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  • EIA Petroleum Inventories [View news story]
    People ought to take note that this ongoing drawdown is occurring even before the shale wells have begun to run dry. The US has very little experience projecting production from a very large number of frack wells. However everything I've read indicates they produce fast and hard and run dry very quickly.

    If that's the case then in a fairly short period of time either the inventory draw will be huge or the price will rise dramatically.
    Jun 10, 2015. 10:44 AM | 21 Likes Like |Link to Comment
  • Big move sends oil higher for the week; money exits oil/energy funds [View news story]
    All the factors you mentioned contributed to the 50% decline. However markets look forward and the price decline has induced both inventory draws as well as a halving of NA rig count. Frack wells produce a lot but they also run dry fast.
    May 29, 2015. 05:49 PM | 3 Likes Like |Link to Comment
  • EIA Petroleum Inventories [View news story]
    When the rig count in the US shot up to 1500 everyone was "shocked" that it produced a glut. Now that the rig count has been slashed in 1/2 everyone will be "shocked" when supply tightens. Shale production will be the swing producer... But clearly the price isn't 50. We won't know where Shale will step in until the rig count starts to rise again. Then we'll have a good idea of the new equilibrium price.
    May 28, 2015. 11:38 AM | 1 Like Like |Link to Comment
  • Qualcomm Needs Innovation, Not Breakup; Jana Needs Patience [View article]
    Companies like this tend to bounce back. They have a history of innovation; a huge pile of cash and no debt. On top of that they have a massive amount of fcf.

    My primary concern about QCOM is that they may be TOO shareholder friendly. Their promise to return 75% of fcf to investors is great during good times but may be misguided when the business needs a very large R&D or marketing push.

    I'm not too worried though because their cash on the books already leaves plenty of maneuvering room. In fact, they would probably be well served by issuing some debt to fund the share buybacks given the extremely low interest rate environment.
    Apr 25, 2015. 11:29 AM | 1 Like Like |Link to Comment
  • Qualcomm beats estimates, but guides light [View news story]
    QCOM is going to be in a challenging environment for some time. There are at least 3 large macro trends working against them however they do have a strong brand and a lot of cash and a lot of talented staff. I would not count them out just yet.
    Apr 22, 2015. 04:38 PM | 6 Likes Like |Link to Comment
  • IEA sees renewed pressure on crude prices [View news story]
    With the US rig count off sharply now would be the right time for opec to step in and at least balance off supply with demand. The argument that US shale isn't doing its part is no longer valid.

    If they don't do something the next leg down might have no bottom as room to store crude runs out.
    Mar 13, 2015. 08:48 AM | Likes Like |Link to Comment
  • Brent tops $60 for first time in 2015 [View news story]
    I'm expecting some short covering panic rallies. but I still have a short term bias lower.
    Feb 13, 2015. 08:04 AM | 1 Like Like |Link to Comment
  • Is crude oil's bounce over? [View news story]
    I'm playing volatility on the long side. feels like free money because oil can't go to zero. all I need to do is buy on the way down and sell the rips. if a trade gets away from what? oil will be back to 80 in a flash with the next war, hurricane, bankruptcy, etc. the catalysts medium and longer term are up, not down.
    Feb 10, 2015. 08:32 PM | 2 Likes Like |Link to Comment
  • Qualcomm Still Challenged In China After Settlement [View article]
    qcom is a strong company with good IP but most of their profit is from IP sold in China. that's a tenuous position at best. there is no guarantee China is done squeezing QCOM. in fact, this may only be the start since China seems determined to move to standards they own.
    Feb 10, 2015. 01:12 PM | Likes Like |Link to Comment
  • Copper prices surge on China stimulus hopes [View news story]
    dbo and DBA are at or below 2009 lows. dbb would have to fall 50% more to get there. To me that suggests either metals are overpriced or oil is underpriced. Lots of money in it for me if I get this one right.
    Feb 3, 2015. 11:03 AM | Likes Like |Link to Comment
  • Schlumberger's $1.7B for stake in Russian driller gets cool reception [View news story]
    if you're an oil company then now is the time to make moves like this. either oil is a dead asset or it isn't. how one feels about this move depends on where you see oil prices 2, 5 and 10 years out.
    Jan 20, 2015. 12:19 PM | Likes Like |Link to Comment
  • Stock Pick Of The Week: Qualcomm [View article]
    I won't own it because I can't model in any reasonable way what China is going to do. and since China is such a large % of their profit the China decision could permanently change the net present value of expected cash flows.
    Jan 20, 2015. 12:15 PM | 1 Like Like |Link to Comment
  • U.S. rig count slides again, hits lowest total since October 2010 [View news story]
    as an oil bull this indicates to me that $50 oil isn't sustainable for very long. clearly incremental new shale output isn't profitable at this price. further it may be that even some existing wells aren't profitable at this price. and since US shale is now the swing producer it indicates to me that prices inevitably have to rise. this is particularly true given how fast shale wells run dry.
    Jan 16, 2015. 03:35 PM | 3 Likes Like |Link to Comment
  • Schlumberger: Controlling What It Can [View article]
    good on SLB for raising the dividend, it shows their commitment to returning shareholder value. however I think they are being too optimistic in the face of what will probably be a rough year...maybe two. I'll keep building my position in SLB but with the continued expectation of significant downside. it is worth noting that oil is well below the 2009 low but SLB is no where near its 2009 low.
    Jan 16, 2015. 11:16 AM | 4 Likes Like |Link to Comment
  • Stock Purchase 12/31 - Schlumberger [View article]
    if you look at their 10k you'll see virtually all their revenue growth recently was in north america (not too surprising). I think it's still unclear how much revenue is going to come off the table now that the new well count in the shale plays have come almost to a standstill.

    I own some SLB but I'm not even close to all the way in. I think 2015 could potentially be extremely rough on SLB's top line. As you note they have a strong balance sheet and a good business moat. however I think the current oil price meltdown isn't yet fully reflected in SLB's price. personally I'll be looking for weakness in the next few quarters to establish a long term core position.
    Jan 4, 2015. 12:46 PM | 5 Likes Like |Link to Comment