motherbird

Loss of Clarity on Chesapeake's Peak

As of Fridays close, the S&P 500 market cap weightings of energy and financials were 14.45% and 14.84% respectively.

November of 1980 was the all-time high of energy with a weighting of 29.24% of the S&P 500. Its interesting to note that that same month and year saw the all time low for financials with a weighting of 4.49% of the S&P 500. Their weightings moved in the opposite directions over the next 23-25 years with energy bottoming at 5.31% in 2003 and financials topping at roughly 25% in 2005. Thier weightings move opposite each other over 20 something year cycles and reach extremes at the turn of those cycles.

It appears to me there is much market cap yet to be destroyed in financials. Likewise energy's market cap weighting would have to double from here before it reaches its historical extremes.

Raising Chesapeake Energy's Intrinsic Value Estimates

Aubrey McLendon is buying up Cheasapeake stock faster than the company can secure leases. He knows the value of all the leases Cheasapeake has secured. He knows that Exxon, Conoco-Phillips, Devon, etc knows the value of them as well. Maybe, just maybe, the big boys will decide they just gotta have those assets. Can you imagine the bidding war that will ensue once someone makes a play for Cheasapeake? Im betting Aubrey will be adding to his stake in the very near future, -- substantially adding!