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Old 12-11-2014, 08:26 PM   #61
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Warren Buffett buys high, sells low

Mr. B confesses...to irrational exuberance? in re: ConocoPhillips

https://finance.yahoo.com/news/warre...005658480.html

I just bought more COSWF (Canadian Oil Sands).

If I had a little more scratch, I would buy more KMI, Suncor and LNCO. If our HELOC comes through, I will.

(11 weeks to go!)
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Old 12-11-2014, 08:41 PM   #62
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Originally Posted by Ed_The_Gypsy View Post
Mr. B confesses...to irrational exuberance? in re: ConocoPhillips

https://finance.yahoo.com/news/warre...005658480.html

I just bought more COSWF (Canadian Oil Sands).

If I had a little more scratch, I would buy more KMI, Suncor and LNCO. If our HELOC comes through, I will.

(11 weeks to go!)
Is this a joke or are you serious?

KMI?
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Old 12-11-2014, 09:05 PM   #63
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I think not actually, the knowledge was there that we had subprime loans, the fact they were rated AAA when sold in collaterized form had no impact on the eventual outcome, what the issue was they became worthless for a value of 1.3 trillion. ......
Except that those "AAA" instruments back then were often held as conservative and "safe" investments. Even as money-market substitutes. The money lost was not money anyone expected to lose, or at least not lose so quickly. Credit markets temporarily got badly squeezed as a result. As courts have found since, there was an aspect of fraud in how some of these securities were marketed.
I see junk bonds today as a different situation. Junk bonds are labeled as such. They are (or at least SHOULD be) held by investors/institutions prepared to lose money if economic conditions worsen. I see no evidence that most junk today is being held as "conservative" assets like too many of those repackaged subprime instruments were back then. Even if all those oil drillers' junk bonds became worthless I do not see how it would collapse the financial markets. The US stock market alone (not inc privately held companies nor bond market) is over $US 20 trillion. No one is predicting the sky will be falling if the S&P 500 suffered a 5% correction.
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Old 12-12-2014, 08:03 AM   #64
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Is this a joke or are you serious?

KMI?
I am adding to KMI as it drops. KMI earnings are not dependent on high oil prices as the business is moving products, not producing. The CEO just reaffirmed that the annual div will go from the current $1.76 to $2.00 in 2015.
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Old 12-12-2014, 09:21 AM   #65
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Fermion, interested in your take. (I thought I would get razzed about LNCO!)

I stretched today and bought SU and LNCO. Not KMI yet.

Talk to me.
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Old 12-12-2014, 09:34 AM   #66
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Fermion, interested in your take. (I thought I would get razzed about LNCO!)

I stretched today and bought SU and LNCO. Not KMI yet.

Talk to me.
What do I know, I tried to short Exxon yesterday when it spiked to $91.50 by buying April $95 puts and selling Feb $90 puts for a price of $3.50. It would have filled at $3.55 but I wanted $3.50. One day later and that spread is worth $4.40.

Sigh.

My take is if you want to play the oil rebound, buy the drillers. They have been absolutely crushed. I don't know how this has played out yet but I think Exxon is overvalued at this level even though they do make good money on refining. I really expect Exxon to fall to the $75 or $80 range soon if the oil slide continues.
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Old 12-12-2014, 09:45 AM   #67
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What do I know, I tried to short Exxon yesterday when it spiked to $91.50 by buying April $95 puts and selling Feb $90 puts for a price of $3.50. It would have filled at $3.55 but I wanted $3.50. One day later and that spread is worth $4.40.

Sigh.

My take is if you want to play the oil rebound, buy the drillers. They have been absolutely crushed. I don't know how this has played out yet but I think Exxon is overvalued at this level even though they do make good money on refining. I really expect Exxon to fall to the $75 or $80 range soon if the oil slide continues.
For now, the offshore drillers are really in a pickle. Rig is under $20 and if oil stays low, say under $60, they and other offshore drillers have a big problem. I suspect RIG will dump the dividend soon.
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Old 12-12-2014, 09:51 AM   #68
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Yes, if I were buying a driller right now it would be Seadrill. They have already done the pain of dividend cut (actual elimination) and they have contracts booked at the higher day rates for 2015 and some of 2016. A majority shareholder John Fredrickson has purchased a ton of shares at $28 and $12 but you can buy the stock today for $11.


It is unlikely they would go under until 2017, which gives you a lot of time for this mess to rebound. If they resumed even half the dividend it would be a near 20% payout.
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Old 12-12-2014, 10:00 AM   #69
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Yes, if I were buying a driller right now it would be Seadrill. They have already done the pain of dividend cut (actual elimination) and they have contracts booked at the higher day rates for 2015 and some of 2016. A majority shareholder John Fredrickson has purchased a ton of shares at $28 and $12 but you can buy the stock today for $11.


It is unlikely they would go under until 2017, which gives you a lot of time for this mess to rebound. If they resumed even half the dividend it would be a near 20% payout.
Seadrill was mentioned last night on Fast Money by one of the talking heads as the way to go, especially if RIG cuts its dividend.
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Old 12-12-2014, 10:02 AM   #70
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What do I know, I tried to short Exxon yesterday when it spiked to $91.50 by buying April $95 puts and selling Feb $90 puts for a price of $3.50. It would have filled at $3.55 but I wanted $3.50. One day later and that spread is worth $4.40.

Sigh.

My take is if you want to play the oil rebound, buy the drillers. They have been absolutely crushed. I don't know how this has played out yet but I think Exxon is overvalued at this level even though they do make good money on refining. I really expect Exxon to fall to the $75 or $80 range soon if the oil slide continues.
I like XOM, but there is never any weakness in their share price. I worked on a project with them years ago and they KNOW how to run this business.
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Old 12-12-2014, 10:46 AM   #71
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I like XOM, but there is never any weakness in their share price. I worked on a project with them years ago and they KNOW how to run this business.

I know what you mean. My gambling money has been zeroed in on oil the past few months specifically Exxon, but I think I am throwing in towel on them. Peak to trough XOM down 15%, while CVX is down 23%, and RDS 27%. I want oil to drop some more then probably just split up the gambling money between SU and the XLE. Drillers are way to speculative even for my gambling money.


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Old 12-12-2014, 01:48 PM   #72
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Certainly some weakness in Exxon today. Damn I missed the boat on those puts.

Funny that I can always convince myself to go long but have the hardest time going short anything.
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Old 12-12-2014, 02:38 PM   #73
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I'm convinced there are spectacular deals out there. I figured RSX is a raging deal, but, only voted with 1% of my dollars early in the week. Down 10%, so far. Now I'm convinced I'm (we are?) way too early to the party when it comes to Oil and/or Ruble collapse. A double whammy collapse? Yes, but oil was just irrationally exhuberant for so long that I'm sure the yo-yo will swing way too far down before it stabilizes.

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Old 12-12-2014, 02:47 PM   #74
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There are plans to develop an oil shale field just south of us in Mexico, that is three times the size of the Eagle Ford Shale field. We are expecting corporate operations to be set up in our area just north of the border.

They have some serious security issues to clean up first. Maybe they can hire those private contractors that went into Afghanistan. It will take something like that because it's pretty lawless down there and the bad guys are heavily armed.
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Old 12-12-2014, 03:02 PM   #75
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I'm convinced there are spectacular deals out there. I figured RSX is a raging deal, but, only voted with 1% of my dollars early in the week. Down 10%, so far. Now I'm convinced I'm (we are?) way too early to the party when it comes to Oil and/or Ruble collapse. A double whammy collapse? Yes, but oil was just irrationally exhuberant for so long that I'm sure the yo-yo will swing way too far down before it stabilizes.

-CC
I keep looking at RSX among other things but have been [luckily it turns out] too gun shy to pull the trigger. Next week will likely see me dipping my toe into these waters...unless I chicken out again.
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Old 12-12-2014, 03:09 PM   #76
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I keep looking at RSX among other things but have been [luckily it turns out] too gun shy to pull the trigger. Next week will likely see me dipping my toe into these waters...unless I chicken out again.
I think you are smart to hold back, I think their is still more bad to come. Opec is playing a dangerous game. If they don't get what they want, I could even see them falling apart. I forget the economist, but at the time Opec a leading economist and game theorist said it couldn't last. That he was wrong changed economic theory.

That their market share has become so much smaller they may not be able to maintain the cartel collaboration now that the collusion reward is eroding as others enter the market.

Certainly interesting times ahead. If they break, I pray for the poor souls living in the Mideast - terrible things will happen to them, just terrible.
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Old 12-12-2014, 03:13 PM   #77
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Certainly interesting times ahead. If they break, I pray for the poor souls living in the Mideast - terrible things will happen to them, just terrible.
Why is that? Certainly they have used the past 50 or so years of generous oil profits to develop other industries such that they are not relying on oil money for the economy?
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Old 12-12-2014, 03:17 PM   #78
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I think you are smart to hold back, I think their is still more bad to come. Opec is playing a dangerous game. If they don't get what they want, I could even see them falling apart. I forget the economist, but at the time Opec a leading economist and game theorist said it couldn't last. That he was wrong changed economic theory.

That their market share has become so much smaller they may not be able to maintain the cartel collaboration now that the collusion reward is eroding as others enter the market.

Certainly interesting times ahead. If they break, I pray for the poor souls living in the Mideast - terrible things will happen to them, just terrible.
Here is an Opinion article regarding the future of OPEC : It's time for OPEC to surrender

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OPEC the cartel that used to bully superpowers, unnerve financial markets, and bilk drivers throughout the world is clinically dead.
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Old 12-12-2014, 06:06 PM   #79
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Why is that? Certainly they have used the past 50 or so years of generous oil profits to develop other industries such that they are not relying on oil money for the economy?

Hoping that was sarcasm.


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Old 12-12-2014, 06:33 PM   #80
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My DH inherited a lot of XOM last year. We weren't comfortable having nearly one-fourth of our net worth in a single stock -- even Exxon! -- but by the time we could sell it, it had appreciated a great deal & we didn't want the large cap gains hit.

So we held on to it, figuring heck, worse that could happen is it would keep going up. But with today's price drop it was back down to the inheritance price, and we sold about half of it. Debating whether to sell more, or to hang on to it, we'll see what transpires.

At some point we'll probably put the proceeds in a total stock mtk etf (VTI), much more our speed.
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