FourBrane

25 Comments

    • Forget $100 a Barrel - Oil Will Plummet to $30 [view article]
      Oil drilling rigs are not "booked until 2012." There's plenty of idle capacity available right now, as anyone invested in drilling asset stocks already painfully knows. The current price of oil has not been in place long enough to give exploration companies the confidence to start investing in drilling at nearly the level needed to soak up capacity. Aug 15 03:17 PM
    • Oil vs. the Market: Major Changes Expected This Month [view article]
      mjaniec: "the recent conflict?" What a relief. I guess the war is over. Aug 10 03:57 PM
    • Crude Sell-off: Solid Entry Point into U.S. Oil Majors [view article]
      Pokeyclips2020, the water usage in tar sands extraction is not as high as you presently think. The water is recycled. The CRS Report for Congress (RS34258) dated January 17, 2008 claims that 2-3 barrels of water from the Athabaska River are needed per barrel of bitumen produced, but notes that this is before recycling. Makeup water is only .5 barrel per barrel of bitumen. (To make this clear, the first barrel of bitumen takes 2-3 barrels of water. The process loses about .5 barrel to escaped steam, etc. and thus the second barrel of bitumen needs just .5 barrels of additional "makeup" water.)
      Alberta is indeed concerned about pollution problems surrounding the extraction process and are likely to do several things, all of which will increase the production price. First on the list may be a 30% increase in royalties.
      I am long oil-related stocks, and momentarily taking a beating, but I look at the next five years and see no way for oil to remain below $150 per barrel. While I think your 300% margin requirement may be a trifle high (new side scanning techniques make drilling dry holes less likely), E&P is still an intensely risky, capital burning business and it will take oil remaining well above $100/bbl for at least a year before we see some serious new development. The oil exploration industry has to feel comfortable that the high price will still be in force 2-3 years from now when their production starts flowing before they will start shoveling money out the door to find and develop new expensive domestic resources. There are still millions of acres under contract in the Gulf of Mexico (GOM) which have not been explored, let alone drilled. Putting more unexplored acres under contract in the Atlantic or Pacific won't result in a single well being drilled until the price per barrel has stayed high for a long time and all of the GOM tracts have been drilled and are producing. The GOM comes first because flowline infrastructure already exists close to every new tract, so it's cheaper to get that oil to market.       Aug 06 06:02 PM
    • Intercontinental Exchange and the New ICE Age [view article]
      Amusing, the idiot who wants to nationalize oil. The US is a net oil importer because we do not have enough of the stuff inside our own territories to supply our needs. If you nationalize oil, I'll be looking for a good printing press so I can bid on printing the ration cards. Jun 27 03:05 PM
    • Indicator Points to Higher Gas Prices - and 3 Potential Power Plays [view article]
      This article's premise that lower demand worldwide will mean increasing margins flies in the face of economic fact. Markets experiencing decreasing demand always see downward pressure on margins. Oil is not exempt from economic law and it would take four or five years of reduced oil prices to lull the consumers back into buying Hummers and other guzzlers. Meanwhile, deepwater drilling, oil sands extraction, biofuels, etc. come at HUGE cost increases, so where would that leave supply?
      When crack spreads widen it won't be because of falling demand; it will be solely due to internal industry pressure--you just can't keep producing for peanuts and maintain your equipment properly. So, at some point next year, expect to see spreads widen modestly on their own.
       Jun 14 11:52 AM
    • Sigma Designs Should Fall on Lost Blu-ray Customer [view article]
      This is Baird's second full-bore attack on Sigma. The stock is already in take-over range, so they need to close their short position and move on. Even with this new attack, they haven't been able to do more than squeeze another three bits out of the stock. I'm a buyer at these levels as there's nowhere to go but up.
      Most of these losses should really be thought of as second-sourcing arrangements which are to be expected as Blu-ray makers scramble to ramp volume. As to consensus, they have always been wrong on this stock. Never close, even once. (Sigma needs to hire someone who can handle a conference call and knows how to drop hints to help these incredibly stupid analysts look better. Hell hath no fury like an analyst with egg on his face.)
      At this PE for a company with products in several growth markets, there just is no short case to be made.       Jun 10 04:57 PM
    • An Oil-Driven Paradigm Shift? [view article]
      The comments found here are a representative cross section of the idea spectrum, running from right wing drill anywhere and to hell with the damn land people to back to moccasins and bone needles conservationists to the dreaming Polyannas who are certain that Amenrican Inventiveness can cure anything. Three blind men discussing the elephant, each describing their particular guess on what it looks like based on trunk, leg and tail.
      Sadly, I doubt that there is a easy way out of this one because the elephant in the room is over-population. Demand for oil, food, water, and every other resource is now or will shortly be approaching asymptote.
      Buy oil, natgas, uranium, other metals, water rights...and guns.       Jun 09 12:20 PM
    • Recent Stock Performance Based on Analyst Ratings [view article]
      In my experience, analysts upgrade/downgrades typically follow the market rather than lead it. The stock has gone up, causing people on the sidelines to start thinking, "Maybe I should..." Then the analyst recommendation hits and some of those wallflowers decide to dance. The same process happens in reverse with nervous holders wondering if they should sell, then deciding.
      It's hardly worth paying attention to since the total difference between worst and best performing analyst deciles appears to be less than 5% and this small difference when the analysts are not even "predicting,"... they "postdicting.&quo...       Jun 05 08:49 AM
    • Fuel Check [view article]
      It is amusing to read stories today using "plumeted" to reference a drop of $2 and change. As for inventories, they may fall for lots of reasons...oil refiners may decide to draw down in hopes they can replace stocks later more cheaply, or, bad weather or other difficulties delay offloading tankers, or, a key supplier decided to fill an order to China ahead of our guys.
      I think Jangchup has it right. It's some intermediate profit taking.
      Bespoke's charts show us just what we would expect as a commodity becomes hugely more expensive: processors stop storing tons of it. Very few jewelers can afford to keep thousands of pounds of gold laying around waiting for use, but if gold were as cheap as bricks you'd see towering stacks of the stuff in the jeweler's back yard...for convenience. Same with refiners. They pay attention to dollar inventory turns llike anyone else. To fill a tank farm now takes twice as much money. Only a fool would keep up the old habits of filling all his tanks to the max.
       Jun 04 08:14 PM
    • China's Coming 'E-tail' Renaissance [view article]
      I would feel more confidence in this coming boom if some mention had been made of package delivery improvements. It is one thing to trust the company you are placing the order with, and to trust the secure server enough to give your credit card, but...at least here in the U.S... we do not have to worry much about whether the package will actually arrive. I suspect that this might not be the case in China. Without evidence that the Chinese are beginning to use and trust package delivery, I have little confindence that etailing will take off in a big way. Jun 03 04:56 PM
    • Fitch Skeptical of InBev-Anheuser Merger Prospect [view article]
      The peer comparisons accompanying this article suggest to me that InBev would find a better fit with SAB Miller since there would be extra profit in consolidating with its Asian and Latin American brands. Plus, BUD is already bristling and is too full of the family tradition crap to negotiate rationally. Miller has already suggested it might accept $29.50 or so in a "merger of equals." That's far, far less money for much, much more worldwide profit.
      It seems to me that a smart play is to short BUD on this run up since the deal really makes no sense, other than pride in suddenly being number one in America, where growth potential is less than areas where Miller has strength.       Jun 02 07:05 PM
    • Deutsche Treat - Cramer's Lightning Round (5/6/08) [view article]
      Asking Cramer to consider all the facts about a company or sector is like explaining the facts of gravity to Wily Coyote or asking him to stop buying stuff from Acme. If you were successful, the show would be no fun. And, remember, it's called "Lightning Round," not "Thoughtful Opinion."
      The only reason to pay any attention to Cramer is because he can occasionally move small stocks, creating buying or shorting opportunities to sheer some fleece off the sheep.       May 09 04:50 PM
    • Herbalife President Falsified Credentials - Barry Minkow [view article]
      This smells of scam. A former felon writes a column in which he pretends outrage over a credentials lie while quoting information developed by another former felon. To prove good faith, he proudly states that the other former felon is letting the Feds examine his accounts...which Minkow damn well has to do since he's still under court sentencing. In other words, if these two crooks actually manage to drive HLF down, the correct response will be to buy shares in HLF.
       Apr 29 10:21 PM
    • Peter Hooper on the Economic Outlook [view article]
      We'll have to see mortgage securitization recover rapidly if house prices are to stop falling. Hooper's chart does not suggest any hope for real estate, so I wonder how he came to expect that house prices would stabilize in the absence of mortgage funds. Lenders have to securitize their loan portfolios to restock the pot. This must be watched very carefully and I'm expecting much more downside than we've seen. Apr 29 04:21 AM
    • The Lessons I Learned From Passing on RadioShack and M & F Worldwide [view article]
      You seem to be saying that this company is in the licorice business, but that's not quite the case.

      I missed the up rocket, but think there might be a down rocket. Here are my notes:

      June 9: For a time I considered shorting this company, but after looking at it more closely I think it's simply impossible to figure. There are dead and dying industries mixed with others that are doing well (although for how long...?)

      This company is classed as a "food processor," but that's just plain wrong. It's a messy conglomerate of stuff that doesn't belong together. You've got: a smallpox drug pharma, a licorice refiner, Hummer, the Panavision movie camera, a 35 mm film processing lab, Revlon, three different printers of bank checks, financial software, a big lottery ticket producer, the Scantron school grading systems, and an early-stage pharma with no products. What the hell is this thing? How do you figure it out?

      Long term it looks over-priced at a PE of 38 for a bunch of disconnected trash and treasure, but it's at the bottom of its 3 and 6 month channels and could easily climb 10% over the next quarter. Plus, fighting the deep pockets of Ron Perelman is not my idea of a safe bet.

      The Harland acquisition is underwhelming as this just gives them a bigger stake in a dying industry. Each year fewer checks are written as more of us move our money around electronically.       Aug 11 06:35 PM
Loading...
Symbols:
Authors:
Quick Links:
Contribute an Article Become a Seeking Alpha Contributor

Transcripts

More Transcripts»