Seeking Alpha

sinedo

sinedo
Send Message
View as an RSS Feed
View sinedo's Comments BY TICKER:
Latest  |  Highest rated
  • Linn Energy (-14.5%), LinnCo (-12.9%) piling on second day of losses [View news story]
    Biotechs and me go back a long way, and I guarantee they are more risky to capital than mining, and certainly more than Oil E&P's, which have a strong, if cyclical, market. All burn cash, but Biotechs have the increased burden of Government regulation by the FDA, which is run by the big Drug Companies. When corruption and politics enter the equation, risk increases dramatically.
    Keep that in mind, Dave.
    Regards,
    Aug 1, 2015. 01:04 PM | Likes Like |Link to Comment
  • Linn Energy (-14.5%), LinnCo (-12.9%) piling on second day of losses [View news story]
    All Oil producers are beaten-up, incl. the established Blue Chips. The big ones have a lot of staying power and credit worthiness. Newer companies have to use leverage to grow, and it's all about timing. There's risk in every business and Linn (and everybody) was not seeing this kind of slump as a reasonable business expectation. They were able to do well for a while and made good acquisitions, and sales, just before "the fit hit the shan".
    The bet on Linn is still a bet on the price of Oil.
    Accusations that they are close to BK are meant to scare, for whatever reason.
    As long as they can pay interest on their Bank debt, they're OK. They can stop paying interest on their corporate debt, defer or postpone it, according to the terms of the notes. Even if it's unmentioned in the loan, they can't be forced into BK for that reason. The Banks don't want to force BK, if they can help it, and will continue to lend to keep them alive using anything of value as collateral, as long as it depends on an Oil recovery.
    Oil is a necessity of life, like food, like it or not. If the price of anything gets too low, production goes down until scarcity brings the price back to where it becomes profitable to produce. Usually, the corrections are extreme: too low to too high.
    That is the normal cycle for anything economically necessary.
    BK is not likely, even without a recovery; what is likely is a takeover by a big Oily, where assets are purchased at pennies on the dollar and Management gets paid-off to make it happen, threatening BK. If the real assets are mortgaged, no takeover makes sense. So...
    Been there, seen it too many times.
    Regards,
    Jul 31, 2015. 02:32 PM | 5 Likes Like |Link to Comment
  • Linn Energy -17%, LinnCo -22% after suspending distributions [View news story]
    "... I tried to imagine what was going on inside the heads of the debt holders,.."
    Bonds are bought and sold in a big market, and if there are more sellers than buyers, the same thing happens as to stocks. Often, money is parked in bonds for short terms, so it's not uncommon for selling.
    Funds, too, have to follow their own rules, and when a bond is rated as "junk" A, B, etc., they often can't hold them in the Fund portfolios. I'm sure a lot of the bond trading is computer driven, the same as stocks.
    What Linn bonds look attractive? I haven't looked.
    Regards,
    Jul 31, 2015. 11:25 AM | Likes Like |Link to Comment
  • Linn Energy beats by $0.23 [View news story]
    To assume People make the market is naive. Computer programs ARE the market. They make most (90%?) of the short-term trades that are designed to force "trends" to manipulate big moves. Over time, People make the Market, but the shorts know better than anybody that People-buying and selling is not their Market.
    Regards,
    Jul 30, 2015. 12:36 PM | 1 Like Like |Link to Comment
  • Linn Energy beats by $0.23 [View news story]
    "...all buying back stock does is reduce shares outstanding,..."
    My guess is that there was not total agreement about issuing/selling the last tranche of stock, and buying it right back, at a profit, might have been something they considered; some might say "planned", but I doubt it.
    It reverses the unpopular dilution, and some could argue it might be wise to buy back more.
    Regards,
    Jul 30, 2015. 12:30 PM | Likes Like |Link to Comment
  • Linn Energy -17%, LinnCo -22% after suspending distributions [View news story]
    Most true "investors" determined it would be bad management to endanger the Company they manage by continuing to distribute dwindling cash to owners of the Company. We saw this coming. Reducing debt becomes necessary, at some point, when the Market goes against the business plan. Survival is the first consideration, so this unfortunate cut is prudent management. The Oil business is subject to unreasonable cycles that are steep and almost impossible to predict rationally. They call them "cycles" because they reverse, but humans react emotionally, and usually sell when they should be buying, and that is an opportunity for the wise investor.
    The demand for Oil will continue to grow, but big users can change their demands for different reasons that cause spikes and drops in periodic demand. Oil producers, as all businesses, have to evaluate risk and reward to make decisions. I thought Management felt the same as I, that this downtrend would reverse by now. We were wrong, and that happens in all businesses, but you have to keep adjusting to stay alive.
    If the Company is stronger, now, it's a Buy, IMO.
    Regards,
    Jul 30, 2015. 12:10 PM | 8 Likes Like |Link to Comment
  • Noble Corporation Could See 50%+ Upside Over The Next 12-18 Months [View article]
    The Saudi's have wised-up to Iran's bantering about "Death to the great and little Satan's", while moving into Sunni State territories and surrounding them. Their historical enemy has been the Shiite's and Iran, and that is how this World has behaved since about 640 AD.
    A nuclear arms race is now underway in the Middle East. Is a hot war inevitable? As long as there are ignorant "believers" on both sides, limited wars will continue, but the safety of the oil fields can only be guaranteed if there is an understanding between the combatants. War is the norm in that world, but they've never had the sophisticated weapons before. The oil fields will probably be the last targets attacked, and only when defeat is near for one. But, you never know.
    A further collapse in Oil won't happen, unless the U.S. wants it to happen, for some reason. It would be stupid and dangerously destabilizing to peace, but dumb is the norm with the current U.S. administration, IMO.
    Regards,
    Jul 28, 2015. 03:20 PM | 1 Like Like |Link to Comment
  • Noble Corp.: The Best Combination Of Safety And Future Reward [View article]
    I've owned NE since 1998 and '99. It has been one of my greatest investments, paying strong dividends and with splits, it has grown significantly. I remember when I bought; Oil was in a terrible recession, and everyone was worried and selling.
    I thought NE was the strongest in the group, in those days, and bought when it was hated. I, just today, bought a small position for my grandson, and I am bidding to add to my substantial position, now. At 12+% divvy, I really don't see anything I like better. I also feel they take care of their stockholders better than most.
    The only really big pools of oil left are under the oceans, so there will be strong demand for good, deep drillers for a long time.
    Regards,
    Jul 25, 2015. 11:04 AM | 7 Likes Like |Link to Comment
  • LinnCo, Atlas Resource Partners downgraded at Raymond James [View news story]
    I hope you go away, now. What an abysmal bore! Anybody who responds to you, I ignore.
    Jul 21, 2015. 01:01 PM | 2 Likes Like |Link to Comment
  • Linn Energy: Betting Against Cramer? A Bet That I Am Willing To Take, Here's Why [View article]
    Absolutely correct, but Cramer's words get a pop, as a rule. The author's reaction to those benign words make me wonder if he's serious, or just out to make a few nickels from the article. That is more the rule than not with this forum, but who takes any of these articles seriously?
    We read for the Comments, except for the shorts', which are reactive and a recognized waste of time, by now.
    Regards,
    Jul 19, 2015. 01:59 PM | Likes Like |Link to Comment
  • Linn Energy: Betting Against Cramer? A Bet That I Am Willing To Take, Here's Why [View article]
    As a long-time observer of Jim Cramer, I will guarantee that the "herd" does not follow his advice. As many think he is a contrary indicator as follow his "advice". This tells me the author is naive.
    Cramer can't stand to be wrong, and all his recommendations are about trading. Long term for him is one week. Why he mentioned Linn is a puzzle I won't bother tracking down. He made his move and is out; count on it.
    Regards,
    Jul 19, 2015. 01:48 PM | 1 Like Like |Link to Comment
  • Siren Song: Don't Be Lured To Linn Energy For Its Yield [View article]
    It's been a few years, the banking crisis and the liar-loan brokers shorted up to 300% of issued shares. No assets to sell and the shorted stock driven so low they couldn't raise capital with equity. It's not easy when the companies have valuable oil leases and equipment, where there is always a market.
    The SEC knew about it, and ignored the many complaints that were backed-up with hard evidence.
    In case you don't know, all Federal Agencies are "captured" by the industries they are supposed to regulate. Think of an exception, let me know.
    Regards,
    Jul 18, 2015. 11:31 PM | 1 Like Like |Link to Comment
  • Siren Song: Don't Be Lured To Linn Energy For Its Yield [View article]
    The short interest dropped significantly in mid June, but started up again at month end. I don't know where the shorts are getting the shares to borrow, but I have seen collusion before, where Brokers allowed short sales of imaginary shares, in the past. Usually, that has happened when BK was very likely. I don't see that in the cards for Linn, for a long time. Others will go first, but these are not gold miners. Economies need Oil, and I'm old enough to have seen this in the Oil Patch before. Oil is like Food; it's not something people can live without. There is no real "glut", just a slight over-supply and a lot of fear that always accompanies highly leveraged businesses and hard assets.
    It will pass, and hopefully Linn and other Oil finders will survive. Wiley and other shorts are losing more and more hard cash, paying the divs, and their paper profits could disappear almost over-night. Too greedy.
    Regards,
    Jul 18, 2015. 11:58 AM | 1 Like Like |Link to Comment
  • Siren Song: Don't Be Lured To Linn Energy For Its Yield [View article]
    This article is just another income source for a writer. If they can generate emotion, they get lots of clicks that produce nickels and dimes for the author that add up. I consider it OK; Linn is risky, but the market thinks even the best are risky because there are more sellers than buyers.
    Some with more current debt will fail, first. Linn should hang on, but if this Oil recession lasts long enough, they will all go broke and the Lenders don't want that.
    Regards,
    Jul 16, 2015. 01:33 PM | 4 Likes Like |Link to Comment
  • Siren Song: Don't Be Lured To Linn Energy For Its Yield [View article]
    Saudi Arabia needs cash, now, to buy nukes. They're not cheap, esp. if you want the delivery vehicles too.
    Regards,
    Jul 16, 2015. 01:25 PM | 4 Likes Like |Link to Comment
COMMENTS STATS
425 Comments
890 Likes