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  • I Disagree With Projections Of A Decade Of $20/Barrel Oil [View article]
    I wouldn't rely on rig count as a reliable indicator for drilling activity and production in natural gas. In the last few years, drilling has become much more efficient. So even though rig counts have dropped, much of the drop might be attributed to increased drilling efficiency, as opposed to decreased production activity.

    It's too late on Christmas Eve for me to look for any sources to back this argument, but I work in this industry (selling equipment for completed natural gas wells), and until about 18 months ago, we used rig count as a leading indicator of orders, but then this became an unreliable metric.

    By the way, we had one of our best years ever in 2014, if that tells you anything.
    Dec 24, 2014. 10:53 PM | 1 Like Like |Link to Comment
  • I Disagree With Projections Of A Decade Of $20/Barrel Oil [View article]
    Good information, look forward to more of your thoughts.

    When will we learn?

    In the late 90s it was 'Tech stocks will never go down, the stock market will rise forever!'

    In the early 2000s it was 'Tech stocks crashed, the stock market will never go up again!'

    In the mid 2000s it was 'House prices will never go down, the real estate market will rise forever!'

    In 2009 it was 'House prices have collapsed, the real estate market will never go up again!'

    Since 2010 it 'Oil prices will never go down, get used to $ 100+ oil forever!'

    And now it is 'Oil prices have collapsed, get used to $ 20 oil forever!'

    Anyone that is making any specific long term predictions about the global economy, especially about the oil sector, is doing nothing but guessing.
    Dec 24, 2014. 01:23 PM | 11 Likes Like |Link to Comment
  • El Pollo Loco: PE 'Bust-Out', 20+ Years Of Failed Domestic Expansion, Pre-IPO Window Dressing Make An Ideal Short [View article]
    With LOCO at $ 22.28 today (11 Dec 2014), would you say your analysis back in August was correct?
    Dec 11, 2014. 08:51 PM | Likes Like |Link to Comment
  • More Profitable Than Exxon And Apple [View article]

    When is the last time there was a significant decrease in the money supply?

    Where is all of this money going, if it is not showing up in consumer price and/or wage inflation?
    Aug 24, 2014. 10:25 PM | Likes Like |Link to Comment
  • 8 Reasons Why A New Global Financial Crisis Could Be On The Way [View article]
    Fripp, do you think living at the poverty line would be any easier if the top 1% only had 98% of the wealth, or 97% or 90%? Are the poor any less poor?

    Having traveled to some really poor parts of the world, I'd rather be poor here than there. And, I did read the article in the Economist you mentioned. If you read it carefully, there is a big cultural component to this. Throwing money (and plumbing) at the problem alone isn't solving it. There is a big push to educate the people and to get them to accept this change.

    And nowhere was I championing any policy at all to push us back to mass poverty.

    Also, I didn't know I belonged to an ilk.

    Finally, great job of rescuing the mangled metaphor and making it work!
    Aug 24, 2014. 01:01 PM | 2 Likes Like |Link to Comment
  • 8 Reasons Why A New Global Financial Crisis Could Be On The Way [View article]
    I have a problem with this sentence:

    "If the corporate sector were to unload such massive financial resources (as is their moral obligation) on to society, they would create hyperinflation and hence financial crisis."

    Who says it is the corporate sector's moral obligation to "unload (their) massive financial resources..."?

    As far as I am concerned, if a corporation fulfills its contractual obligations to its suppliers, customers, employees and shareholders and is not breaking the law, then it has upheld any "moral obligation" that it has.
    Aug 24, 2014. 12:32 AM | 1 Like Like |Link to Comment
  • 8 Reasons Why A New Global Financial Crisis Could Be On The Way [View article]
    Income inequality doesn't matter - the very concept implies that wealth is a zero sum game - it is not. When people complain about 1% of the people controlling 99% of the wealth, to me it makes them sound envious.

    Income inequality doesn't matter - people at the poverty line in this country ($ 23,500 a year) are wealthier than 89.61% of the people in the world (see this handy dandy website - Stop complaining about how there are people making more money than you. That's going to happen, get over it.

    Regarding the "Cash crisis". To me, this is the one we need to solve to avoid another 2008. It seems like forever that we have had "too much money out there." (I have been suspicious of this since the early 90s, after the regional real estate collapses in California and the Northeast).

    For years we have been believing the myth that there is no inflation, because consumer prices are stable. However, in my working lifetime, I have witnessed five asset bubbles (stock market in the late 80s, real estate late 80s early 90s, stock market late 90s, real estate 1999 - 2008, stock market 2010 - now). These asset bubbles are just another form of inflation (asset inflation, as opposed to price inflation).

    In my opinion, one of the drivers in current rise in the stock market is the cheap and easy credit available to help us out of the last financial crisis. Cheap credit is making it easy for businesses to pay down their debt and buy back their stock. Banks can get all the money they want. The combination of improved balance sheets, fewer shares, and an unlimited supply of investment funds are fueling the increases in the stock market.

    Things are going to get over-extended, the stock market is going to correct, and the result will be - you guessed it - even cheaper and easier credit to ease us out of the next financial crisis; but this time, it will find it's way back into the mortgage market, just in time for another cycle of boom and bust in real estate. This is how you get $ 900 trillion in financial assets chasing $ 90 trillion in economic production.

    In my opinion, in the absence of some kind of hard currency central banks need to monitor all aspects of inflation (including asset inflation) and control the money supply as required (note, I don't believe we should return to the gold standard, I just think central banks should focus on inflation, and they should not have a dual mandate of "reasonable" inflation and "optimal" unemployment.)

    I don't know this for a fact (and I am too tired to look it up, but I am sure someone will be able to tell me that I am wrong), but my guess is that the money supply in this country has never been significantly decreased as long as I have been working (early 80s), even though we have seen all of these asset bubbles expand and pop.
    Aug 23, 2014. 11:44 PM | 12 Likes Like |Link to Comment
  • El Pollo Loco: PE 'Bust-Out', 20+ Years Of Failed Domestic Expansion, Pre-IPO Window Dressing Make An Ideal Short [View article]
    Excellent article.

    I haven't been planning on investing in LOCO, but the stock caught my eye and I've been following it, because like a lot of other folks here, I used to like their chicken when I lived in the South Bay.

    However, for some reason, all I can think of is the rise and fall of Boston Chicken (now reincarnated as Boston Market) - IPO in November 1993, filed Chapter 11 in October 1999.

    I am pretty sure the details between the two companies are different. I seem to remember that Boston Chicken was mostly franchises, and there was a plan for a huge number of new stores, but it wasn't a viable plan.

    But, ever since then, whenever I hear that I can get rich investing in a chicken restaurant, I hold onto my wallet.
    Aug 22, 2014. 12:33 AM | 1 Like Like |Link to Comment
  • Don't Talk About Wages And Incomes [View article]
    Actually, I never said whether I was pro-immigration or not (it just so happens I am, and there are good economic and market reasons for it, but that is for another time.)

    My only point was that there are two ways to stop the graying of the U.S. One way is to convince women to start having more babies (above the replacement rate - good luck with that!) or to allow more immigration of kids and young people. If anyone can think of another way (short of a 'Soylent Green' kind of solution), I'd love to hear it.
    Aug 21, 2014. 09:10 AM | Likes Like |Link to Comment
  • Don't Talk About Wages And Incomes [View article]
    Macro - I am not sure I follow your logic. Allowing more immigration of kids and young people (from all over the world) would help stop the graying of the United States.

    From the Center For Disease Control report 'Births: Preliminary Data for 2013' (PDF here - ):

    * The 2013 preliminary total fertility rate (TFR) for the United States for
    the United States was 1,869.5 births per 1,000 women, 1% below the
    rate in 2012 (1,880.5) and the lowest rate since 1986 (2). The rate has
    declined steadily since 2007, the recent high, by more than 2% per
    year. The TFR estimates the number of births that a hypothetical group
    of 1,000 women would have over their lifetimes, based on the age-
    specific birth rates in a given year.

    * In 2013, the TFR was below replacement, the level (2,100 births per
    1,000 women) at which a given generation can exactly replace itself. The
    rate has not been above replacement since 2007 (2).

    So, without immigration of kids and young people, our population would be graying a lot faster than it is now.
    Aug 20, 2014. 11:47 PM | 2 Likes Like |Link to Comment
  • Don't Talk About Wages And Incomes [View article]
    If you really want to get depressed, read 'The Children of Men' by P.D. James (or watch the 2006 movie based on the book).

    What do we do when population growth slows, or even declines? How does this affect every facet of our lives (not just investments)?

    Most people my age (50-ish) were raised to believe that the biggest problem facing the world was over population.

    Now, according to this 2011 UN report ( (I couldn't find a more recent update to this) there is a scenario that may be even more frightening (at least for a few generations) - a global population that peaks in 2050 and then declines from there.

    I think we are going to end up with a lot of pampered pets.
    Aug 20, 2014. 08:01 PM | 3 Likes Like |Link to Comment
  • Margin Debt Peaks May Indicate End Of Cyclical Bull Market [View article]
    Mr. Chawla - thank you for the article. I don't know enough about this subject to make a contribution to the discussion, but just by reading this article (and yes, the comments) I feel I have learned something.

    And Mr. Duval - I do not want to get into an argument, but I respectfully disagree that commenting on an an article contributes 'very little to nothing to an academic discussion...'. Certainly, it would be great if everyone could take the time to write an article; however, that isn't possible. But surely, there is a benefit to the audience and the author both when they can get immediate feedback on an article, even if some of the arguments are not fully developed.

    For instance, just by reading this article and comments, I have come to understand that there may or may not be an historical correlation between margin debt and the performance of the S&P 500. Whether this relationship exists and whether there is a causal relationship or not, we don't know. But, the thesis and the comments raise several interesting question, including:

    What is the affect of interest rates on any relationship between margin
    debt and S&P 500 performance?

    Is the absolute scale (as opposed to percentage change) of margin debt
    relevant or not?

    I gained all of this insight tonight, in just a matter of minutes, due to the contribution of the author and the people commenting.

    I don't have the statistical chops to go and find the answers to any of these questions myself, but at least I know that there are other sides to the argument presented by the author, and I didn't have to wait a couple of days or more to gain that knowledge.

    I think being able to see immediate arguments of uneven quality in the form of comments that I am almost certain to see is better than waiting for high quality arguments in the form of an article that I might never see.

    In my opinion, this is one of the true strengths of SA.
    Aug 19, 2014. 11:47 PM | 11 Likes Like |Link to Comment
  • A Tale Of Two Knives -- Falling [View article]
    Interesting article. My favorite part of the piece is this line - "If you're that much of a sissy, why don't you just buy an annuity?" I think this is the best sentence I have ever read on Seeking Alpha.
    Aug 15, 2014. 10:20 PM | 3 Likes Like |Link to Comment
  • Inversion Deals Are Costing The U.S. [View article]
    More to follow later, but the US government stands to lose ~ $ 19.46 billion over a decade, this is $1.946 billion per year. Considering the federal budget for 2014 is $ 3.77 trillion dollars, this represents 0.05 % of the budget. To put this in perspective, the federal government spends ~ $ 430.4 million per hour. So, if we eliminate tax inversions, this allows the government an extra 4.5 hours of spending per year.

    This is a silly, political argument, and nothing more. What is needed is fundamental tax reform to bring our tax policies in line with the rest of the G7, and stop demonizing and threatening companies that are doing nothing illegal and are doing the right thing for their shareholders.
    Aug 11, 2014. 09:22 AM | 11 Likes Like |Link to Comment
  • Update: Rite Aid - Positive Direction Continues [View article]
    I bought RAD at $ 1.30, and continue to hold it, and plan on holding it for the foreseeable future. I have a few questions, though:

    1. How does the sales growth of Rite Aid compare to over all segment growth?

    2. Is Rite Aid taking any market share from Walgreen's or CVS, or is it case of a rising tide raising all boats?

    3. Is Rite Aid in a better or worse position than Walgreen's or CVS if segment growth slows?

    One of the reasons I looked at Rite Aid in the first place was because I was seeing Walgreen's and CVS building a lot of new stores in New England, and it seemed to me they were going to saturate the market, and start cannibalizing their own sales. As I started looking at both companies, Rite Aid caught my eye as an interesting turn-around story.

    But, I still don't know the answer to the question of which company is in the best shape when growth slows (or stops).
    Aug 2, 2014. 11:29 AM | 4 Likes Like |Link to Comment