August 3 2010 11:42 | Last updated: August 3 2010 23:07

    Oil prices surged to a three-month high above $82 a barrel on Tuesday as European benchmark Brent oil moved higher lifted by lower production in the North Sea fields due to maintenance.

    Oil companies such as Nexen have delayed supply of some cargoes of physical Brent blend crude as many of the North Sea’s 50 or so fields undergo planned seasonal maintenance and production in others stops due to unplanned outages, analysts said.
    ========

    Jimmy46 wrote, "Private companies play a minor role now. "

    How about that, maintenance on *one* field causes oil prices to rise. Now, just imagine if that same trend of reduced production were to happen worldwide because of underinvestment. What would happen to prices then?
    Aug 3 07:32 PM | 1 Like Like |Link to Comment
  • Exxon Mobil Leads the Way With High Oil Here to Stay [View article]
    Jimmy46, What are the operating costs for an oil sand company? Remember, ExxonMobil has partial interest in Syncrude and owns Kearl.

    What is the breakeven oil price required for new projects? What is the decline rate of conventional oil? After five years of underinvestment, how much would non-Opec production fall?

    What is the elasticity of demand? Supply? In other words, if even just a few of the major producers are unable to maintain production, what happens?

    All you have offered Jimmy46 is rhetoric supported by nothing.
    Aug 2 08:25 PM | 2 Likes Like |Link to Comment
  • Exxon Mobil Leads the Way With High Oil Here to Stay [View article]
    :::Kevin, I responded to your post line by line.

    Then you question of, "US Oil consumption Peaked in 2005, and has gone down 4 years in a row. So would you consider 4 years a prolonged period of decreased oil demand? " is a non-sequitur. I already stated that consumption for OECD countries has peaked. So why ask something that was already addressed?

    If you think oil is about to go down for a prolonged period, short it. It's a free country. And that's what makes markets.
    Aug 2 02:54 PM | 2 Likes Like |Link to Comment
  • Exxon Mobil Leads the Way With High Oil Here to Stay [View article]
    >>- US Oil consumption Peaked in 2005, and has gone down 4 years in a row. So would you consider 4 years a prolonged period of decreased oil demand?

    The U.S. is part of the of the OECD, no? Perhaps read my response before responding yourself.
    Aug 2 12:25 PM | 1 Like Like |Link to Comment
  • Exxon Mobil Leads the Way With High Oil Here to Stay [View article]
    >>So oil prices can't go down because if they do it's going to hurt producers? I disagree with that logic. Commodities don't have feelings and don't care if overleverages producers go bankrupt or not.

    When producers go bankrupt because prices are insufficient, there is less production. My key thesis is that demand for oil will never go down substantially for a prolonged period. So with less production and current demand, prices will resume. ~No feelings required.~

    And yes, oil demand for OECD countries has likely peaked. But OECD countries are not all the countries.

    And as far as Chanos's thoughts on China are concerned, I'd rather listen to Jim Rogers. For those not familiar with Jim Rogers's view on China, Google is your friend.
    Aug 2 11:16 AM | 3 Likes Like |Link to Comment
  • Parsing Blue Nile's Q1 2010: Continual Growth in a Difficult Market [View article]
    I never said I ignored valuation. Rather, my point was and is that current concerns about global economies are going to drive the stock. If the world economies begin to recover in earnest, then the stock will move higher. Conversely, if world economies take a hard fall, NILE won't escape the carnage.

    NILE has always traded above a 2 PEG ratio, which is fine. The current five year PEG ratio is only 2.37. For a stock that has lots of potential growth, that isn't an outrageous value. It's higher than the bears believe it should be. But *I* am not concerned.

    If you want to perform a discounted cash flow analysis, you have to make some *guesses* about growth rates and margins and such. If I were to do that, my error bars around my key inputs would be so large that I could arrive at almost any valuation you or I wanted.

    So, in effect, I am saying that the valuation appears to be within historical norms for this company. We note too that management is buying back shares at around $50. (Many of the bears didn't believe NILE would buy back shares for a long, long time.) Moreover, it is showing strong growth in an exceptionally difficult economy, one in which many investors are shunning consumer related stocks.

    I hope that sheds some light.
    May 18 11:24 AM | Likes Like |Link to Comment
  • Parsing Blue Nile's Q1 2010: Continual Growth in a Difficult Market [View article]
    "The problem is that they only grew 20% in q1 vs q1 2009 (when we were almost in a depression.)"

    In the conference call section, the company provided guidance: Maintaining sales growth at 15% or greater and diluted earnings per share at 20% or greater.

    With regard to unemployment and recession, please refer to these two government sites:

    www.bls.gov/news.relea...

    Compare April 2009 with April 2010. Look durations of unemployment.

    www.bls.gov/lau/stalt.htm

    Here you'll note that the U-6 (unemployed, underemployed, and discouraged) is 16.7%. During the depths of the recession, it was at 17.5%. In other words, we haven't moved too far from the lows. And to be growing at 20% during these hard economic times is pretty darn good.

    Thank you for your balanced comment.
    May 18 10:21 AM | Likes Like |Link to Comment
  • Parsing Blue Nile's Q1 2010: Continual Growth in a Difficult Market [View article]
    "Exactly. If you ignore the valuation on the stock, it's a great buy. If you worry that a company that might grow at 20% is trading at 50 times earnings, then it's a short."

    Problem is, many have believed it was a great short since it was at $20 two years ago in February 2009. Others commented back then too about the excessive valuation. And here we are at more than 2.5 times that value. At least if you're long, you can only lose your original investment.

    We can all point to companies that have crashed and burned. It's easy to do.

    How many companies can say that they are enjoying strong growth during an extraordinarily difficult environment and are prospering while their competition are floundering in disarray?

    As I write this message to you, the S&P 500 is up 9.63 or 0.84% while NILE is up $0.79 or 1.55%.

    In any event, I thank you for your comment. People have different views and that's what makes markets.
    May 18 09:53 AM | Likes Like |Link to Comment
  • Making Sense of Blue Nile's Web Traffic Data [View article]
    <img class="authors_reply" src="static.seekingalpha.co...">

    <img class="authors_reply" src="static.seekingalp...

    On Nov 16 08:28 AM bdrose wrote:

    > Do you think they are actually going to grow year-over-year, rather than sequentially, for the 4th quarter?

    Last year, "Blue Nile reported net sales for the 14-week fourth quarter of $85.8 million..."

    investor.bluenile.com/...=

    According to their 3Q press release,

    >>We are projecting fourth quarter net sales between $100 million and $109 million, and diluted earnings per share in the range of $0.35 to $0.39.

    (See my quote and link in the published article above.)

    Because they are forecasting year on year sales increase for the fourth quarter, the answer to your question is "yes."
    Nov 16 04:04 PM | Likes Like |Link to Comment
  • Blue Nile's Strong Q3: The Outlook Just Got Brighter [View article]
    <img class="authors_reply" src="static.seekingalpha.co...">

    On Nov 12 08:59 PM Michael Shulman wrote:

    > Your note was amusing since it relied on data and numbers rather
    > than hope and hype -- but how can you be bullish on a company so
    > grossly overvalued facing 2% growth?

    Odd, I received the same negative comments back when NILE was $20.

    > They have experienced margin
    > expansion due to cost controls and reductions -- a one time event

    Did you listen to the conference call? Margins are expanding for two reasons: 1) Product mix and 2) Better sourcing. And product mix will be an increasing benefit. In other words, it ain't over yet.

    > -- and sales are essentially stagnant. They are selling for 80 times earnings -- if they grew profits 20% a year it would still take them four years to grow into the premium the market is assigning to them.

    Earnings in the depths of a huge recession, one of the worst since the Great Depression, one where the U-6 Unemployment rate is 17.5%. Hey, I am happy they have profits at all.

    But not only do they have profits, they have growing profits and growing cash flow. And they might even be buying back shares soon. As any investor knows, next year's earnings in the depths of a recession are not that important. Often companies will have extremely high p/e during the depths of a recession. So what?

    But more importantly, while Blue Nile is growing its profits and cash flow and gaining market share, it's competition is struggling just to survive. Or put differently, Blue Nile is profitably increasing market share. And that's a good thing.
    Nov 12 10:41 PM | Likes Like |Link to Comment
  • Don't Believe Long-Term Oil Forecasts [View article]
    Be sure to read part II of this article:

    seekingalpha.com/artic...
    Nov 11 02:58 PM | Likes Like |Link to Comment
  • Don't Believe Long-Term Oil Forecasts [View article]
    Please ignore the second last paragraph where the article mentions my Fish Creek Park photograph. On my blog, where Seeking Alpha found my article, I usually have a random photograph to begin my posts. At the end of the article, I usually write a brief blurb. Unfortunately, the photograph stuff was captured in this Seeking Alpha post. The editors might have removed the offending paragraph by the time you read this note.
    Nov 8 01:24 PM | 1 Like Like |Link to Comment
  • Blue Nile Q1: Targets Raised on Strong Performance [View article]
    Thank you for your well written article Eric. I was hoping to write my own positive article when Seeking Alpha released the transcript from the latest conference call. Perhaps SA is just late, in which case I will write my article in the near future.

    Anyway, for those who didn't listen to the conference call, I urge you to do so. It wasn't a barn burner, but it was better than I expected.
    May 11 03:57 PM | Likes Like |Link to Comment
  • Leveraged ETFs: Handle with Care [View article]
    On Mar 26 04:50 AM limps wrote:

    > Kevin, your advise is completely flawed. Your comment is just an
    > explanation of how maths work.

    And it's all about math. If you read the article carefully, you'll note that ProShares walks you through the same math. Again, it's just math, and rather simple math at that.
    Mar 26 10:49 AM | Likes Like |Link to Comment
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