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threeleaves

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  • Apple Continues To Bleed Market Share [View article]
    My only gripe with Apple is that they caved to activists when the stock was near $400. In early 2013 the negative media frenzy was at such a heightened pitch that the stock could have easily floundered to the low $300's. All Apple had to do was keep their mouths shut and let it happen. They missed an opportunity to buy tons of stock on the super-cheap, which would have bought them more time to address the most important issue which is new products. They could have even repatriated money for the buybacks if the prices were cheap enough. If you projected cash/share forward a half decade or so, a $300 purchase price would have been close to buying the company in exchange for cash with the bonus of a free business. That's how insane the negative media frenzy was. That sell-off was far more irrational than any irrationality surrounding apple's stock split and subsequent rise in stock price that the author takes issue with.
    May 4 11:35 AM | 4 Likes Like |Link to Comment
  • Is EOG Running On Empty? [View article]
    Author writes "The trend by exploration companies, which are now scurrying to produce oil, is eerily similar to the trend to produce natural gas that eventually led to oversupply, thus crushing the price of natural gas. . . . With the recent technological advances in oil extraction, (such as fracking and horizontal drilling) along with so many companies shifting their resources towards oil production, it is not unreasonable to believe that U.S. oil production will increase to the point where WTI prices will fall or even crash."

    There is a difference between gas and oil. Mainly, the dry-gas glut has much to do with the fact that United States infrastructure is not built to consume the massive quantities coming out of the ground. And because of the hurdles of LNG exports, domestic gas prices are in essence quarantined from much higher prices in asia and europe.

    With oil, yes there are some hurdles that discount the price of domestic shale oil in relation to brent, but the spreads are not nearly as drastic as domestic/global natural gas spreads. Those tighter oil spreads will stay intact because our infrastructure in the U.S. is built to consume massive quantities of oil. So much so that we still import over half of what we need.
    Mar 22 07:49 PM | 4 Likes Like |Link to Comment
  • Freeport-McMoRan: Why Its Acquisitions May Cause Investors To Sell [View article]
    I think you're right on about this. If you listened to the conference call, the guy from blackrock was royally ticked. I actually started to laugh out loud at one point thinking--o.k. this guy manages billions of dollars worth of money for one of the largest investment firms in the world, he's got a huge position in fcx because he wants direct exposure to copper, and then overnight he not only has to deal with the fact that his huge position just got whacked, but he has to rebuild his portfolio to get the copper exposure he wants. Of course he's pissed! He could try to hedge out mmr and pxp, but that's a big gamble and complicated. FCX was a great proxy to copper, whether as a strict long, or as a hedge to short positions like iron ore. Now a lot of people who owned FCX are caught with their pants down while some of the metals and coal stocks rally.

    @maverta--I don't think the title is misleading at all. The author is simply trying to explain a dynamic that may lead to selling of fcx.
    Dec 6 10:41 AM | 4 Likes Like |Link to Comment
  • American Airlines Can't Buy Stock Quick Enough [View article]
    I do not think it prudent to rule out a close correlation between jet fuel and crude, especially Brent. International refining capacity is abundant. Domestic capacity is obviously more challenged, but refineries are adjusting and expanding to take on more light crude as the margins are there.

    The complexities and bottlenecks in the refining business are important and should be paid attention to. But the main theme here is that the U.S. imports dramatically less oil than it did just a few years ago, and that domestic production will continue to rise over the next decade. This puts pressure on international crude benchmarks which in turn puts pressure on the price of refined products. If brent jumped to $150 over the next few years, domestic jet fuel would jump with it as domestic refineries have the option to export their product in line with international refineries. My thesis is that because of domestic crude production, the likelihood of Brent rising to $150 in the next decade is low--keeping jet fuel prices in check. . . . I worry about deflation in oil commodities than inflation.
    Aug 1 05:25 PM | 2 Likes Like |Link to Comment
  • Get Ready For The Big One - Bakken Flooding Coming This Year? [View article]
    Even if the author were correct, I think it's naive to suppose that such a one-time event would translate to lower stock prices for any company that could weather the storm. If the market has a positive sentiment towards a sector or stock that gets bashed because of a one-time event, the sector or stock will sky-rocket as a way of defying naive sellers. For example, if you were short airlines during the 2010 record snowstorms, you watched stock prices surge. Same thing in 2009 and 2010 with all the miners: any negative event relating to weather disruptions, strikes, etc. only sent the stocks surging higher. That said, the market sentiment on the domestic oil sector seems to be unenthusiastic at best, but such an event could be a test of where the bids are at.
    Mar 25 02:38 PM | 2 Likes Like |Link to Comment
  • Why Exxon Mobil Is An 'Inevitable' Buy Now [View article]
    So I wonder why Buffett took a small position in mid '09, then promptly began his exit from the stock in early '10. Remind me, when was the XTO acquisition?
    Dec 11 10:16 PM | 2 Likes Like |Link to Comment
  • Losing Egypt Won't Be A Disaster For Apache [View article]
    It's about time someone laid this out. Much better APA article than most. There have been several SA articles on APA lately that have not so much as mentioned the Egypt situation. Thanks for having a clue.
    Jun 19 02:31 PM | 2 Likes Like |Link to Comment
  • American Airlines Can't Buy Stock Quick Enough [View article]
    I was short airlines in 2010, 2011 and made money. But it was the stupidest speculation I ever made in the stock market, and I consider myself lucky to have gotten out unscathed. In 2012 I reversed my position, covered, and have been building long positions since that time. Part of my long thesis hinges on historical negative sentiment (e.g. Buffet, DeepValueLover, myself). The negative historical sentiment will always cause sharp selloffs from time to time which I see as a healthy necessity for long term price appreciation. It's the classic wall of worry. As far as oil price volatility goes, I think DVL has it dead wrong. Among the fundamental shifts in the industry that people have enumerated, the oil price factor is among the most important. The massive quantities of oil coming out of the Baaken, Eagle Ford, and Permian make the surge in oil prices that we saw a decade ago highly unlikely to repeat. For the most part, I think the so-called shale revolution is under-reported and under appreciated due to the fact that Americans take low gasoline prices for granted. Stable $100 oil factors into many of my investment thesis besides domestic airlines. In short, I think meaningful oil price volatility is over for the next decade. When trouble arises in the middle east or Russia, you will see short term spikes, but they are meaningless in my opinion. I also think Delta's access to domestic crude via their refinery is underestimated in terms of their competitiveness with other airlines including non U.S. carriers, although possible lifting of the export ban should be watched out for--even though people seem to differ on its possible effects.
    Aug 1 12:46 PM | 1 Like Like |Link to Comment
  • Miller Energy: Faulty Reserve Assumptions And Poor Cash Flow Leave Little Equity Value [View article]
    The part of the proxy that has me interested is this:

    "Worse still, Miller has issued grants to its underperforming executives so that as of July 5, 2013, there were outstanding options and warrants to purchase up to 14,503,847 shares at an exercise price between $0.01 and $6.94 per share. If these warrants and options are exercised, total shares would increase by 30%. . . . This effectively means that the shareholders’ loss of value from such a massive dilution and decrease in voting power will be directly offset by an increase in the management’s and directors’ control. We note the curious fact that by our estimate if the management team were to exercise all their awarded options the aggregate ownership of all insiders will amount to approximately 51% of the voting power of all outstanding Miller shares."

    So . . . given the above statement in the proxy, can anyone here give some likely scenarios of how this plays out?
    Dec 17 05:26 PM | 1 Like Like |Link to Comment
  • Miller Energy: Faulty Reserve Assumptions And Poor Cash Flow Leave Little Equity Value [View article]
    Interesting activity today. Proxy filed by group of large shareholders to replace board, taking aim at coziness with executive management. Excessive compensation, lining pockets, shareholder dilution, G&A expenses, etc.

    http://1.usa.gov/1bNZgU6
    Dec 17 12:47 PM | 1 Like Like |Link to Comment
  • Are Energy Investors Rotating Out Of Shale Producers And Into Big Oil? [View article]
    Found this article on Bloomberg describing the role Platts Publishing has in Bakken price discovery.

    http://bloom.bg/1jAA2Ne
    Dec 8 11:15 AM | 1 Like Like |Link to Comment
  • Apple Could Shake Up Popular Buyback ETF [View article]
    Good point, but I'm not so sure. Ichan didn't come in until after Einhorn started meddling, and until after the stock had found medium term support around 400. When einhorn started to meddle, and when all the eggheads on wall-street and cnbc started whining about how apple wasn't shareholder friendly, they should have flipped everyone off (in a polite as way as possible of course) and encouraged them to press their sell buttons. There were a bunch of dummies selling at 388, and I can guarantee you there would have been even more dummies selling had it dropped below 300.
    Aug 22 07:30 PM | 1 Like Like |Link to Comment
  • Apple Could Shake Up Popular Buyback ETF [View article]
    I always thought apple should have waited before they started announcing buybacks. It seemed like the market wanted to take the stock down further than it did. Why not let it, then back up the truck on your own shares, maybe even repatriate cash to do it. They could have gotten more bang for their buck, and they could have bought more time to develop new products, giving themselves an eps boost for a couple years or more. I thought the media frenzied negativity in the stock at the beginning of the year was beautiful. I think apple should have stoked the negativity even further. I honestly don't think that the frenzy had reached its climax. If cash is king, we're talking about one of the most powerful institutions in the world. Why they need einhorn or ichan to tell them how to run their company is beyond me.
    Aug 22 06:49 PM | 1 Like Like |Link to Comment
  • Apache Corp. Just Needs Some Time [View article]
    I agree that Egypt will probably be fine, but Argentina is a drop in the bucket compared to the big scoop that is Egypt. As you indicated, Argentina was 3% of revenue in 2012. Egypt was 27%, and far superior margins. So the ultimate risk in Egypt is far greater than Argentina, even if the likelihood of government meddling is smaller, as you seem to think.

    As far as clarity in Egypt, it depends on what exactly is "clear". I personally think that what wall street cares about is whether or not the military maintains a large degree of power, or not.

    I think FID on Kitimat is the next catalyst. But who knows when that will happen. Chevron said yesterday that they wanted contracts signed for 60 to 70% of the gas. I'm not sure if they have any signed at all.
    Mar 13 11:55 AM | 1 Like Like |Link to Comment
  • Don't Expect The EPA To Finish Off Shale Gas, Either [View article]
    CNBC had a slide show on the 10 most polluted countries in the world, and the first thing I noticed is that all of their economies rely heavily on the extraction business. Not sure how accurate their info was, but it makes you think.

    Seems like the Western world exports those businesses because we would rather all the poor folks in third world countries have cesspools in their backyards than us (think copper tailings in Papua) Crafty little bastards aren't we. . . . 10% china GDP, but at what cost. More like GDD--gross domestic destruction. Subtract all the costs of pollution (quality of life, death, cancer,resource destruction, etc.) and GDP is a lot harder to figure out. I'm sure we could have 10% GDP here in the states if we unleash the miners and oilers, tell them to just laugh off all the hippies that care about foolish things like fish and salamanders, so we can supply a revived manufacturing base with cheap fuel. And we'll just put all those factories where we always do--in our own third world: backwoods America. Poor bastards will be so happy to have a job, they won't care about the cesspools in their backyard, or that persistent cough, while all the shareholders laugh it up in the suburbs. The extractors LOVE a bad economy, and they love high unemployment because it gives them the persuasive leverage to do business in America's backyard. I can't tell you how many papers and articles I've read written by people in the energy industry that constantly harp on the bad economy. Even when the economy is good, they like to portray a bad economy. Crisis equals opportunity. But most of us would rather the extraction business stay in the third world 'cause who cares about them folks in that country I've never heard of. Isn't it OXY who has wells located in warehouses in L.A.? If only those yuppies in Coldwater knew what was in their backyard!

    I am NOT against extraction. But I am against people who just don't give a crap. . . . You're concerned about your water supply? Oh my god! Shocker! . . . Why are oil people so surprised by this, considering our history with water pollution in the past? It's not a political issue, even if the politicians make it one. It's wrong and stupid for the left to leverage fear, but fear is a politicians favorite tool.The left and the right use it equally to push whatever agenda they have because people respond to it. . . . But the Cumberland River where I fish for all manner of aquatic species is not a political issue--it's a river, and a damn fine one at that. A lot cleaner than it was twenty years ago. Air and water and health and quality of life are important to many people. Most people I would say. It's the few that don't give a crap that worry me.
    Nov 16 01:35 AM | 1 Like Like |Link to Comment
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