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Expat in Tokyo

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  • The Unstated Case For Long-Term Low Oil Prices (Part I) [View article]
    Good Article!

    I worked in the oil patch in college in the late 70's until 81. One well in Evanston Wyoming was a directional well that did a dog leg to get under the Catholic cemetery. Yes, we did directional drilling in 1980 - what is the big deal!

    It was some old iron - compound triples - I worked on with very little electronics and sensors - kinda the opposite of today. Especially for a college boy getting a electrical engineering degree.

    This transformation of the tools from mechanical to electronic/sensor for O&G extraction provides more accurate data make the industry more precise in its' decisions - thus reducing the the cost of the extraction. I agree engineers in the industry will develop the tools as the demand requires! Always have and always will - that is why America leads the world in O&G technologies. This technical capability cannot be underestimated and is a tremendous advantage to American oil companies to continue to drive the marginal cost of O&G extraction lower.

    Looking forward to the remaining articles.

    Dec 5, 2014. 11:45 AM | 1 Like Like |Link to Comment
  • How Defense Cutbacks Hurt The Housing Market [View article]
    You are an clearly uniformed with comments like these. You are trying to blame the military for our politicians errors.
    Oct 28, 2014. 12:17 PM | Likes Like |Link to Comment
  • Drowning In Oil Again [View article]
    SA government needing over $100 a barrel to be solvent! Rubbish! Average shale oil all-in cost to produce - $60-$80. Once oil drops below cost to produce less drilling and less oil results in higher prices. Then more drilling again. This happens every time! I expect significant consolidation in smaller E&Ps if oil stays below $80 for even a quarter or 2!

    The investors issue is always the same what companies will remain standing and make us money!


    Oct 15, 2014. 12:44 PM | Likes Like |Link to Comment
  • Could The 'Shale Oil Miracle' Be Just A Pipe Dream? [View article]
    A couple of missed points in this article.

    1) You forget the benefits of new technology to improve the recovery of more oilper well than the averages today. 2) E&Ps leave and comeback to oil patches because they see better IRRs in other oil patches not because they are not making money in one they sell their leases on. 3) If shale oil proves unprofitable at $65 less oil will be produced and prices will increase making them profitable again.

    The best part of you argument would have been that there is always boom & bust in the oil patch. Many small E&Ps have over leveraged and can only survive with a high oil price. This has always been true in the oil patch and this shale boom is no different - if you do not believe their is a boom go to Williston, ND for a visit. If oil stays at or below $75 per barrel you will see significant consolidation of smaller E&Ps just to survive. But will the overall shale oil be a negative IRR as you have postulated - no way! Oil is finite resource and the price will recover.

    Yes, some smaller E&Ps are over leveraged and will get hurt with lower oil prices, but the shale oil boom is real. The issue for us investors is to pick the right companies that can be profitable.


    Oct 15, 2014. 12:21 PM | 6 Likes Like |Link to Comment
  • Falling Oil Price And Energy Stocks [View article]
    Don't under estimate the new methods and technologies in the oil patch. The shale oil patch is much like solar ever year cost of production in know reservoirs gets better. No one is standing around doing it like we did when I was a roughneck in college!

    Yes, high cost of production E&Ps will suffer as oil drops and may go out of business. But most will still be pumping shale oil out 10 years from now. The shale oil and gas boom is real and yes it will slow down because it is a finite resource, but it will be years from now. Our peak shale oil and gas production might be beyond 2020. Some producers like range resources and COG produce gas for under $2 per thousand cubic feet! And this is what is hurting coal not solar power plants.

    I think we need heterogeneous energy supplies. There is room for all types and I look forward to a world of cheap renewals for my great grandchildren!
    Oct 13, 2014. 11:13 AM | 2 Likes Like |Link to Comment
  • Sell Now, Ask Later Provides Opportunity For Sand MLPs [View article]

    you let the secret out of the bag! I am still buying! Even if the marginal E&Ps have to stop drilling the sand use growth will only drop for exponential to very high!

    If you are in the oil patch these are no brainers. I own both and over the long run (from an oil patch perspective) 5 years - I like EMES the best because of the lack of a IDRs because they own their GP.


    Oct 13, 2014. 10:52 AM | Likes Like |Link to Comment
  • Why I Am Becoming A Passive Investor [View article]

    the same thoughts have been going through my head the last 18 months since I retired. I like picking stocks, but I know down deep that through most full market cycles passive investing will likely beat my returns.

    Thanks for your insight!

    Sep 23, 2014. 03:58 PM | 1 Like Like |Link to Comment
  • A Closer Look At Boardwalk Pipeline Partners' Q2'14 Distributable Cash Flow [View article]

    EPD just split, the yield you show in the table is half - isn't it?


    Aug 28, 2014. 12:31 PM | Likes Like |Link to Comment
  • TheĀ Interest Rate Conundrum: Flight To Quality Or U.S. Slowdown? [View article]
    Are the charts off? Take a look at the present chart. It shows Dec 2014!

    Is the scale off? Please explain?


    Aug 13, 2014. 10:02 AM | Likes Like |Link to Comment
  • What's The Future Of Housing? [View article]

    agree with your general thesis. I like your charts they tell the truth that the boomer bulge out was a one time event and that the millennials are a little bigger - so there will not be a bog drop off when we boomers die off.

    I just don't see us boomers staying put. I think that we will move and buy houses where we want to live. Even lower middle class boomers can afford to rent in the sunshine states.

    I also think that we boomers will not transfer as much wealth as some have postulated because we will spend it! At least that is my plan!


    Jul 18, 2014. 12:54 PM | Likes Like |Link to Comment
  • Aflac: A Solid Company Being Held Back By Its Exposure To Japan [View article]

    Here are my answers to your questions.

    1 - Yes, Japan will attempt to inflate away there 250% debt to GDP.

    2 - Today's Japan federal budget is around 45% - I think - to debt payments with rising social expenses for their aging society - unlikely to cut spending significantly after Abe's massive spending ends.

    3- Once they start to sell US bonds the Yen will start to decrease relative to the dollar - Yen depreciation will begin.

    4 - Japan will not cut back on their social contracts they will just print Yen. Remember inside Japan it won't be as bad as it is for companies like AFL that need to convert from Yen to dollars. I do not see how cutting back on end of life care helps AFLs business.

    2nd paragraph - 100% debt to GDP in US versus 250% debt to GDP in Japan. No modern country has ever been indebted as much as Japan and had a good outcome! No precedence to argue they can have a soft debt landing. Their 10 JGB is under 1% what happens when it goes to 1.2% or even 1.5% - over half the budget will be to just pay interest on debt!!

    Third paragraph - there is no "not painful" solution. Even the one you pointed to is very very painful and will include Yen depreciation. The solution you pointed out will cause a severe recession and AFL profits will be hurt. I believe the least painful way for Japan is to depreciate the Yen and it will hurt AFLs profits.



    I argued for Yen depreciation in the next crisis and not default.
    Jul 14, 2014. 11:02 PM | Likes Like |Link to Comment
  • Utilities And Rising Interest Rates: Fact Or Fiction? [View article]
    Very good article! I love challenging conventional wisdom articles!

    Long WR

    Jul 14, 2014. 10:39 PM | 2 Likes Like |Link to Comment
  • Beloved Aflac Co-founder Paul S. Amos Passes Away [View article]

    My hat is off to a great American businessman! We need more entrepreneurs like Mr. Paul and his brothers.

    AFL liabilities are in Yen for their policies in Japan. Japan requires insurance companies to maintain adequate reserves in conservative investments - not stocks! Just like the US states do.

    AFL has some wiggle room on what Yen denominated products they purchase - but not much - and AFL needs to match reserves with liabilities. I do not think they have many options besides JGB. They re not refocusing on JGBs they are aligning liabilities and reserves.


    Jul 4, 2014. 08:28 PM | Likes Like |Link to Comment
  • Aflac: A Solid Company Being Held Back By Its Exposure To Japan [View article]

    I do not think AFK will fail - never said that. Only that their 75% of profit from Japan will shrink along with the stock price, dividends and buy backs.

    If the Yen depreciation happens 10 years from now, perhaps AFL will have diversified their customer base and the impact will be muted.

    AFL has their liabilities in Japan covered with Yen bonds, so if the Yen depreciates so will their liabilities (coverages). AFL is required by Japanese law to maintain reserves in Yen in Japan. Just like US insurance companies are here in the US.

    AFL knows all this and I am sure they are planning on how to handle a lot of different scenarios. That doesn't mean the profits and stock prices won't get hit.


    Jul 3, 2014. 09:53 PM | 1 Like Like |Link to Comment
  • Clayton Williams: Momentum Continues [View article]

    George Mitchell and Clayton Williams - two truly great American business heroes!

    Leaders like these guys are under appreciated by our political class in Washington.

    We could use a lot more today!

    Jul 3, 2014. 08:05 PM | 8 Likes Like |Link to Comment