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Bryce_in_TX

Bryce_in_TX
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  • Fracking study blames poor well construction for tainted water [View news story]
    Updated info on earthquakes created by the disposal of well waste water, "Really":

    http://bit.ly/1t39L1d
    Oct 19 04:16 PM | Likes Like |Link to Comment
  • Cramer's Lightning Round - Ensco Is One Of The Worst Stocks I've Owned In My Life (10/17/14) [View article]
    If the DCF formula is worth anything, LINE is counting as growth cap ex the roll over of puts and other expenses on "old" reserves. That is, if they have 1,000 acres they have owned or have had rights to that acreage production for, say 3 years (as an example), any hedging costs on it are counted as "growth cap ex", rather than maintenance cap ex. As a result those costs are excluded from their calc of what is available for partnership distributions, effectively overstating DCF. That is what concerns me about LINE's management accounting. They've also ditched the traditional way of calculating DCF. They no longer use the terms "Adjusted Ebitda" and "maintenance cap ex".
    Oct 19 03:37 PM | Likes Like |Link to Comment
  • A Safer Alternative To Annaly Capital Management Common Stock [View article]
    Good point to consider for many, the Qualified tax status treatment of dividends. However it doesn't apply to me. My overall average tax rate is about 12.8%. 12.8%of 6.06% is .775%, making my total yield on CGF, with Qualified Tax Status, 6.835%. That's still 1 percent below what I earn with the Annaly preferred.

    However, your point is a good one for those in higher tax brackets.
    Oct 19 12:45 PM | 2 Likes Like |Link to Comment
  • A Safer Alternative To Annaly Capital Management Common Stock [View article]
    My actual yield is 7.8%.
    Oct 18 09:31 PM | Likes Like |Link to Comment
  • A Safer Alternative To Annaly Capital Management Common Stock [View article]
    If Annaly eventually redeems the preferred the stock price won't deflate. Why issue new preferreds at materially larger yields if rates are not going to rise that much over the next few years, at least until 2017? Doesn't make sense. Anytime I can get a 7% yield on a relatively safe investment, I consider it a good deal.
    Oct 18 09:28 PM | 1 Like Like |Link to Comment
  • A Safer Alternative To Annaly Capital Management Common Stock [View article]
    How is a 6.06% yield equivalent to my 7.625% yield on my NLY-C preferred?
    Oct 18 08:04 PM | 2 Likes Like |Link to Comment
  • Linn Energy exposed to deteriorating oil prices, analyst warns [View news story]
    I'd also read this article:

    http://seekingalpha.co...
    Oct 17 07:04 AM | Likes Like |Link to Comment
  • Linn Energy exposed to deteriorating oil prices, analyst warns [View news story]
    You seem to take a negative view of my explaining to Stubsixby that GAAP earnings are not important to Linn because revenues for an accounting period are not matched with the expenses of the same period, which generated those revenues, thus making the GAAP results distorted and wrong. What I said mirrors your comments on GAAP, yet you take my comments as wrong. Doesn't make any sense. I have to conclude you misinterpreted what I said.

    As far as LINE having a coverage ratio above one is debatable. LINE counts all expenses paid for hedges as "growth cap ex" in its calc of DCF, yet expenses paid for hedges which are rolled over to cover existing reserves, not newly acquired reserves, are clearly maintenance cap ex, rather than growth cap ex. Those rolled over hedges are for maintaining cash flow on reserves and production that may be 3 or more years since they were acquired. I don't see how you can defend that as newly acquired reserves and growth cap ex by any measure. That's my beef. Yet LINE counts the rolled over hedges as growth cap ex. I say their calc of DCF is inflated as a result. Earnings won't cover that, rather it will have to be covered by debt, equity issues, or asset sales.
    Oct 17 06:11 AM | Likes Like |Link to Comment
  • Linn Energy exposed to deteriorating oil prices, analyst warns [View news story]
    The reality is that a drop in oil prices may cause a GAAP revenue increase. However, because Linn does not "designate" their hedges as hedges for accounting purposes the loss in FMV of their reserves is not matched in the same period with the gains in their hedges. The result is volatility in their earnings and nonmatching of a period's revenues with the expenses that generated them. This causes the GAAP results to be materially distorted and "wrong".
    Oct 16 09:32 PM | Likes Like |Link to Comment
  • Linn Energy exposed to deteriorating oil prices, analyst warns [View news story]
    What is Linn's projected oil production for 2015?
    Oct 16 08:53 PM | Likes Like |Link to Comment
  • Linn Energy: Divestitures Do Not Disappoint, But Look Dilutive On Cash Flow Metrics [View article]
    I don't follow your argument, Darren. The matching principle is in SFAS133, except when the company does not declare the hedge as cash flow, fair value or net investment hedge. There is a good reason for not matching the revenues with expenses when the hedge is not declared as a hedge for accounting purposes, but it should be modified in certain cases like this, I agree.

    Before Enron there was an atmosphere of stretching the principles/rules and that still exists today. You can make the best principles/rules, but unethical people will find a way around them.. The problem is not the accounting guidance, IMO, but the corporate culture that still exists in corporate America. Cowboys will be cowboys, and crooks will be crooks no matter what the guidance is.
    Oct 15 01:27 PM | Likes Like |Link to Comment
  • Vanguard Natural Resources: Valuation Targets Price At $20 [View article]
    But if EPS is wrong, which it is in the case of VNR and LINE, due to hedging mismatches, it's garbage in and garbage out. Seems to me you have to have reliable EPS numbers for Graham's principles to work. How am I wrong or misguided? If GAAP is giving you bad data, how can Graham principles work?

    Do you understand what I am saying about the hedges, the hedge being valued at FMV, but the hedged item not being valued at FMV, but rather at historical cost? And the differences are material in nature.

    It's like trying to do a scientific experiment using bad data. You won't get reliable results.
    Oct 10 05:14 PM | Likes Like |Link to Comment
  • Vanguard Natural Resources: Valuation Targets Price At $20 [View article]
    The use of EPS is wrong because the EPS number is highly skewed for reasons I have already statd. The EPS numbers leave out the hedged items being marked to market, while the hedge is marked to market. Makes the GAAP Net Income or loss highly distorted and wrong.
    Oct 10 04:19 PM | Likes Like |Link to Comment
  • Vanguard Natural Resources: Valuation Targets Price At $20 [View article]
    What is failed to be realized here is that only one side of the hedging transactions is marked to fair value, the hedge. However, the hedged item remains at historical cost and not fair value. Makes the GAAP numbers highly skewed and distorted. Blows Graham's principles to pieces, IMO. You have to have reliable numbers to apply Graham's principles, and here you don't have reliable numbers for the reasons I have already stated. I'd suggest reading and studying SFAS133. You might actually come away benefitting from this fiasco of an article that you wrote.
    Oct 10 03:53 PM | Likes Like |Link to Comment
  • Vanguard Natural Resources: Valuation Targets Price At $20 [View article]
    4th year accounting and economics student.................. run for the hills. Without real world experience, 6 to 8 years, you don't realize how little you really know.

    Long VNR and buying more as the price drops. Most energy companies are taking a good hit at present. It's a temporary situation, IMO.
    Oct 9 09:13 PM | 3 Likes Like |Link to Comment
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