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Old 01-11-2016, 03:38 PM   #661
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I think what Aja is saying it is all about proper timing and quality of company. A person better be very good at a minimum of understanding the debt loads, capital structure, maturity dates, ability to rollover debt, etc...A lot of moving parts. Check bond prices of issues in relation to par... Those can be very telling and the storm may not be ridden out in the wrong company.
KMI is a perfect example of people going in on a company with limited knowledge and understanding of the situation. People were buying that thing hard while it kept dropping from the 30s and into the 20s just knowing that dividend was "secure and going to grow". Well Mr. Market didnt think so and proved it....Is it a good buy now? I dunno and doubt if I ever do.


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I do think KMI is a good buy now and have been buying it at the current price level -- owned a bit before the bottom but much more after the drop. They did cut the div more than I expected but I am fine with what they did as the cash flow is going to growth which will increase future earnings and divs.

Like you, I don't require investment returns for living expenses so I am not as risk averse as many folks but have done very well with my investing style since retiring. I do like to see fear in the market and/or specific sectors as that provides the opportunity to find oversold quality equities.
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Old 01-11-2016, 03:44 PM   #662
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I do think KMI is a good buy now and have been buying it at the current price level -- owned a bit before the bottom but much more after the drop. They did cut the div more than I expected but I am fine with what they did as the cash flow is going to growth which will increase future earnings and divs.



Like you, I don't require investment returns for living expenses so I am not as risk averse as many folks but have done very well with my investing style since retiring. I do like to see fear in the market and/or specific sectors as that provides the opportunity to find oversold quality equities.

I am Captain Obvious with critiquing someones common stock purchases as it takes the earth to move for me to have the courage to do it. But I sure as heck would rather own it at the price point you got it than the ones that did 6 months ago.


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Old 01-11-2016, 03:55 PM   #663
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If you have deep pockets, is it not better to buy assets when they are on sale? Of course, I realize no one knows where oil/gas prices will be in the near term but there still seem to be a few folks that don't think everything related to oil/gas is going to zero (and stay there).
Depends on the assets. Gas producing assets are pretty much a U.S. locked business. We have more gas shut in in the U.S. than ever before and not enough customers, probably for decades to come. It's not like crude oil where the pricing market is worldwide. Loading up on low BTU natural gas may get you bankrupt if you end up facing increasing production costs and stagnant margins. Not that all deals are bad, but these times are very risky in the gas business. Ask Chesapeake and Southwestern Energy how it's going for them.
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Old 01-11-2016, 03:58 PM   #664
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Saudis and their closest allies UAE, Qatar, Kuwait etc are creating huge oil oversupply in order to damage their enemies economy: Iran and Russia. They have large budget deficit themselves and pulling their reserve funds but destroying enemies economy is priority for them. Of course there is Global slow down for oil demand but still I think the price drop is mainly due to Saudis policies.
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Old 01-11-2016, 04:03 PM   #665
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Depends on the assets. Gas producing assets are pretty much a U.S. locked business. We have more gas shut in in the U.S. than ever before and not enough customers, probably for decades to come. It's not like crude oil where the pricing market is worldwide. Loading up on low BTU natural gas may get you bankrupt if you end up facing increasing production costs and stagnant margins. Not that all deals are bad, but these times are very risky in the gas business. Ask Chesapeake and Southwestern Energy how it's going for them.

I swear I have read somewhere they burn off more natural gas at the source than they actually pipe...Is that true?


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Old 01-11-2016, 05:01 PM   #666
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I swear I have read somewhere they burn off more natural gas at the source than they actually pipe...Is that true?


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Flaring is happening only where there are no pipelines to bring it to market (mostly North Dakota and the Eagle Ford play in west Texas). However, North Dakota has passed rules mandating a minimum of 77% gas capture or your well will be curtailed to 200 BBL/day production, or completely shut in. This is being accomplished by the use of high tech low and high pressure flares, vapor control equipment or 98% efficiency thermal combustors.

Texas does not have this restriction and allows ground flares while wells are being brought into production but once completed, they must capture gas or only use an emergency flare.

Open flaring (uncontrolled) is becoming a thing of the past.
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Old 01-12-2016, 10:50 AM   #667
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$30.17! The $20s are imminent!
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Old 01-12-2016, 11:21 AM   #668
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My friend convinced me that we should sell our small part of Statoil two years ago. An her hunch was excellent. I need to ask her what she think about when to buy again. Not yet I'm sure.


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$30.17! The $20s are imminent!
I remember my twenties - it wasn't all bad.
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Old 01-12-2016, 11:34 AM   #669
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My friend convinced me that we should sell our small part of Statoil two years ago. An her hunch was excellent. I need to ask her what she think about when to buy again. Not yet I'm sure.




I remember my twenties - it wasn't all bad.

If you remember your twenties, Christine, you didn't play hard enough, especially the early twenties. I know mine were good because I barely remember them and that isn't because of Alzheimer's either.


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Old 01-12-2016, 05:41 PM   #670
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Today, West Texas Intermediate crude is down to $29.93/barrel, where it was in 2003.

But adjusted for cumulative inflation which is 31%, that's down to $22.8 in 2003 dollars. Aye, aye, aye...
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Old 01-12-2016, 06:19 PM   #671
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Several forecasts for oil at $20 including Goldman Sachs.

One is saying $10 may be possible.

So now it should shoot up the other way.
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Old 01-12-2016, 06:30 PM   #672
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Several forecasts for oil at $20 including Goldman Sachs.

One is saying $10 may be possible.

So now it should shoot up the other way.
From the Melbourne, Australia, Age:

Oil price slump: Let's face it, nobody knows what the hell is going on
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Old 01-12-2016, 08:21 PM   #673
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Warren is buying Philips 66

Buffett finds value as oil sinks http://www.cnbc.com/id/103299253
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Old 01-12-2016, 08:27 PM   #674
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Warren is buying Philips 66

Buffett finds value as oil sinks Buffett finds value in oil wreckage
Not a bad choice as it's a midstream and refining company that will benefit from lower crude prices.
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Old 01-13-2016, 12:49 AM   #675
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I like Marathon Petroleum as a downstream company.
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Old 01-13-2016, 01:19 PM   #676
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WOW, SDLP is trading at $2.60 now.

Everything is getting trashed.
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Old 01-13-2016, 01:56 PM   #677
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Even oil refiners are going down big time today. Valero down 9%, Tesoro down 12%. No one is immune to selling.

Is the end near? Capitulation? Buy, buy, buy?
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Old 01-13-2016, 02:07 PM   #678
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I guess if I liked oil before, I like it more now since everything oil/energy is closing in on zero. I did buy a bit today -- just cannot resist when looking out a few years (expect I have the time left to see oil much higher).
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Old 01-13-2016, 02:35 PM   #679
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I have a very small amount of dry powder but I was saving it up for taxes... Very tempted to use it and just file a tax deferral so I can save money for taxes latter on this year.

Complete bloodbath today. Even downstream like Marathon Petroleum was down almost 9%...

AMLP is down 6.27% today.

SDLP... wow, it is priced for bankruptcy.

I think I need to teach myself options so I can start hedging my long only portfolio in the future... To me oil going to $10 makes no sense at all, but damn I wish I had known how to hedge. Not that I would try to do it now. Way too late for that now.

Does anyone have a book recommendation on how to hedge your trades with shorts? I know nothing about options, but need to learn to protect myself from more stupid market panics.
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Old 01-13-2016, 03:24 PM   #680
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I'm trying to more or less ignore the oil price itself and the stock prices as indicators at this point. I think changes in supply demand, debt levels of companies and financial management matter a lot.

I think companies with the larger debt and higher cost structure are at much bigger risk to go bankrupt or be forced to sell cheaply... And I think that's what it a going to take for demand to outstrip supply... Especially if Saudi and Iran use it as a proxy battle.

I'm just glad I dont live in a country with an undiversified source of revenue... The people in those countries may have a very rough few years ahead

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