Now all we will hear for the next few days is Alibaba. Although some think Scotland is a big deal, with a GDP of $200 billion, doesn't seem significant, just don't interrupt the Scotch exports. What do they call Scotch that is distilled in the US. Alibaba is easy for me although the China market is huge. But you don't have the rule of law protection. Could be an interim top for tech??? Or a catalyst for the whole market???
Jerry, will read it, thanks for mentioning it.
As for forecasting, the Fed is no better than you and I, in other words, it's a #$%$ shoot. Too many are still afraid of the Fed balance sheet and interest rates getting out of control, the longer the work out takes, the better off we will be. And we are still the best of the global bunch, Europe is a basket case. The talking heads will give us a consensus soon, just not sure it will be accurate. I did trade some PAGP for WMB today, I like both but think WMB may have more upside sooner, but who knows, a big deal at PAA would move PAGP to $40+ quickly. I thought about buying KMI but think the other two have more upside.
Listened to some of Yellen's comments. Projecting 3.75% Fed funds rate and inflation up to 2% limit by 17. Try to forecast the price of oil and gas in 17, good luck. What happens when inflation stays low and unemployment higher than expected, my belief is technology and global competition will moderate both. Seems the more important question is the 10 yr T note yield longer term, my guess is 3% or there abouts. Seems the focus on the Fed, the "don't fight the fed", is an old playbook. Now, would say the Fed is largely irrelevant. And the US stocks that focus on global demand remain the best bet around. 2800 S and P 500 in two years.
CPI under control, down .2%. Not sure inflation will be an issue for a while. See if Fed chair says anything significant. Our life depends on "considerable time" phrase, seems silly. Don't think this changes the bullish market outlook for the near future. Can look forward to q 3 earnings.
Hedge funds are mediocre investments imo. And they have become the market. Maybe has helped the small investor with volatility and we can invest in smaller cos that they can't begin to buy. Same could be said for private equity, has become too big to really outperform the market. We should be beating the market every year and you don't have to give up 2 and 20% or whatever the going rate is currently. They all want to go public now. Buyer beware.
Calpers eliminating hedge funds from their investment mix, $4 billion reallocated. My guess is this becomes a trend. Too much money, too little op for the couple of trillion in funds. Has taken some volatility out of the market.
Don, thanks, interesting data. I think the best geology should prevail, not a revelation but still think PDCE with Wattenberg, 70% returns and Utica Condensate and Wet Gas, as much as or up to 100%, has to do well. Those two plays are at the top of the returns list, along with the super Marcellus. NBL for the same reasons, Wattenberg and Utica, and some offshore and international, well run company. GPOR also a good bet. For the Permian, you could probably cover it with PXD. But I almost bought AREX today, the returns aren't as good as No Midland but terribly cheap, same for EPE. Still like SN for the EF and TMS. You know the Bakken a lot better than me but OAS is well run. And then you have EOG, which would cover a bunch of plays, ex the NE. I'm fully invested, actually 103% long. But it's the infrastructure plays primarily, you don't have quite the volatility as you do with the e and p s. Bought more PAGP for a sector consolidation. Have been thinking about KMI, where can you find a 5%+ yield on next year's div and growth the co projects at 10% per year to '20. And if we do have LNG exports and supply shortages, KMI's pipe franchise will make a fortune. Also have been buying CEQP, they will hook up with someone, a la Crosstex. My favorite is still Williams but I own too much of it, 15% div growth for the next few years. And Range at some point will print money when gas prices respond to LNG exports, but that could be a few years away.
Thinking about the abundance of nat gas in this country and the supply, demand balance over the next few years, not sure that KMI isn't the best bet to play this growth. Their pipe network is the best, good management and it will pay $2 div next year, 5.2% yield. And they have a great CO2 business. DNR doesn't measure up to KMI's opp. I would bet that at some point KMI spins the COs business in an MLP. Smart management that isn't sitting on its rear, DNR???
Don, from a Forbes article just out. You can google the whole thing but sounds fairly bullish, calls it compelling. 400 to 2500 units should make it a great long term bet. I'm high on the menu and food and it really doesn't have a close competitor. A sit down fast casual that's fairly healthy.
Noodles’ enterprise multiple is 10.3, nearly its lowest point since the company’s IPO. However, calling the company “one of the best growth stories in the restaurant sector,” Siegner said that not only is it a compelling value (in light of the company’s long-term earnings targets), but it’s also a value that isn’t consistent with the
company’s unit growth. Noodles’ 14% unit growth and 10.3 enterprise multiple compares favorably to Chipotle’s 12% growth and 21.3 multiple, Burger King’s 5% unit growth and 17.7 enterprise multiple and Sonic’s 1% growth and 10.5 multiple.
I think your comparison to DNR is a good one, DNR is a mid $20s value, but they've billed themselves as a yield play, that doesn't work imo. KMI is yielding 5% on next year's forecast.
This slide in oil could continue for a while. But it wouldn't take much to reverse it. The lack of a market here is a problem for WTI.
Birdog, EXXI looks really cheap at $14.50. PV10 value is $7.2 billion vs $5.2 billion EV. Lots of potential, 75% oil. Would you buy them again. Probably have to hold a couple of years. Just appreciation to PV 10 no gets you a $30+ value.
Don, clouds have parted and there is snow on the mountains, Trail Ridge Road is closed. Forecast to be 30 degrees tomorrow. Aspens are turning and the elk are beginning to do their thing.
Don, didn't see that, thanks. I've decided to stay with it long term. They need a good report this quarter, same store sales need to be positive, 2% range for it to keep moving, imo.
Looked at an interesting report on nat gas supply/demand to '20. NE supply has gone from 5bcf/d in '12 to projected 32bcf/d in '20. Pipes don't catch up with supply until '17. But project 90bcf/d supply in '20 and 5bcf/d potential shortage. The rest of the country demand is growing 3x the supply growth in the NE. LNG, exports to Mexico and Canada, power generation. $100 billion of export, chemical projects on the GC to '20, 85k jobs building the facilities. The ng infrastructure cos should do well for a few more years. And the oil infrastructure cos as well. The US gas discount to global prices is 1/3 of the trade deficit. Still think this revolution is as big as the social media, Apple/smart phone phenom and maybe more long lasting. Still think Williams might be one of the easiest bets on this growth, and it yields around 4% now. EPD, KMI, ETE will be continue to be winners as well.
CS put out a note on ALJ, expects approval of rail loading facility at Bakersfield. Sum of parts value $24 after. With advantaged crude price, ALJ looks like a fairly good bet for next couple of years.