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Tom Armistead  

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  • California Resources: Why I'm Still Long [View article]
    I've been looking at Brent futures. If you give them any credibility, the price is headed up to an area where CRC will be worth more than it is today.

    Oil being somewhat volatile, it's difficult to believe it will just ease higher over a period of years. More likely it spikes at some point.
    Jul 16, 2015. 01:15 PM | 1 Like Like |Link to Comment
  • California Resources: Why I'm Still Long [View article]

    Well you have added to what I know about the BlueMountain report. At least they offer some reasoning apart from the material we're all familiar with.

    But CRC has been saying they're a net producer of water and they earn points of merit by that fact. It's far better than consuming water and being shut off.
    Jul 16, 2015. 01:11 PM | 2 Likes Like |Link to Comment
  • California Resources: Why I'm Still Long [View article]

    It's a global market. The oil that CRC sells is priced off of Brent, because CA imports oil by sea.

    I personally would resist the urge to develop too much anxiety over supply from Iran. The country is not well run, and is very difficult to do business with.

    Long term, the countries with big oil supplies have developed the habit of balancing their budgets by means of oil earnings. With that source cut in half, they will eventually do the logical thing in view of the limited elasticity of oil demand.

    I wouldn't start to grieve over the demise of the shale oil industry just yet.
    Jul 16, 2015. 10:44 AM | 3 Likes Like |Link to Comment
  • California Resources: Why I'm Still Long [View article]
    I'm not a big debt fan either, but I took a chance when this got really low and bought quite a bit near the last bottom. They have since received waivers good to the end of 2016, which gives them time for oil to hopefully recover and to de-lever, if it can be done on economic terms.

    Volatility is part of the attraction here, at least for me, because I can be a net seller of time value using options, which tends to decrease my b/e over time.

    Logically, this is driven by the equilibrium price of oil which is fairly distant in time, and the day to day fluctuations are meaningless noise. I've been checking CNBC daily, and every day they have an explanation for the move in the price of oil, first it's the overhang of Iranian supply, then it's the time lag before Iran can increase production, then it's an inventory build, then it's a drawdown, the perils of Pauline on a daily basis.

    My thinking is, I'm being paid to watch.
    Jul 16, 2015. 08:57 AM | 2 Likes Like |Link to Comment
  • CARBO Ceramics - Why More Downside Cannot Be Ruled Out [View article]
    The mining of frack sand degrades the environment. It's done by open pit methods, uses massive quantities of water, and involves the use of hazardous chemicals. Wisconsin accounts for much of this activity.

    This 10% growth ad infinitum is going to run into problems with environmentalists. I Googled frack sand and one of the first articles I hit was an environmentalist tract about the damage in Wisconsin.

    Like everything else to do with fracking, it's full speed ahead, with no concern for long term consequences. It will be self-limiting.
    Jul 15, 2015. 12:06 PM | 1 Like Like |Link to Comment
  • The Restaurant Business Is Too Competitive: Buy The Supplier Instead [View article]
    I agree with SteveTheHawk, and sold out at the end of 2013, on the spike up to $42.

    Earnings have declined in spite of the revenue increase. Margins are deteriorating.

    Using 5 year average EPS, $1.70 x 15 = $26, as a buy point.

    Management is out of ideas. They hung their hat on the plan to buy US Foods, which fell through for lack of regulatory approval. So now the best they can come up with is buybacks. Noting that the current ratio is less than 2 and capex runs about the same as depreciation, there is no excess capital to return to shareholders.
    Jul 15, 2015. 09:34 AM | 4 Likes Like |Link to Comment
  • Why Total Return Is Like Trying To Add Apples And Bananas [View article]
    It's not yours until you spend it.
    Jul 10, 2015. 07:35 AM | 5 Likes Like |Link to Comment
  • Why Total Return Is Like Trying To Add Apples And Bananas [View article]
    Money is fungible. Ask John Corzine, he'll tell you. Dividends or capital gains, pay your taxes and what's left spends just the same.
    Jul 10, 2015. 05:40 AM | 16 Likes Like |Link to Comment
  • So, You'll Switch To Dividend Growth Investing After You Have Your Millions, Eh? [View article]
    It's part of the normal process of aging and developing as an investor to move into more secure and better performing stocks over time.

    My wife and I have the bulk of our investments in the Vanguard S&P 500 index. I still keep a discretionary account, applying leverage with options, and a small portion of that is in speculative situations.

    There is no need to make a sudden switch of style. That is likely to work poorly, for timing considerations as well as adjusting to whatever the new one is.
    Jul 8, 2015. 08:43 AM | 7 Likes Like |Link to Comment
  • Replacing Chubb With Ace [View instapost]
    Thanks. As you know I've been concerned that editorial policy accentuating short-term success and even the ability to move a stock is leading investors down the road, and away from DGI and other methods of reliably accumulating wealth for retirement.

    I was hopeful that Seeking Alpha would become what it originally set out to be, a place where amateurs and professionals could exchange ideas and expose their thinking to criticism and comment. We would all be better investors, so on and so forth.

    I'm a little shocked at what some of the authors are charging for their pro material.
    Jul 7, 2015. 04:06 PM | 3 Likes Like |Link to Comment
  • Replacing Chubb With Ace [View instapost]
    PS I forgot to mention Aflac. Their niche in supplemental and dread disease is profitable, the brand is well regarded, and they brought in a very strong team of professionals to run the investment side of it.

    The market doesn't like it that profits are earned in yen and then converted to dollars. A lot of the investments are being denominated in dollars, and the yen should eventually gain back some of the lost ground.
    Jul 7, 2015. 02:37 PM | 1 Like Like |Link to Comment
  • Replacing Chubb With Ace [View instapost]
    Enjoy your hike. I got my back out of joint somehow, working to clean up the roof and yard after we had a microburst, so I'm taking it easy hoping it will get better with rest.

    The merger doesn't seem like it would have much integration risk and at least the way I did the math the whole will work out to be bigger than the sum of the parts, for shareholders anyway.

    The analyst at KBW came out with a number around $141 for CB, not that he's looking for another company to up the bid, but because he thinks the investor is getting ACE at a discount.
    Jul 7, 2015. 02:17 PM | 1 Like Like |Link to Comment
  • Replacing Chubb With Ace [View instapost]
    Long TRV and also MET. The MET is a vertical call spread, both legs in the money, functions like selling a put. I would like to own some MET but at a lower entry point.

    I don't like Life nearly as much as P&C.
    Jul 7, 2015. 02:11 PM | 1 Like Like |Link to Comment
  • Crude Oil Could Easily Go To $35 A Barrel [View article]
    The last time I heard the call for $35 oil it came from the illustrious Dennis Gartman, ringing the bell at the bottom.
    Jul 7, 2015. 11:39 AM | 4 Likes Like |Link to Comment
  • Replacing Chubb With Ace [View instapost]
    You're welcome. I bought some ACE calls at 80, the LEAPS aren't available so I took the most distant expiration. I also sold the same number of calls at $115, the premium received offset the time cost of the long position so it's a low cost trade, levered 5:1 in the price range I'm interested in.
    Jul 7, 2015. 11:07 AM | 1 Like Like |Link to Comment