Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 02-14-2016, 06:44 AM   #841
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands
Posts: 5,948
Quote:
Originally Posted by petershk View Post
Yes
But it's perfectly possible to cut a pizza into enough slices that everyone starves .

I think the airline industry as a whole since inception is value destructive (I.e. all money invested by all airlines has returned below 0%).

I think auto is like that too.

I don't think oil is and I don't think it will be mostly because it's used up faster than it can be made. But until many companies go under I think we'll see a lot of up and down.

Sent from my HTC One_M8 using Early Retirement Forum mobile app
Agree on most the above, but I am an optimist and have worked in the oil & gas industry for 35 years and have seen a lot. I also have been wrong about my predictions a lot.

We will see more production and service companies going under, and very soon at that. Lots of reasons for that (going all in at the end of the cycle, borrowed too much, etc).

But on this comment of yours:

Quote:
I don't think oil is and I don't think it will be mostly because it's used up faster than it can be made.
(emphasis mine)

I don't believe this is the case any longer. With the advent of horizontal and directional drilling and more efficient formation fraccing, oil production operations can produce more oil (collectively, worldwide) than can be used up at this point in time. Maybe in 50 years or so, that may not be the case.
__________________

__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-14-2016, 11:57 AM   #842
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,009
Yeah but a lot of these companies which go under will come back if oil goes back up over say $70?

Banks will throw out money regardless of how much they lose this time around?
__________________

__________________
explanade is offline   Reply With Quote
Old 02-14-2016, 06:43 PM   #843
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,005
Quote:
Originally Posted by explanade View Post
Yeah but a lot of these companies which go under will come back if oil goes back up over say $70?
If by "going under"you mean bankruptcy, no they will not come back, at least not with the same capitalization. The production won't go away, but the current stockholders will no longer own it, or at least not much of it

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 02-14-2016, 11:24 PM   #844
Recycles dryer sheets
 
Join Date: Jun 2014
Posts: 426
Aja8888: yeah... you might he right .

I also think spinning up and spinning down oil operations is time and capital intensive but man... so far predictions have not played out well for me

Sent from my HTC One_M8 using Early Retirement Forum mobile app
__________________
petershk is offline   Reply With Quote
Old 02-14-2016, 11:29 PM   #845
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 3,009
I'm talking about industry professionals who are being laid off now, the ones with a lot of experience.

Also entrepreneurs.

If smaller companies failed, maybe filed chapter 11, could they start new cos. for the next black gold rush?

Heard of one man operators hauling drilling or other equipment from TX to Dakota and making a mint leasing it.

Or there was the story of these brothers who sold their small contractor company because they were instrumental in developing the fracking method or fluid. Supposedly made a couple of billion in their 60s.

They became well known when they donated like $15 million to Ted Cruz last year, when Cruz was struggling to stay alive.
__________________
explanade is offline   Reply With Quote
Old 02-16-2016, 11:31 AM   #846
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 597
Looks like we might be at the very beginning of a turnaround. I think this announcement will help stabilize the oil price and allow the excess to get worked off gradually.

Saudis and Russia agree oil output freeze, Iran still an obstacle | Reuters
__________________
ESRwannabe is offline   Reply With Quote
Old 02-16-2016, 11:39 AM   #847
Moderator Emeritus
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands
Posts: 5,948
Quote:
Originally Posted by ESRwannabe View Post
Looks like we might be at the very beginning of a turnaround. I think this announcement will help stabilize the oil price and allow the excess to get worked off gradually.

Saudis and Russia agree oil output freeze, Iran still an obstacle | Reuters
No talks with Iran. That's the fly in the pudding. Plus, there will be others selling when any price movement is up (US producers included). Don't bet on this being the so called oil price bottom.
__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Old 02-16-2016, 11:52 AM   #848
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 597
Quote:
Originally Posted by aja8888 View Post
No talks with Iran. That's the fly in the pudding. Plus, there will be others selling when any price movement is up (US producers included). Don't bet on this being the so called oil price bottom.
More info:

Oil Freeze: Iraq Ready to Cap Output, Iran to Maintain Share - Bloomberg Business

Saudi Oil Minister Signals More Action May Follow Output Freeze
__________________
ESRwannabe is offline   Reply With Quote
Old 02-16-2016, 01:51 PM   #849
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,005
From your second reference above:

“The reason we agreed to a potential freeze of production is simply the beginning of a process to to asses in the next few months and decide whether we need other steps to stabilize the market,” Ali Naimi said after meeting the Russian, Qatari and Venezuelan oil ministers in Doha. “We want a stable oil price.” This is the first time I have seen him refer to "stabilizing the oil price", other than to say no way were the Saudis going to do that, in any degree. There is always a reason for investors to keep on doing whatever seems to be the trend, but there are limits to all trends.

Jeremy Grantham who has had real-time documented out-performance over many years, said in his last letter that if the Saudi's were acting out of economic motivation when they elected to keep up production that he considered that they made a monumental miscalculation. He allowed that their motivation might have been political, which in any case we cannot talk about here. Also i don't have the understanding that would be necessary to intelligently discuss politics in the region.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 02-17-2016, 06:22 AM   #850
gone traveling
 
Join Date: Oct 2007
Posts: 1,135
Buffett buys into KMI ...
__________________
papadad111 is offline   Reply With Quote
Old 02-17-2016, 07:18 AM   #851
Full time employment: Posting here.
Lakedog's Avatar
 
Join Date: May 2007
Posts: 647
Quote:
Originally Posted by papadad111 View Post
Buffett buys into KMI ...
Guess he doesn't agree that it is "on the road to disaster"...
__________________
Lakedog is offline   Reply With Quote
Old 02-17-2016, 07:57 AM   #852
Recycles dryer sheets
 
Join Date: Sep 2008
Posts: 139
Quote:
Originally Posted by papadad111 View Post
Buffett buys into KMI ...

Buffett can afford to be wrong and his STD of living will not change at all!
__________________
HF63 is offline   Reply With Quote
Old 02-17-2016, 08:11 AM   #853
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 597
Quote:
Originally Posted by papadad111 View Post
Buffett buys into KMI ...

So has David Tepper. He also bought AMLP and a few other MLPs.

Buffett And Tepper Buy Stakes In Kinder Morgan - Kinder Morgan, Inc. (NYSE:KMI) | Seeking Alpha

Tepper makes big bets in Kinder Morgan, Energy Transfer, Williams Partners

AMLP going up pretty fast this week. I think the announcement by SA and Russia may have set a floor on MLPs if not oil...

Now my problem might change into one of getting as many shares as possible while its still low... I have 19,280 shares right now.
__________________
ESRwannabe is offline   Reply With Quote
Old 02-17-2016, 10:21 AM   #854
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 597
Oil pokes above $30 after bullish comments from Iran - The United States Oil ETF, LP (NYSEARCA:USO) | Seeking Alpha

"Earlier, Iran's OPEC envoy was reported as saying it would be "illogical" for the country - just coming out of sanctions - to freeze its oil output."

"Now the country's oil minister says Iran would support any effort aimed at stabilizing oil prices - including a deal between OPEC and non-OPEC (Russia) producers."
__________________
ESRwannabe is offline   Reply With Quote
Old 02-18-2016, 03:44 PM   #855
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 597
Today was the pay date for AMLP dividend. I re-invested and purchased 600 more shares. Total is now 19,880. I may stop adding once I hit 20k, just because I am OCD about even numbers lol...

Dividend income from AMLP is almost up to $24k now. Living expenses are roughly $28k a year. I'm going to have to deal with this lack of diversification problem... My plans were to ESR at 45 (i.e. find a part-time IT job, 100% telecommute), which gives me 5 more years to diversify. I'll have 20 years vested in the pension by then as well.

I saw a video on youtube recently interviewing Billy and Akaisha (I bet many are familiar with them). They said their average expenses have been around $24k per year for the last 26 years, for both of them combined. That's very inspiring.

Here is the interview:

__________________
ESRwannabe is offline   Reply With Quote
Old 02-19-2016, 03:44 AM   #856
Recycles dryer sheets
OrcasIslandBound's Avatar
 
Join Date: Mar 2010
Location: Poway, CA
Posts: 441
I just looked up AMLP, it showed an expense rate of over 5%. I suspect this 12% sec earnings is somehow a myth. Perhaps there will be a slew of dividend cuts, or something else. Anyway I certainly don't understand this investment choice people are making.

Sent from my Nexus 4 using Early Retirement Forum mobile app
__________________
OrcasIslandBound is offline   Reply With Quote
Old 02-19-2016, 08:39 AM   #857
Recycles dryer sheets
OrcasIslandBound's Avatar
 
Join Date: Mar 2010
Location: Poway, CA
Posts: 441
O.K. I've looked at more details about AMLP. While it has an expense ratio of 5.4%, it uses most of that to cover taxes. Only about .85% is for management fees. However, it is not run as a typical ETF, but rather, as a corporation. I can't figure out, so far, if SEC oversight is the same for this sort of investment vehicle or does it have less oversight being run as a corporation?

Also, Mstar rates it as 2 stars, some reports suggest that it lags its peers by 3%. However, that appears to be to be from the convenience of this corporation taking care of all the K-1s that would be necessary, had it been a bunch of MLPs. Seems kind of attractive to me now. Not for $200K, but maybe for $10-15K size.
__________________
OrcasIslandBound is offline   Reply With Quote
Old 02-19-2016, 09:23 AM   #858
gone traveling
 
Join Date: Oct 2007
Posts: 1,135
Devon getting crushed. Cut dividend by 75% and now issuing 1.2b new equity.
__________________
papadad111 is offline   Reply With Quote
Old 02-19-2016, 10:49 AM   #859
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 597
Quote:
Originally Posted by papadad111 View Post
Devon getting crushed. Cut dividend by 75% and now issuing 1.2b new equity.
Is that an upstream company? I don't see a Devon in AMLP.

Alerian MLP ETF - AMLP - Holdings
__________________
ESRwannabe is offline   Reply With Quote
Old 02-19-2016, 10:51 AM   #860
Full time employment: Posting here.
ESRwannabe's Avatar
 
Join Date: Mar 2010
Posts: 597
Quote:
Originally Posted by OrcasIslandBound View Post
O.K. I've looked at more details about AMLP. While it has an expense ratio of 5.4%, it uses most of that to cover taxes. Only about .85% is for management fees. However, it is not run as a typical ETF, but rather, as a corporation. I can't figure out, so far, if SEC oversight is the same for this sort of investment vehicle or does it have less oversight being run as a corporation?

Also, Mstar rates it as 2 stars, some reports suggest that it lags its peers by 3%. However, that appears to be to be from the convenience of this corporation taking care of all the K-1s that would be necessary, had it been a bunch of MLPs. Seems kind of attractive to me now. Not for $200K, but maybe for $10-15K size.

Yes, the high fees are for paying taxes. If you own an ETF or a CEF (that has more than 25% in MLPs) then they have to be run as a C-corp to pay the taxes and avoid the K-1s. You can also buy an ETN which does not pay the taxes and is not a C-corp. However with an ETN you will have credit risk with the bank sponsoring it.
__________________

__________________
ESRwannabe is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 06:43 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.