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Transocean Ltd. Message Board

  • die_cheney_die die_cheney_die Jan 29, 2012 10:50 PM Flag

    Thoughts about JNBarbieri

    1. Like most (legitimate) shorts, he's put more work (if not dollars) into his position than longs have.

    2. Like most shorts, longs target him in a way that often becomes very personal, imputing all kinds of unethical and evil motivation on his part.

    3. Like most shorts, given the fact that they have more intellectual capital at stake in their position than the average "hobbyist" investor, his tendency is to "dig in" and defend positions even when the market is running against him.

    (I say this as an investor who from time to time shorts stocks. Last year I shorted NFLX @ 280-300 but unfortunately covered @ 215-230. Currently I'm long SHLD March 40 puts.

    (I will also add that longs can become just as emotionally entwined with losing positions, albeit with less intellectual underpinnings to their stubbornness.)

    Having said all that, I'll just mention that I began buying RIG as a trade in the low 40s in December and own some as low as 39. Now that the facts on the ground are moving in RIG's direction, of course I am compelled to do what any trader with sense would do, namely press. I added heavily on Friday.

    P.S. For ANYONE in this game, I strong recommend reading "Reminiscences of a Stock Operator." It was published over 80 years ago but it will tell you just about everything you need to know about trading and its most important element: knowing yourself.

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    • for Liability & Property (Excluding Windstorm)

    • where'd you get the $4.2 billion number from....and CWA does not invoke the concepts of compensatory or punitive damages....CWA Section 311 has "penalties" for a discharge and enhanced penalties triggered by gross negligence or willful conduct.....the CWA penalties are $5 billion, enhanced are $20 billion.....BP gets a credit for their recovery of 1 million barrels....

      let's try to get the terminology and numbers clear or the whole discussion is ridiculous.

    • You forget that the $4.2 Billion in punitive damages including the CWA, if not shouldered by BP alone, will be distributed among at least 4 companies, not just RIG. And RIG's insurance is enough to cover whatever that is. Now, go back and do due diligence.

    • isn't the insurance capped?

      1:1 ratio of punitive to compensatory (Exxon Valdez case) means 12-15 billion in punitive damages....covers all punitive damages? not a chance....

      besides, willful misconduct proof means the insurer (guarantor) can seek reimbursement for all OPA-originated claims from the spill fund i.e. all compensatory damages and punitive damages.....and I think you can guess what happens next....

      good luck, try doing some due diligence...

    • Are u STUPID? Their insurance will cover all those punitive damages PERIOD. You've lost. It's over - give it up JESUS!

    • Appreciate the recommendation, I just ordered Reminiscences of a Stock Operator by Edwin Lefevre.

    • Oh, I forgot to add, as to my Schwab account: I didn’t create the higher level trading profile (which requires sending in a form), not because I’m not qualified based on my background, but precisely the opposite, I have those very skills, lots of accounting, plenty of calculus, econometrics, financial analysis, CFA training, etc. and therefore would be tempted to test my skills against everyone else. I watch CNBC and am perfectly capable of understanding the risk/reward outcomes of that midday trading segment. I know what a straddle is, a ladder, so on, my professional life is back-office treasury operations and risk management. Heck, I can teach VaR, and have implemented Quantitative Risk Management software….I’m trained, but I also know that my competitive nature would tempt me into playing in this Casino we call the Stock Market….and that is not a good idea. (You can assume, I’ve never been to a strip bar either.)

    • For those of you who seem to be obsessed with speculating about me and my motivations….. I retired at 50 from the World Bank (as a Senior Financial Officer) and I do consulting work from time-to-time. I own a townhouse here in DC, I’ve made (and saved) plenty of money and I do have lots of time on my hands, and I’m more likely in the 1% than the 99%, though I love stopping by McPherson Square (Occupy DC tents fill the park) on the way to the LOC….they have my support, 100%...

      Why RIG? I have significant experience with the international treaty that parallels OPA, so I know OPA inside-out. Once the Horizon went down I followed every aspect of this case, listened/watched the Coast Guard proceedings, “indexed” all the testimony. I’ve got an extensive file and I know what I would do if I were the lead attorney for the plaintiff. It seems obvious really.

      As to your preoccupation with my motivations or that I’m short the stock and “talking” my own portfolio….you can’t really believe that I’d assume that any of you are big enough individually or collectively to move the needle. Even if I had control of all the money of all the accounts of all the people on this message board, I could not possibly move the stock in the direction that I wanted it to move.

      My goal, as previously stated is to prevent those people who can be influenced from making a serious mistake based on your incessant cheerleading about this company. RIG management likes to blow their own horn with that “best practice” or “best of breed” rhetoric. They are actually the worst, and their failure to recognize their shortcomings is a big problem for longs.

      There is extreme risk in RIG. I would never trade in a company whose employees have been killed through their own misbehavior. That speaks for itself. I have no idea how this will eventually turnout, but I know enough to recognize the situation that Nassim Taleb has effectively described in “Fooled by Randomness” (which is better than “Black Swan” and predated it)….you are picking up pennies in front of a steamroller (you know that machine that presses the hot asphalt)….you do not understand the risks that you are facing.

      I predicted a long time ago that RIG would settle for 3-4 billion. Rumor is BP offered 4.5, no indication of a RIG counteroffer, which seems strange. So the first order of business is to analyze the balance sheet. What is the impact of settling for $4 billion? to the dividend, to cash, more dilution necessary, etc. More importantly, because RIG seems to be “rolling the dice” as I stated on several occasions, what is the impact of not settling. What’s the “worst case” scenario? I’ve already stated that I can make the case for RIG being hit with a $9 billion total bill….that’s 15% of 60 billion. Not unthinkable. And what would that do to the valuation. My guess is the market has already priced-in a large part of the BP settlement offer, so I don’t expect the stock to fall that far unless there is new information, like a criminal prosecution, which would increase the probability of “willful misconduct” being proved in the civil case.

      Well good luck traders.

      • 3 Replies to jnbarbieri
      • That's actually the best post I have ever read from you. Maybe I was wrong about you after all.....

      • "My goal, as previously stated is to prevent those people who can be influenced from making a serious mistake based on your incessant cheerleading about this company." Couldn't have said it any better myself. I worked for them for the most part of my career so like to think I know what I am talking about, and am sad to see what was once a great company being run into the ground.

      • You keep saying RIG should have settled with BP. What would RIG gain by paying money to BP? Certainly not protection from fines or penalties, as they can't be indemnified against (just ask Cameron). And unless RIG is found guilty of WM, which is not the slam dunk you think it is, RIG won't owe BP anything. BP, on the other hand, will have to indemnify RIG against compensatory damages and reimburse RIG for its defense expenses if RIG's fault is determined to be merely negligence or even GN. And, if BP's conduct is found to be WM, RIG might argue that BP owes RIG for the loss of the valuable drilling platform. So what's in it for RIG to settle with BP?

    • Good post, good thoughts and definetly "Reminiscences of a Stock Operator" is a great investment book to read. GLTA

    • I bought in at 48.75. Please tell me I can at least get a few pennies out of this position.

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