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Lawrence Fuller

 
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  • The Oil Price Plunge - Fiction, Reality And Opportunity [View article]
    zbignue: The system works for some very well, others not so well, regardless, we are investors and have to figure out how to make it work for us. I like both your longs a lot! High quality, liquid and dividends to boot.
    Dec 21, 2014. 12:35 PM | Likes Like |Link to Comment
  • The Oil Price Plunge - Fiction, Reality And Opportunity [View article]
    I think the alternative is to end the aspects of the Commodity Modernization Act of 2000 that allowed banks to act as counter parties and skirt the position limits - that's what led to the Enron fiasco...
    Dec 21, 2014. 10:42 AM | 3 Likes Like |Link to Comment
  • The Oil Price Plunge - Fiction, Reality And Opportunity [View article]
    bbro -
    There are many, many jobs created in different industries all related to the oil and gas boom including info tech, services and construction, so while there may be 1 million or so that are directly involved in oil and gas, there are 10x that amount created as a result of those 1 million directly involved.
    Dec 21, 2014. 09:38 AM | 3 Likes Like |Link to Comment
  • The Oil Price Plunge - Fiction, Reality And Opportunity [View article]
    Hi Flash,
    I don't think I put too much weight on speculators, as it is their interpretation of those fundamentals that dictate prices, regardless of whether or not that interpretation is correct. If the fundamentals dictated prices, to the extent that speculators in the futures markets were betting in a direction counter to the direction of the fundamentals and lost, then I would agree. Yet its seems to me that it is the interpretation, right or wrong, that dictates.
    Dec 21, 2014. 09:30 AM | Likes Like |Link to Comment
  • The Oil Price Plunge - Fiction, Reality And Opportunity [View article]
    David,
    Again thank you for sharing the informative articles. I enjoy reading them all.

    My resolution to the bubble issue is to ELIMINATE the Federal Reserve banking cabal and allow a truly free market to operate. A monkey could have done what the Fed has done the past five years, and I don't mean to offend monkeys in any way, my apologies to them.
    Dec 21, 2014. 09:24 AM | 11 Likes Like |Link to Comment
  • The Oil Price Plunge - Fiction, Reality And Opportunity [View article]
    David,
    Great comments, thanks for the informative articles and information. When you say that the Saudis have forced down the price of oil, I'm not sure I agree. Were they responsible for the oil price drop from $75 to $55 because they didn't cut production? Or was it investors unwinding speculative positions in the futures market? I'm not sure the price wouldn't have collapsed regardless. There was clearly a connection/reaction. I think the Saudis are very aware of the idiocy that has become our financialization of oil and they aren't willing to play these games. I simply think that over the past 15 years we have become a world that is run by "paper" or derivatives be it currency, equities, fixed-income and now commodities. And the buyers are sellers of that paper has changed from people to computers.
    Dec 21, 2014. 09:20 AM | 6 Likes Like |Link to Comment
  • The Oil Price Plunge - Fiction, Reality And Opportunity [View article]
    Hi Alex,
    I was not implying that energy outfits that borrow in the high yield market are bad. They are doing what they can to start and run a business, bravo! As for commodities investing, it is what it is, I don't think it makes a lot of sense not to have position limits and allow the tail (paper) to wag the dog (hard asset) when this particular hard asset is what makes the world go round.
    Dec 21, 2014. 09:00 AM | 2 Likes Like |Link to Comment
  • Oil Markets: Sentiment And Lame Thinking Are Currently In The Driver's Seat [View article]
    Excellent article, just pure common sense.
    Dec 13, 2014. 08:24 AM | 2 Likes Like |Link to Comment
  • Crucial Facts About Energy Stocks [View article]
    The price of oil is determined by investor/speculator demand for oil futures contracts on the exchanges- period. It has very little to do with real world supply and demand, but investors/speculators view of what that supply/demand relationship is today, in addition to weather, geopolitics, global economic outlook, ect. It can turn on a dime, and will. This decline is forced hedge fund liquidation driven, and has been so for the past two months, and the reversal upward will be just as violent.
    Dec 10, 2014. 11:46 PM | 21 Likes Like |Link to Comment
  • The Only 2 Charts You Need To Understand The S&P 500 [View article]
    Keep it simple stupid, and this is as simple and correct as it gets. I'd put more emphasis on the computer trading component lopped on top of the yen carry trade + stock buyback craze. The three in combo have been a powerful tailwind. The lack of liquidity cuts both ways, and this phenomenon has given it an upward bias, with exception of speedy and violent corrections like we had in Oct.

    I wouldn't look at stock buybacks as wrong or right, simply a significant factor in stock performance that is not sustainable, and which will have a major impact in terms of demand down the road, or lack thereof. The likelihood is that the yen carry unwinds around the same time the stock buybacks slow or end, at which point the liquidity offered by the HFT programs dries up - then we see the other side of the coin, and it will be very ugly. Grab a chair when the music stops. It always does.
    Dec 7, 2014. 08:05 AM | 1 Like Like |Link to Comment
  • The Only 2 Charts You Need To Understand The S&P 500 [View article]
    How to participate? Find high quality companies that are joining the party. Fluor (FLR) recently borrowed 500M at 3.5% for 10 years to double their share buyback program in 2015. They intend to buy 10% of the outstanding shares - a nice tailwind for a stock that has declined 25% in recent months along with the energy sell off. They also have 2B in cash and this recent offering only lifts total debt to 1B.
    Dec 7, 2014. 08:04 AM | 1 Like Like |Link to Comment
  • $150B+ of oil projects likely to be put on hold in 2015 [View news story]
    Exactly, small shifts in the supply curve have a huge impact on the supply and demand for the front month futures contract.... these buyers never actually take possession of the barrels they purchase represented by the contract, they roll them out. Therefore, it is not the commercial demand or supply that impacts price, but the futures contracts that are bought and sold.

    Those that believe real world supply and demand impacts price will have difficulty explaining why oil ran up to $150 a barrel in the summer of 2008 during a global recession - oops! The traders didn't know the real world was in a recession at the time. Back then the airlines were getting killed, complaining to Congress that derivatives market be more closely regulated, as the wall street banks were influencing (others say manipulating) price.... the airlines were saying the price was not reflecting real world supply demand.
    Dec 5, 2014. 06:55 PM | Likes Like |Link to Comment
  • $150B+ of oil projects likely to be put on hold in 2015 [View news story]
    The price of oil price swings like a social media/tech stock because it is driven by paper trading in the futures market. These short term trading swings are then interpreted as major changes in global supply and demand of the real thing, which is absurd. Real world dynamics don't change that quickly. If the major producers changing their long-term plans based on these short-term moves, they wouldn't be in business. Instead, they look at them as opportunities to capitalize on the competition. Exxon would love oil at $40 or $50 for a few months, they'd go shopping like never before.
    Dec 5, 2014. 07:11 AM | 10 Likes Like |Link to Comment
  • Stocks: Clear Sailing Into 2015 [View article]
    Recent days looks more like panic buying by institutional equity managers that are trailing their benchmarks, buying big, ugly and liquid names that influence the indices in hopes of catching up and earning a bonus. With an ever strengthening dollar, why are small caps deteriorating (again) so badly. They should be leading. The 5 and 10 day moving averages for the RUT have now fallen below the 20, as they did just before the small cap swoons in July and September. Breadth continues to deteriorate. Why are long-term treasury yields declining? They should be rising if we are seeing an acceleration in economic growth. Not a lot making sense right now.
    Nov 23, 2014. 09:19 AM | 10 Likes Like |Link to Comment
  • Why The Correction Didn't Become A Crash [View article]
    The Fed will never sell the bonds it purchases. They will let the portfolio run off/mature. Unless they organize a plan to sell them to other central banks, directly, behind closed doors without our knowledge so as to not create a panic. They can and do, do what ever they want, with no checks or balanaces.
    Nov 1, 2014. 11:03 AM | 4 Likes Like |Link to Comment
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