Great call and great timing. It's up about 10% from the Monday following your post. Let us know when you become a "strong buyer" so that we can sell and/or write protective calls.
Thanks in anticipation.
I don't mean to brag, but my proprietary strategy is to buy low and sell high. If you want to use my method you'll need to pay a subscription fee to get the special access code number. A first step for those who can't pony up the fee is to listen carefully to Jim Cramer. Whatever he recommends you do, don't.
On Yahoo all the great traders discuss the profitable trades they did in the past tense. Amazing how the history they cite always caught the highs and lows just right. But somehow the trades that go horribly wrong in the present tense are ignored in favor of the imaginary revisionist history lessons. Save your tall tales for mom and dad. I'm sure they still think you're special, but no else really cares (or believes you).
Don't give up your paper route.
Thanks. It's painful watching prices drop daily, so my post is as much a reminder to myself as anyone else. And today's jump in most of the stocks in this sector, although short-lived for some names, is evidence that there is money waiting to get in. I even managed to buy some Jan '16 calls on SDRL and LNCO close to their recent bottoms. Probably still some gut-wrenching volatility ahead, but it will pan out positively for the patient.
Yes, tankers will still be needed and higher regulatory demands will still need to be met by having existing equipment refitted or replaced and GBX is about a lot more than just oil tankers. GBX's customers do not make capex decisions with a view to the next 2 or 3 months or because of volatile commodity price swings. Undoubtedly short term pain, but it's mostly caused by Mr. Market being irrational, not by anything fundamental with regards the company.
Patience will be rewarded, but for many "investors" patience is in short supply.
Yes, everyone can quote the "When there's blood in the street ..." saying,but then when facing such situations most people still (understandably) panic. Oil production is not going to go away. The drive to achieve some level of US energy independence is not going to evaporate. Well managed companies will weather the short term damage and keep on producing. Companies with valuable but under-valued assets will probably get bought out by those who can cut production costs and finance their positions more easily.
Even with all the lower expectations for demand, the disparity between supply and demand is not that great going forward. Despite Bobblehead "experts" like Gartman, most predictions for oil prices, even in 2015, are in the $70's and heading back into the $80's and $90s further forward. A lot of the current pain is being engineered and/or a consequence of flushing out those unable to maintain their long positions (or intentionally driving down prices). Prices will probably rise more slowly than they dropped, but momentum works both ways and you can be certain the big players are positioning themselves to profit when it happens ... and probably will be just as vocal about how high oil can go then when it works to their advantage ... maybe even the Bobblehead is talking his own book.
"not a dead cat bounce"
I think you realistically need to be prepared for volatility and a fundamental misunderstanding of GBX's value for awhile, but the cat has not died.
undoubtedly some debt holders including, once again, some backs will take a hit, but unlike some home mortgage holders, oil companies are not going to walk away from their assets and debt holders are far more likely to let the status quo go on, collecting debt servicing fees/ interest payments along the way, rather than foreclose. Common shareholders will get screwed in the cases of over-leveraged companies, but acquisitions and mergers will probably pull the moderately unprofitable companies out of total collapse and the debt holders will walk away with deals that are not total disasters.
No one can say when oil prices will bottom or how long they will stay low, but the energy sector is not going to disappear and price will eventually revert to mean or higher. All markets over react and panic (with the assistance of self-serving manipulators) going up and coming down.
Speculating that Warren might buy something is fun for the whole family, but also seems to put a jinx on it ever happening. Aside from that he tends to pay bottom dollar and/or extract concessions that benefit his shareholders more than those of the acquired company.
Nice idea, but Yahoo shows a price target consensus of $74 and the current price is $45 per share. A 20% premium to the current price would be $54. Would that make everyone happy assuming there is some validity to the target price?
For oil and gas prices, our forecasts use prices based on Nymex futures contracts for 2014-16 and our own midcycle price assumptions for 2017-18. For Brent oil pricing we use $102 per barrel in 2014, $73 in 2015, $78 in 2016, and $85 in 2017 and $100 in 2018.
We expect WTI oil pricing to average $96 per barrel in 2014, $67 in 2015, $70 in 2016, $77 in 2017, and $90 in 2018.
We forecast Henry Hub natural gas (U.S.) at $4.31 per Mcf in 2014, $3.79 in 2015, $3.89 in 2016, $4.35 in 2017, and $5.40 in 2018.
Most every stock he has commented on he's made a buy, hold & sell recommendation at one time or another. Whatever happens he can cherry pick which of his prescient calls to remind everyone about and ignore the others.
It does seem "odd" that HK has experienced a bit of a lift even when stronger players are getting knee-capped everyday. Not speculating on some major event, but there does seem to be a surprising, renewed interest in the stock.
The reason they're (some of them) multi-millionaires is because they don't throw money around willy-nilly. If they believed the ship was sinking they'd be smuggling stationary supplies out in their briefcases, not throwing away cash to impress the peasants.
"When investors say they are mining for gold by dumping their money into Puts ..."
I'm guessing HolyWallSt is going to be in a house of pain, although I doubt that he's doing what he claims. "I am bringing in more cash to my broker..." sounds like he carries his net worth in a brown paper sack.
Dennis Gartman was on Fast Money predicting much lower oil prices, so they should start heading up or at least hold here. Someone could write a book filled with Dennis' predictions that went wrong.
Call options out further than the next few weeks are still attracting good bids. Baird upgraded the stock and Wunderlich reiterated. Obviously a lot of volatility to live through in the short-term, but in the long term the chart will run from the lower left to the upper right. Trying to trade this in the short term is only for the swift & nimble, neither of which describes H.W.S.
Given the CEO's successful track record (until now) and connections, he could very well be looking to shop the whole mess around, but at current distressed fire sale prices, whatever the debt holders get will definitely, as you say, wipe out the common and take its toll on those who bought the debt at nearer face value.
His past success at developing and selling off similar ventures, like that of Ed Lampert & Sears Holding, sucked in a lot of people who thought history would go on repeating itself. Exogenous political and economic events have a way of humbling the wunderkind.
"Exactly. If oil continues to slide ..."
In other words you have no understanding of what GBX does and also assume railroads make capex decisions based on short-term commodity price swings and that the government will ignore the need to meet safety upgrades and shipping (anything) by rail is in inevitable, unavoidable decline.
Your insight is awesome. Keep you day job.
" turn up the heat in the house"
Yes because if you set the thermostat at 68 in warmer weather you need to set it at 72 in colder weather. The mind boggles.
Agree. I'm still long some April calls only because selling them now would generate next to nothing and I suppose they represent a very, very long shot bet on a three-legged horse.
One thing I learned from this is to never listen to anything that Stephen Weiss says on Fast Money. I was impressed by his enthusiasm for HK earlier in the year ... not impressed enough to buy the stock, just some calls as an admittedly risky "gamble" ... but Weiss seems to be motivated far more by emotions than analysis. Wouldn't be surprised to find a Magic 8-ball or Ouija board at his desk.
Have occasionally had some profitable inspiration from some things touted on Fast Money, but now consider Weiss a babbling moron.
"any one can help me"
I doubt it, but listen_joker and you are kindred souls ... if not the same person.