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Netwall  

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  • Crude Oil And USO - Get Ready For Another Perfect Storm [View article]
    VD, Couldn't agree with you more. True value investors are being tested in this environment. This is what value investing is about, buy something that has a fundamental demand, when nobody wants it.

    The only thing that puzzles me sale of XOM by Warren Buffett. But it wouldn't surprise me if his filings show later this year that he was buying oil big during these initial months of 2015.
    Mar 25, 2015. 10:08 PM | 4 Likes Like |Link to Comment
  • Crude Oil: Why A 'Storage Crisis' Might Not Be So Bad After All [View article]
    There are many conspiracy theories floating around regarding Saudi Arabia's role in this Oil collapse but they absolutely have nothing to do with it apart from not reducing output. And they can't as these "poor" kings have to balance their budgets and feed their lazy populations with these oil gushers.
    Mar 23, 2015. 05:03 PM | Likes Like |Link to Comment
  • Southwestern Energy: Double Down Or Fold? [View article]
    A couple of points on PUT writing:

    1. Writing PUT Leaps may reduce your cost basis further since the premium is larger, but your risk is greater also in that the underlying equity might keep on tanking. So in other words, if you were to calculate ROI on Jan '16 $23 Puts, with $3.35 premium, and option expires worthless, your ROI is only 18%. Now contrast this with May '15 $23 Puts, with "only" $1.32 premium, and option expires worthless, your ROI is a cool 39%. The reason for this is that market prices the immediate risk more expensively than later risk. (Futures traders know that very well)

    2. You claim above that you rolled your options at even a higher premium and with bigger position is fine but you forgot to mention to audience that you had to buy back your "original" position ALSO at a significant premium. Now depending on the size of your new position and how far you went into the future, you might have got yourself a nice credit but you have also prolonged your risk duration for getting that credit.

    I am sure you have done the right thing for yourself (or your clients I hope) but you should have given reader a better picture of rolling options and how that might not always be a clever strategy. By rolling, you are just kicking the can down the road with potentially even worse nightmare on the horizon (if stock keeps tanking). Also if you are not going too deep ITM or not going farther into the future in rolling options, you might be creating a scenario where your cost basis might be not lowered (but instead increased) once you finally get that option assigned (unless you close the position at a loss).
    Mar 23, 2015. 03:39 PM | 3 Likes Like |Link to Comment
  • Understanding Fluctuations In The High Yield Bond Market And The Impact On The S&P [View article]
    One explanation of your core thesis might be that once bond yields start rising, investors look for higher yields in the stock market as well thus longing for higher E/P, hence driving the P/E ratios down; which in turn brings the stock market down.

    Warren Buffett has famously mentioned that rising interest rates acts as "Gravity" on the stock prices, which is an extremely insightful observation from a man who has seen it all during all economical cycles.
    Mar 22, 2015. 05:58 PM | Likes Like |Link to Comment
  • Crude Oil: Why A 'Storage Crisis' Might Not Be So Bad After All [View article]
    Casey, OXY / COP, Choose one?
    Mar 22, 2015. 09:42 AM | Likes Like |Link to Comment
  • Wheelock & Co.: A Very Cheap Stub [View article]
    This was Marty Whitman's favorite pick a couple of years ago. Don't know if he still holds this position.
    Mar 21, 2015. 02:10 PM | 1 Like Like |Link to Comment
  • 5 Important Reasons To Avoid Canadian Oil Sands Now, Perhaps Forever [View article]
    Fincom,

    This is interesting but When I read this article the first time, your point #3 above kinda stuck in my mind at the time. Today I came back to this article re-read it again. I made sense to me then, more importantly it allowed me to stay away from oil stocks to this day. But maybe, the time has arrived to get my feet wet (or oily I should say).

    What do you think?
    Mar 17, 2015. 04:23 PM | Likes Like |Link to Comment
  • Lower For Longer: A New Normal For U.S. Natural Gas Prices [View article]
    "Our work indicates a range of break-even prices for the areas most likely to be drilled up over the next several years of approximately $0-$4/mcf."

    Can authors provide more color on how break even can be $0?
    Mar 15, 2015. 03:12 PM | Likes Like |Link to Comment
  • Penn West - Lenders Drive A Hard Bargain [View article]
    Isnt' it true that China is a big Shareholder of PWE?
    Mar 13, 2015. 04:51 PM | 1 Like Like |Link to Comment
  • Sandridge Energy Preferred Convertible: A 17.2% Yield With The Potential For A 60% Capital Gain [View article]
    Richard, This is a perpetual issue, but is it true per prospectus that should SD redeems this preferred, it must pay up 130% of par?
    Mar 3, 2015. 08:39 PM | Likes Like |Link to Comment
  • Sandridge Energy Preferred Convertible: A 17.2% Yield With The Potential For A 60% Capital Gain [View article]
    Tack, Your Put/Call strategy looks fantastic ABSENT company going bankrupt.
    Mar 3, 2015. 08:24 PM | Likes Like |Link to Comment
  • Fastenal: A Company With A Large Moat In A Fragmented Industry [View article]
    Bryan, for an undergrad, this is a better research note than what is regularly shoved on my desk from analysts of most reputed Equity Research houses. Keep it up.
    Mar 3, 2015. 07:12 PM | 6 Likes Like |Link to Comment
  • EXCO Resources: Weathering The Storm [View article]
    The only reason I would invest in this issue is that the amount of smart money in this is hard to ignore. Otherwise there are far better investments out there in the energy carnage, e.g. COG, RRC, EQT
    Feb 28, 2015. 09:29 PM | Likes Like |Link to Comment
  • Down ~75%, CARBO Ceramics Is Too Attractive To Pass Up [View article]
    Quick,

    The company does NOT have ZERO debt but zero "Net debt" since its debt is offset by cash on hand if push comes to shove.

    By the way companies indeed go bankrupt even without having any debt, if your product does not sell and your operating expenses are not cut appropriately. This does not mean to say CRR will go bankrupt but you need to have the right reasons to like a company.
    Feb 25, 2015. 11:37 AM | 2 Likes Like |Link to Comment
  • Update: Petroamerica Refreshes Capex And Production Targets [View article]
    I have been reading about this company for a while now, especially since Value Digger wrote about it, but what I am unable to grasp up to this day is why it has always traded at a discount to its peers. I am not talking after oil collapse, it was even trading at a discount when everything was hunky dory. Any thoughts on why this issue always trades at a discount to its peers?
    Feb 15, 2015. 10:59 AM | Likes Like |Link to Comment
COMMENTS STATS
230 Comments
212 Likes