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Talking stocks, trading, and investing in general

Discussion in 'Business, Careers & Education' started by mikeman, Feb 2, 2011.

  1. idfnl

    idfnl Senior member

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    And more bank downgrades
     
  2. Concordia

    Concordia Senior member Dubiously Honored

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    This is an interesting one. A huge cash crunch right now, which will doubtless benefit some private lenders. Apparently most of the bank-sourced project finance in this area comes from a handful of European banks who have other things to worry about now. So there's some money to be made by other financiers.

    On the other hand, I just read some interesting articles interviewing Mason Hawkins and a few of the other big investors in CHK. There's no way that natural gas won't be higher in a couple of years, at least relative to coal and oil. And with their back of the envelope calculations, that could mean a 5x return on CHK for the patient.
     
    Last edited: Jun 23, 2012
  3. yjeezle

    yjeezle Senior member

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    do you have an article for higher natural gas prices?
     
  4. RWDouty

    RWDouty Member

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    I'd be slightly cautious about the long-run profitability of US natural gas suppliers. Their success hinges upon the irrationality of Arab countries. The fact of the matter is that oil production in Saudi Arabia has a marginal cost of only $5, including shipment. If countries in the middle east sense that natural gas producers are cutting into profitability of their substitutabile goods, then they can just drive out those businesses by temporarily driving down prices. And because us/Canadian natural gas production has a significantly higher marginal cost in comparison to the oligopoly in the middle east, the viability of successfully competing with a price decline is compromised. We can only hope that saudi Arabia and the likes act irrationally, which isn't too far fetched of any idea.
     
  5. RWDouty

    RWDouty Member

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    Market timing is futile. Attempting to discern seasonal of yearly trends almost always backfires. Real estate, for example, was seen as a stable investment for almost the past hundred years... Look what happens. Speculation is the downfall of the investment community; no matter what economists say, their predictions are most always guesses based on questionable assumptions of past trends and comparable analysis. In my view, we should invest in companies and industries based in microeconomic conditions and not the irrationality of day to day macroeconomic news stories. Whether your a traditional value, GARP, or momentum growth investor, success begins
    with an understanding of companies and industries. Why do you think both sell side and buy side groups have analysts focus on specific industries?
     
  6. SkinnyGoomba

    SkinnyGoomba Senior member

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    Mind you, I make no changes, just bracing myself for what could be a rough couple of months if 2nd qrt earnings really suck and/or Europe gets worse or the us economy continues to worsen.

    Chagall simply likes to suggest tht everything I say is slightly incorrect, which may be true....yes if you were short financials in 2008 the summer was good for you...great logic. :slayer:

    About natty gas, I think over the long term it will come back in line with a more normal price relative to oil. Exxon seems to think it will be a good market to be in, they bought XTO in 2009.
     
    Last edited: Jun 24, 2012
  7. javyn

    javyn Senior member

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    Yeah over long term it will come back, buy why not wait until the supply dries up and the rig count starts rising again? Rig count in the US is near 10 year lows at around 650, and I don't see that changing soon. Especially since so much gas is being released while fracking for oil that they can't even store so they are just flaring the shit off.

    If you want in energy, I'd get into tools and services, otherwise avoid. That's just me though.

    I've always had luck jumping into NOV after it's been beat down. Got extra lucky a few years ago and even hit the split.
     
    Last edited: Jun 24, 2012
  8. Concordia

    Concordia Senior member Dubiously Honored

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    Oil certainly could go below $10-- it's happened before.

    The case for higher NG prices (and those who benefit) has to do with cost of production in the US, which is somewhere between $3-4. Also, a lot of the recent oversupply that's driven prices down has come from drilling that companies need to do to hold onto their suddenly useful leases. The fracking has been good for some things, but has created a lot of temporary imbalances as everyone adjusts. Once those initial wells slow down (and if we get more normal winters), we're likely to see supplies shrink a bit and prices go north of $4.

    On the demand side, as aging, expensive, coal plants close down, there will be a lot of power generators that will probably prefer gas to other sources of BTUs.

    There's more than one way to play that development, but it's a big story that will be unfolding to someone's advantage. I don't own CHK myself, but I will be looking on with interest.
     
    Last edited: Jun 24, 2012
  9. chogall

    chogall Senior member

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    There's market timing and there's reading of announced QE/OT/LTRO/ZIRP/Inflation Target monetary policies. The former requires trading acumen, the latter requires reading a few well published notes by different central banks.

    Most industry fundamentals is deeply impacted by monetary and fiscal policy.

    p.s., leave those 'value' investing for the secular bull market and closet PE fund managers like Buffett/Ackman/Lampert. But if you are a lucky sperm and can afford to get board seats, by all means become an 'value' investor.

    p.s.s., and both sell/buy side have strategists sitting on top of analysts, ya?

    SG, just stating facts, and I do know some funds that profited from short fin/long commodities since 07. Subprime first made major headline in Shanghai crash of early 2007.
     
  10. chogall

    chogall Senior member

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    and gold could go below $40 -- it's happened before.

    but no, with all these loose monetary policies going on, they will not let oil go back to below $10. fed mandate is for price stability, and there's no price stability in oil going below $10.
     
  11. SkinnyGoomba

    SkinnyGoomba Senior member

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    Heading toward te negative this am...
     
  12. NameBack

    NameBack Senior member

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    And June was looking so promising there for a while...
     
  13. Concordia

    Concordia Senior member Dubiously Honored

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    Not that I take trading (or long-term investing) advice from economists, but here's another way to start the week off well:

    http://www.nytimes.com/2012/06/25/opinion/krugman-the-great-abdication.html?hp
     
    Last edited: Jun 25, 2012
  14. chogall

    chogall Senior member

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    the last 2 weeks of june of 2011 were nothing but strong close in positive territory, and it turned out to be a dead cat bounce until the liquidity tsunami.
     
  15. SkinnyGoomba

    SkinnyGoomba Senior member

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    Yes that turned out to be quite exciting.

    One year has passed and we're all of about 500 points higher than this time last year on the Dow....
     
  16. chogall

    chogall Senior member

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    Last time I checked, we are still in this crazy liquidity tsunami, which is not to be confused as economic recovery.

    or, DOW IS HIGHER, WE ARE ALL SAVED!!! LEVER UP AND GO FULL RETARD!!! like those 'value' investing perma bulls that got wiped in 08.
     
  17. SkinnyGoomba

    SkinnyGoomba Senior member

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    Can you tell which pair of shoes I have on today with just that post as well?
     
  18. javyn

    javyn Senior member

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    My little stock that could just broke 5 bucks on high volume. Beta over 1.5, and it's been going up the last few days in this market. Loving it. AMRN doing great too. Javyn is happy this morning.
     
    Last edited: Jun 26, 2012
  19. CYstyle

    CYstyle Senior member

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    Dark brown brogues.
     
  20. javyn

    javyn Senior member

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    GLUU, breakout!
     

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