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  • Turns Out A Tesla Supercharger Costs 2 Or 3 Times What Elon Musk Said [View article]
    The FIRST EVER recommendation from CR came in the first article you cite. Since it was the first recommendation, they included input from 2012 and 2013 owners. That survey was based on some 600 plus owners. Then in 2014, the second recommendation came from a survey base of 1300 plus owners. Reliability is not declining and Tesla is not "right on the cusp of pushing CR over the edge". Your statements are BS.
    May 26, 2015. 09:46 AM | 6 Likes Like |Link to Comment
  • Turns Out A Tesla Supercharger Costs 2 Or 3 Times What Elon Musk Said [View article]

    I believe CR bases each year's reliability scores based on their subscriber base of actual users, not averaging two years together. Without a link to what you are saying I just don't find it credible.
    May 25, 2015. 02:39 AM | 6 Likes Like |Link to Comment
  • Turns Out A Tesla Supercharger Costs 2 Or 3 Times What Elon Musk Said [View article]
    Also note in the link that the reliability rating, based on actual user experience, was average for 2013, not below average, as you state. Your statements are not credible.
    May 23, 2015. 10:33 PM | 4 Likes Like |Link to Comment
  • Turns Out A Tesla Supercharger Costs 2 Or 3 Times What Elon Musk Said [View article]

    " CR got to average last year by taking the reliability experience in 2013, which was below average, and combining it with the reliability experience in 2014 which was above average. I don't have a cite for this, I'm sorry, but I heard this from someone who spoke to CR. "

    Without a source to back up your statement, I don't find it credible. The link from CR states their reliability scores are based upon input from actual owners, over 1300 for 2013.

    So, I don't buy any of what you are saying about Tesla Model S reliability without some source to back it up. As stated in the article, other luxury cars such as the Mercedes-Benz S Class and Cadillac XTS have far worse reliability. And that is based on actual user experience.
    May 23, 2015. 07:01 PM | 5 Likes Like |Link to Comment
  • Einhorn's Fracking Concerns Are Nothing New - Part 2: Opportunities For Profit [View article]
    "The experience of the presence of God is not recognized as possible, while still in bodily form. "

    The last part of Ephesians 3:19 amplified:
    "that you may be filled through all your being unto all the fullness of God; that is may have the richest measure of the divine Presence, and become a body wholly filled and flooded with God Himself!"

    You know not of what you speak. I am done. Arguing if futile.
    May 23, 2015. 05:33 AM | 1 Like Like |Link to Comment
  • Einhorn's Fracking Concerns Are Nothing New - Part 2: Opportunities For Profit [View article]
    Someone who has never searched for God is going to tell me what I experienced and how it all works. I think you are deluded.

    It was about 23 to 25 years afterward that I found Ephesians 3:19 in the amplified version. I didn't know that verse existed as is described in the amplified version for that time frame after the event.

    God's Presence was with me for three days, very intensely. Along with that came knowledge from God of an event that would take place several months later. The salvation of a young college student who I had tried to talk to about Christ a couple of weeks before. He was cold as a fish to what I was saying, so God telling me he was going to be redeemed was a surprise to me. Summer passed and it was time to get a dorm room for the fall semester of college. As I was signing in, this person I had talked to and who God told me would be redeemed walked up to me and began talking to me and telling me he had been saved over the summer. He wanted to get into Bible study and fellowship, so we became friends. I knew he was going to be redeemed. That didn't come from me. There are more events that have happened, but I tell you only about this one, and I have scripture to back up what I am saying.

    Someone knows exactly what I experienced, knows all about it even though he has never experienced it or searched for God. And reindeer really do fly.

    The scriptures (Bible) have led me into a relationship with the living God. It is by faith, but there are times when God reveals Himself to a person along the way in tangible ways.

    Bryce out.
    May 23, 2015. 05:08 AM | 2 Likes Like |Link to Comment
  • Linn Effectively Admits To Misleading Investors And Announces Key Accounting Changes [View article]
    "LINE is heavily, heavily leveraged, and such is the case with MLPs. But, if the price of oil ever so much as hiccups and declines for an extended period that leverage is going to back fire on them, IMO. I view a highly leveraged company as HIGH RISK/HIGH REWARD. "

    Jan. 10, 2013.

    I'll stick with equity REITs and more traditional corporations.
    May 22, 2015. 01:30 AM | 1 Like Like |Link to Comment
  • Linn Effectively Admits To Misleading Investors And Announces Key Accounting Changes [View article]
    I forgot to put in the link to the last post of mine in the post above, sorry.
    May 22, 2015. 12:23 AM | 1 Like Like |Link to Comment
  • Linn Effectively Admits To Misleading Investors And Announces Key Accounting Changes [View article]
    "Look at the numbers. Go to the SEC reports, 2006 through 2012. (You can forget 2013 and after because LINE doesn't provide sufficient information to calculate this anymore. Wonder why.)

    For each year, take GAAP Net Income, add to it unrealized losses on derivatives and all impairments. Subtract unrealized gains on derivatives. Once you've done that, you should get a number around $1.3 billion.

    Now, when you added back unrealized losses, you also added back the cost of the derivatives because these costs are net against the asset account. The resulting net unrealized loss, which was added back to Net Income, also has the costs of the put in that amount as well. So, you have to deduct this cost from GAAP Net Income. Likewise, when you subtracted unrealized gains, the cost of the option was netted against the gain, meaning the entire unrealized gain wasn't deducted from Net Income. So, you have to deduct the cost of the option from Net Income.

    I estimate about half of the options have expired at the end of 2012, meaning $700 million. Take the Adjusted Net Income of $1.315 billion and subtract $700 million. That yields $615 million in Net Income.

    The next thing you have to adjust for is depletion, depreciation, and amortization. How? You don't really have to. Just use common sense.

    Total DD&A taken on a GAAP basis, 2006 through 2012 was $1.7 billion (rounded). Total distributions made for the same time frame was $2.2 billion (rounded).

    Adjusted GAAP Net Income is $615 million. The difference between $615 million and total distributions of $2.2 billion is $1.585 billion. So, you'd have to back out $1.585 of $1.7 billion of DD&A to get Net Income to equal $2.2 billion, the amount of distributions paid out. Make sense?

    That leaves $115 million in DD&A for 6 years, totally unreasonable. And this accounts for ALL costs, every financial transaction, unlike calculating DCF. That tells you LINE is paying out a lot more in distributions than what they earn. The only way they can make up for this is if undepleted reserves have appreciated sufficiently to cover the deficit between actual economic earnings and distributions. If that doesn't make you shudder, I don't know what will. LINE is borrowing and issuing equity to make up the difference.

    Now, you imply I make up numbers. Go through the 10-Ks and calculate it for yourself. I've shown you and everyone else how to do it, with the exception of calculating expired puts. All the info is in the 10-Ks."

    " 'But, so what?'

    Paying out $2.2 Billion of cash flow to unitholders, which represents the cost of assets purchased, instead of retaining it for operations, paying off the debt borrowed to acquire the assets, causes the model to have to borrow more and more and issue more and more equity. It becomes a shuffle game, shuffling funds here and there, where ever needed to keep the company running. You like the model, great. I don't. How long can they keep it going? They have to acquire more and bigger acquisitions to keep it going, incurring more and more debt and/or diluting equity.

    'The bottomline seems to be that we are observing a timing issue and that it will only affect valuation metrics on a time value of money basis, thus properly reflected in Linn's numbers since they account for the costs of both borrowings and equity issuance, respectively, as interest or distributions.'

    You left out a small item: the cost of the assets. :)

    'I disagree adamantly with those who suggest than Linn requires new investors to fund current distributions or even to grow them a tad more, based on organic opportunities.'

    That's your choice. I predict LINE will be issuing more units, a lot more, prior to the end of 2013 because the cash flow isn't there to fund everything, including distributions, based solely on organic opportunities. I don't agree with your thesis

    'Now, any small shorts, who blindly followed Hedgeye et all are about to get squeezed. All sad and unnecessary, wouldn't you say?'

    I don't know how the SEC inquiry will turn out. It may go well for LINE or it may not. I have little faith left in the justice system after Enron, and other financial debacles, plus my own personal legal experience. It could go either way, pick a straw, long wins, short loses. :) "

    I haven't done an analysis of free cash flow (operating cash low minus capital expenditures) for LINE, but I would anticipate that the cumulative total would be very negative. I don't think that metric changes no matter what the capital structure of a company. Also, looking at the cash flow statement, I would assume that most years LINE borrowed more than the debt they paid off, a lot more. That by itself, IMO, has put them in a deep hole they find themselves in now.

    If always borrowing to acquire more assets is the standard mode of operation for MLPs, then I just don't care for the MLP model. Any company, no matter what the capital structure, has to generate sufficient earnings to pay for its debt, and any company has got to pay a sufficient amount of that debt off to keep it in good financial condition. I think the collapse in energy prices caught most of us with our pants down, including LINE. But LINE's management was ill prepared for it because it didn't pay down the debt over the years when it could have done so. Instead it chose to use those funds to pay out more distributions. So, I think, going forward, you can look to see if they are paying down debt to see if they are acting responsibly. (Check the cash flow statement quarterly to see if debt repayments exceed borrowings.) Doing so will require more earnings generation, more unit issuance (dilution), less distributions being paid out, or a combination of these.

    I don't think LINE earns enough to pay down its current debt load and maintain its current distribution. I think that is evident by the new equity issuance to pay off a very small amount of its debt load. If it cut the distribution altogether in order to try and use available funds to pay off its crushing debt load, its unit price would suffer tremendously. So, about its only option is to issue equity to accomplish this goal. I'm not sure I see this company surviving. If energy prices stay at this level, its assets may be worth less than its debt. I don't see another company coming in to acquire them, unless that company sees long term energy prices substantially higher, in which case LINE's assets may appear undervalued at current energy prices.

    But, I've always maintained that the company didn't earn enough to pay its distributions and complained about its debt load. If energy prices stay about where they are at to the end of the year, expect huge write downs in the value of LINE's assets. I see no basis, based on their prior business decisions, to trust the management. This company is a HUGE risk, IMO.

    No investment in LINE or LNCO.
    May 21, 2015. 11:07 PM | 3 Likes Like |Link to Comment
  • Tesla Vs. Porsche - Tales Of Growth [View article]
    SA's "new comments" software is messed up on my laptop. Anybody else have this problem? It is counting already reviewed posts as new. Sometimes it is counting new posts in the 100s, yikes. FUBAR
    May 20, 2015. 08:56 AM | 2 Likes Like |Link to Comment
  • Tesla Vs. Porsche - Tales Of Growth [View article]

    "If you make these adjustments, ie. lets use non gaap, but then capitalize half of R and D, add back amortization of that R and D, and then take the charge for stock based compensation, would Tesla have been profitable in 2014? Would it be profitable in 2015? "

    I don't like non-GAAP leaving out stock based compensation. I am talking about adjusting GAAP for 2013. There would be a little amortization of prior years R&D in 2013, but the leasing revenues would still put them in the black, IMO. I don't care to use Tesla's non-GAAP numbers. Just adjust the GAAP numbers.

    I said nothing about 2014 or 2015, just 2013. The comment was that Tesla still hadn't made money, referring to annual net income or loss. I think they showed profitability in 2013.
    May 20, 2015. 08:22 AM | 3 Likes Like |Link to Comment
  • The Hedge Bomb - Why Hedging Will Not Save Shale Oil [View article]
    I think what Warren Buffett said about earnings bears repeating here:


    Bear in mind--this is a critical fact often ignored--that investors as a whole cannot get anything out of their businesses except what the businesses earn. Sure, you and I can sell each other stocks at higher and higher prices. Let’s say the FORTUNE 500 was just one business and that the people in this room each owned a piece of it. In that case, we could sit here and sell each other pieces at ever-ascending prices. You personally might outsmart the next fellow by buying low and selling high. But no money would leave the game when that happened: You’d simply take out what he put in. Meanwhile, the experience of the group wouldn’t have been affected a whit, because its fate would still be tied to profits. The absolute most that the owners of a business, in aggregate, can get out of it in the end--between now and Judgment Day--is what that business earns over time."

    Earnings are better determined, IMO, by adjusting GAAP for distortions, rather than using the DCF formula. It certainly appears to me that in the case of LINE that the DCF formula failed them. Or maybe they just thought energy prices would go up forever and so spent every dime now, instead of putting some back. In any case, a conservative calculation of earnings, under adjusted GAAP, would have served them better than the DCF formula, IMO.
    May 20, 2015. 07:08 AM | 3 Likes Like |Link to Comment
  • The Hedge Bomb - Why Hedging Will Not Save Shale Oil [View article]

    Why would I try to buy a company whose debt is greater than the FMV of their assets? I am a novice to this, but that is what I am thinking. IF oil and gas prices don't rise, then come impairment determinations this year I would anticipate LINE to be writing down the value of their assets substantially. That may mean their debt is more than the FMV of the assets. Not a good situation to be in. Too much was paid out in distributions and no debt was paid "down" when they had the means to do so. I don't like the MLP model. Something is wrong with the DCF formula when this happens. When the DCF formula said they had a 1.0 or better ratio, my guess is they really didn't. Something is haywire to get into the situation LINE finds itself in. Any company needs to put some back for a rainy day.

    I remember commenting several times, two years or so ago, that LINE's debt level was getting too high. That was disregarded as not credible. Wonder what they think, about what I said, now?

    I tried to point out using the cash flow statement, that LINE had paid out 500 million more in distributions that its operating cash flow. That was said to be not credible. MLP Trader or something like that called me a shill for an author on SA. Where are those folks now, and what do they think about it now. I remember arguing with Philip Trender that the DCF formula doesn't take into account the pay off of assets. His reply was that the example I provided showed a very good return. How's that return working out now? What does Philip think now? It's just common sense. But, it seems in this day and age that common sense has left the building.
    May 20, 2015. 06:45 AM | 3 Likes Like |Link to Comment
  • The Hedge Bomb - Why Hedging Will Not Save Shale Oil [View article]
    @Pedro de Almeida,

    "GAAP is MUCH better than any other measure. In particular much better than cash flows. Also, it is the main yardstick that most investors and analysts use. "

    Generally, GAAP is superior to using cash flow because it includes credit transactions, where cash accounting does not. I fully agree with that. And GAAP, with its weaknesses, is the only recognized standard for SEC reports and FASB. It has served us well and made our financial markets the strongest in the world.

    I agree that I don't see LINE as a good investment, it has too much debt and its dependency on the market value of oil and gas has exposed them to a potentially huge loss in value of their assets, which makes the huge debt load even worse. I have commented in the past that I thought that LINE paid out distributions in excess of earnings, using adjusted GAAP, not cash flows, as the measure of earnings.

    But, GAAP does have weaknesses and it is not the only measure that investors and general financial statement users use to value a company or its stock.

    "but notice that your present simplified redaction makes the totally false claim that both derivatives and hedges produce no gains or loses... "

    What I am saying is that when a company hedges its production inventory with derivatives, that any increase in fair market value of the derivative is closely balanced with an offsetting decrease in fair market value of the production inventory that is hedged, and vice versa. GAAP fails to capture this economic reality only because LINE has chosen not to declare the derivatives as hedges for accounting purposes. In other words, it's a paper snafu that has nothing to do with economic reality.

    For LINE, entering into a derivative contract, the derivative hedges against loss of value if the production inventory falls in value. So, if the price of oil goes from $100 to $50, and LINE's derivative guarantees a $100 per barrel payout if the price of oil falls below $100, then as the market price of oil falls the derivative gains in value. Conversely, if the price of oil goes from $50 to $75 per barrel, the derivative that guarantees a $100 payout will fall in value. That is one side of the derivative transaction, and GAAP records those changes in market value and it is reflected on the Income Statement and Balance Sheet each accounting period.

    But the other side of the transaction is that as the derivative gains or loses value, the value of the hedged production inventory goes in the opposite direction and closely balances or offsets the gains or losses from the derivative. GAAP does not record the gain or loss in value of the hedged production inventory. In failing to do so, GAAP distorts the economic reality.

    "What I claim (and also what Kevin discovered by himself) is that these instruments presented big gains that were fully booked but are already in the past; that they will now present loses (unless crude and gas drop in price for the end of this quarter); and that almost everybody is unaware of this"

    They will present losses only under GAAP. As I have gone into detail on this thread to explain, the economic reality is that any losses from the derivatives will be closely balanced with gains in value from the hedged production inventory, which GAAP fails to reflect.

    The hedges are not "bombs", they are tools to protect and insure stable cash flows. To the degree the hedges are effective, there will be no material gain or loss on the sale of the hedged production inventory.
    May 20, 2015. 04:27 AM | 2 Likes Like |Link to Comment
  • Tesla Vs. Porsche - Tales Of Growth [View article]

    GAAP numbers need to be adjusted sometimes to get more reliable information.

    LEt's keep in mind that R&D is entered into to generate future revenue and that under international standards companies like Porshe, VW, and BMW (for Porsche 48 or 52 % Capitalized, can't remember which, BMW and VW are around 33% capitalization) capitalize a material portion of the development costs. So, that factors into how much profit or loss you report and how much operating cash flow you report. If Tesla capitalized a third of its R&D in 2013, that would have put them at break even. That is more reasonable that expensing all R&D as GAAP does.

    Then, if a portion of the guaranteed resale value sales turn out to be actual sales (customers keep their cars), that would put them in the black for 2013.

    So, I disagree that they haven't made a profit so far.
    May 20, 2015. 03:15 AM | 5 Likes Like |Link to Comment