With due respect foogie, giving hedging advice to Perron????
What next, golf tip's for Rory?
As a professor one said to me when I tried to BS my way through a verbal exam, "Mr. F____, how can you speak with such authority about a subject of which you know absolutely nothing?"
carl, private is on a horse all right, but it's the right horse. If mangement KNEW the rainbow was really there, at these low interest rates, they would be borrowing hand over fist to buy. Big mortgage in Colorado? Maybe California but not CO. The other excuses you give for him are baseless. I've been in Perron's situation and all the executives who KNEW overextended ourselves to buy recklessly. It was not inside information. As in this case, the public knew the facts but the sector was in a severe slump and TEMPORARILY took down the good with the bad. We KNEW we were good!
dragon, speaking of basic math:
Looking at a 25 year copper chart, the price stayed between 60 cents and $1.50 from 1989 through 2004.
The price averaged around $1. The price is now hovering around the $3 mark.
From an inflationary viewpoint, using 18 years, $1 and $3, that's about 6.2%/year, just about in line with other assets like real estate.
Based on this, "all things being equal" I would expect copper to remain around the $3 mark which is not to say that it won't dip to $2.50 based on the dozens of black swan events beyond the reach of management.
P.S. I liked your reference to the beloved Francis (who was actually Molly).
Citi has the Midcontinent properties break even at about $55 Brent, along with REP Mississippi Lime, RDS NAM Liquids and Marcellus Dry
bhaveshhpatel. There are hundreds of studies relating to converting to a Roth.
As I recall, the bottom line seems to be that if you expect your income tax rate to be lower after you retire than it is now, don't convert. If you expect the rates to be the same before and after retirement, it doesn't matter whether you convert or not. Also, remember to include the effects of the the Alternative Minimum Tax. It can be a nasty surprise. I think the AAII tax studies are a good source, although if you google," Roth: to convert or not to convert", you'll find additional sources. Every broker probably offers studies as well.
Dragon, re "And land is not portable" comment.
In Southern California:
A Chinese buyer bought the house next door to me for $8 mill cash about 15 years ago.
He left an Indonesian couple behind as caretakers. (Basically slaves.) Barely undestand English.
They only visit once a year, give a list of things to do to th caretakers and leave.
So, in this case land is portable and they benefit from the increase in US land values.
There are many transactions like this in both the the weathier and Chinese areas.
If there was a buyout leak the volume would have been triple or quadruple. Quit worrying and enjoy today's bounty.
I hope you're old enough to remember this barbershop song. "He's more to be pitied than censured...."
serious, I have a Citi chart showing that the Utica properties breakevens are between $70 and $80.
The lowest are the Marcellus at $35 to $52. Woodford looks to be about $55.
I have no informaion re Hunton and was hoping someone could fill that in.
Also corrections and comments welcomed for my other breakeven numbers.
hdd: Now I understand why everyone dislikes you. You're condescending.
First of all you didn't acknowledge that I said I understood the difference between bonds and preferred stock and then proceeded to explain it verbatim from the standard Fianance 101 class I probably took before you were born.
Aside from that the bonds you refer to are really senior secured note whose coupon is 8 5/8% with a maturity of May 2018. The preferred B's pay a dividend of 10.75%.
The current yield to maturity of the notes at the last offer price of $88.51 is 12.89%
The current yield of the B's at the last price of $18.50 is 14.53%.
Yes, if your perfect storm hits, the notes provide better protection than the B's, and the 2% is the surrent risk premium.
The $75 that you threw out was an ask not a bid. There was no transaction at that price.
Suggestion, try not to be the smartest kid in the class.
He added 250 shares for a grand purchase of $4,000. He now owns 2000 shares or $40,000.
In my book that equates to zero.
The bonds at 89 yield 9.7%. The preferred B's at 19.70 yield 13.6%, about 40% more. Further, if you bought the bonds in a taxable account, you pay the regular income tax rate for interest as opposed to the 15% dividend rate for the preferred's. I understand the difference between bonds and preferred's and required interest payments on bonds vs.the possibility of deferred dividends. However, I think the risk premium for the bonds is excessive.Since I own the B's and you own the bonds, I'd like to understand your thinking. Thanks.