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Mark Bern, CFA  

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  • Energy Sector Outlook - Part III [View article]
    DNAmap - I think that it is more that the market misunderstands. I am warming up to most things related to natgas as I do believe that the bottom is either in or very close (probably the latter). The floor should be set when exports begin to flow.
    Jul 23, 2015. 11:00 AM | Likes Like |Link to Comment
  • Energy Sector Outlook - Part III [View article]
    DNAMap - I had Royalty Trusts on my mind when I made that last comment. Let me try again, this time focusing on MLPs (my apologies).

    MLPs can be indirectly impacted by oil and natgas prices in a couple of ways. First, when the price drops by too much the volumes drop also. It will depend upon the contracts with customers as to whether all or some of the decrease in volumes will lead to decreases in MLP revenue. Even more indirectly, when a customer files for bankruptcy the contracts don't usually hold up and the volume and anticipated revenues fall. Both of these circumstances are happening now.

    So, MLPs are not completely impervious to price volatility, but they are certainly more insulated than much of the rest of the sector. That said, there could still be more downside in the near term which could provide some good opportunities. I'll try to point those out when the time is right.

    Sorry for the initial distracted response. I hope this will help.
    Jul 22, 2015. 04:31 PM | Likes Like |Link to Comment
  • Quick Chat #281 June 1 2015 [View instapost]
    WT - Let us know when that sock drawer overflows!
    Jul 22, 2015. 04:03 PM | 3 Likes Like |Link to Comment
  • Quick Chat #281 June 1 2015 [View instapost]
    True, Maya. The write downs of assets has already begun and will get worse going forward. The way the rule works, IIRC, the average price over the past 12 months is used to value the assets in the ground. If oil and gas prices remain below $60 for long, which I expect could very well happen, then the process will be drawn out over the remainder of this year. By Q1, 2016, the worst should be over, I think.

    Good moves on the refineries! The crack spread is holding up and that is where refineries make their profits. Here is a great site with weekly updates on crack spreads by region listed at the bottom. You might find it useful:
    Jul 22, 2015. 04:02 PM | 5 Likes Like |Link to Comment
  • Energy Sector Outlook - Part III [View article]
    DNAmap - Are MLPs impervious to gas and oil prices? Not always. Also, many MLPs have built in predetermined cost escalator clauses in the contracts to compensate the GP. Thus, the limited partners' share of distributable income can take a haircut. It is important to understand the agreements between MLPs and GP in each case. I intend to discuss MLPs in one or more future articles as I believe some nice wheat is being culled along with the chaff.

    Thanks for the comment!
    Jul 22, 2015. 03:50 PM | Likes Like |Link to Comment
  • Quick Chat #281 June 1 2015 [View instapost]
    shb - Good question! I am on the fence here also. I suspect that much of the Chinese money that is escaping is being invested in real estate. They haven't experienced a bad real estate market....yet. I read somewhere that a lot of U.S., Australian, British, and Canadian real estate was being purchased by wealthy for students studying abroad. That has been the case for several years, but the trend seems to be picking up a lot of steam as of last year.

    Based upon DG's link posted earlier in this thread, it doesn't look like Chinese are buying US Treasuries.
    Jul 22, 2015. 03:24 PM | 3 Likes Like |Link to Comment
  • Energy Sector Outlook - Part III [View article]
    Mr Buckeye - I haven't considered a short-term play in energy. I like to play the long term bottoms by picking up the best in class (by my assessments) and holding for income.

    I know that doesn't help, but I prefer not to throw out an off hand answer on a position I haven't thoroughly researched. Thanks for the question, though.
    Jul 22, 2015. 03:19 PM | Likes Like |Link to Comment
  • Energy Sector Outlook - Part III [View article]
    buck - May I call you Buck? Just kidding. I will be looking hard at both of the two companies you mentioned, but for different reasons. I should probably use ETFs more than I do, but I see them as more short-term plays for when one isn't sure where to money for the long haul. "ll be writing about those and other companies in the next few weeks. I intend to start with overviews of industries and then highlight my favorite companies within each as the time to invest draws nearer. Thanks for the great comments. BTW, I sent you a message here on SA so I'd appreciate if you would check your in box.

    Thanks again!
    Jul 22, 2015. 03:16 PM | 1 Like Like |Link to Comment
  • Quick Chat #281 June 1 2015 [View instapost]
    Very good points, Maya. I have decided to wait until I see signs of the hemorrhaging being over. I still like MEMP over many others in the category because of the hedges, but this seems like a case of the babies being thrown out with the proverbial bathwater.
    Jul 22, 2015. 03:11 PM | 5 Likes Like |Link to Comment
  • Energy Sector Outlook: Intermediate And Long Term [View article]
    buckallred - Thank you for the supportive comment. I do try to keep things simple to understand because I want everyone who reads to benefit fully.
    Jul 22, 2015. 12:53 PM | 1 Like Like |Link to Comment
  • Energy Sector Outlook - Part III [View article]
    buckallred - Wish I could. The bottom will come at its own pace. It could be this year or next. I am considering starting to scale in if the price of oil gets down near its low of about $42/bbl. But that would be with the idea (and expectation) of getting more even lower if oil falls further. Natgas is similar, with exports likely to begin early next year, if all goes well (pushed back from later this year from what I have read). I plan on starting a position or two there this fall before the cold weather hits.

    Patience is the key here.

    Thanks for asking.
    Jul 22, 2015. 12:52 PM | Likes Like |Link to Comment
  • Energy Sector Outlook - Part III [View article]
    moseslarsen - Thanks for catching the humor as intended. As I wrote that line I just couldn't think of a better way to word it. Appreciate someone with a good sense of humor.
    Jul 22, 2015. 11:29 AM | Likes Like |Link to Comment
  • Energy Sector Outlook - Part III [View article]
    MLrunner - Thanks for commenting. With the supply pressuring prices in the short to intermediate term I think that a lot of frackers that loaded up on debt are in big trouble. The assets will get picked up by the better capitalized companies. This happens in every boom bust cycle in energy. This time is no different. When it is all over there will be some opportunities to buy the stodgy old majors at rock bottom prices for the long haul and good yields.
    Jul 22, 2015. 11:27 AM | Likes Like |Link to Comment
  • Quick Chat #281 June 1 2015 [View instapost]
    Interesting article, DG. Thanks for sharing the link.
    Jul 22, 2015. 12:28 AM | 2 Likes Like |Link to Comment
  • Hindenburg Omen - November 13, 2012 [View instapost]
    It's been a long time since anyone posted here, but I thought it might be worth noting that we may have had an HO event.
    July 16 looks like it may have been the first one with July 20th being the second. If I am wrong, please let me know and why. I may have missed something.

    With the market reacting badly to bad earnings news more frequently (seems almost normal in some ways; at least at times) my thoughts are that the HO may actually have more meaning than in the past. Can or will the PPT come to the rescue again?
    Jul 21, 2015. 06:24 PM | 3 Likes Like |Link to Comment