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  • 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 The argument that US shale isn't doing its part is no longer valid.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
  • Sell OIL - $50 Crude By Year-End [View article]
    Look at any production chart for the last 10 years. OPECs production hasn't budged. Even 100/bbl oil couldn't get their production up. I'm convinced OPEC has no spare production to do anything.

    What changed is a massive spike in shale oil from the US. Now, if we had seen a spike in supply from OPEC then I'd agree with you that OPEC is trying to kill shale drillers. But the data just doesn't support that view. The data indicates the shale drillers drilled their way into this predicament.

    On the plus side, if you're long oil, shale drillers can be very nimble and we're already seeing rig counts come off as the price falls. I'm going to get in trouble for this, maybe, but as the "marginal producer" the shale drillers, in a sense, now determine the price of oil in the way that OPEC used to control the price. And since US shale oil isn't a cartel it will be driven a lot more by what is profitable and what isn't.

    In that context the price of oil is going to depend quite a bit on the marginal costs for new shale production. Why? Because shale wells run dry very quickly. Brand new well platforms in North American shale will almost certainly drop off considerably if oil stays below 60. The existing wells can run profitably at much lower prices but as i noted they run dry quickly. US Shale has probably lowered the equilibrium price of WTI in a durable way it's just a challenge to figure out exactly what the new number is. My own personal hypothesis is the "new normal" is 60-90 rather than what it had been, 90-120.
    Dec 20, 2014. 11:38 AM | 2 Likes Like |Link to Comment
  • Sell OIL - $50 Crude By Year-End [View article]
    I'll keep buying oil on the way down unless i can see convincing evidence that there are in fact NOT 3 billion people in India and China that want to buy cars, McMansions and everything else that goes along with consumerism.

    Yes, the shale drillers temporarily overshot and the world economy slowed unexpectedly. But if oil were to stay at 60 about 1/4 of the world's new oil supply would come offline. If oil stayed at $40 about 1/2 of the new supply would come offline, maybe more. Obviously that's not sustainable in a world with a growing population thirsty for a western lifestyle.
    Dec 19, 2014. 03:40 PM | 13 Likes Like |Link to Comment
  • Oil falls back into the red on the day; stocks retrace some gains [View news story]
    I sold some of my long oil positions on the rally today. if there was ever a case to be made for "buy the rumor sell the news", it was oil up 4% today only to fall back into the red.

    perspective helps here. in all prior drops of this magnitude oil didn't come back in a day or a takes months. There is lots of liquidity in the world and I'll be looking to trade volatility as oil bottoms. today was a great example of the fact that there is money to be made trading the wild emotional swings around oil.

    forget geopolitics and trade the vol.
    Dec 17, 2014. 07:08 PM | Likes Like |Link to Comment