And they wouldn't be on CNBC. The more I listen, the more I'm convinced that those conversations distract individuals from making good long term investments. One fact you can't ignore is the 10 yr T note is at 1.6% and the S and P 500 yield is 2%+. It doesn't take a genius to figure out where the money will go assuming the differential doesn't change for a while. And even a move up would probably drive more money into stocks, vs bonds. And the central banks are racing to see who can print money faster. It blows up, just don't think anyone is smart enough to say when, could be years from now. Or we get the next black swan completely unrelated to the current fears, that would be my guess.
Apple yields 3%, generates $50 billion of annual cash flow, has $150 billion of cash. Suncor announced a 50% hike in the dividend, will buy back stock, a 7% return of cash to shareholders. OXY is up a bunch and will probably restructure further. There seem to be opps in the market even with all of the negative pundit noise.
Seems the Permian will be busy for years, same as your neck of the woods.
When I turn on the CNBC noise, blah, blah, blah, "new normal", "central banks printing money", blah, blah, blah, "jobs bad, housing good", blah, blah, blah, "Europe malaise", "China slowdown", "sell in May", "market corrects"..... Seems the noise has been the same for a couple of years, I would bet if I turned it off for a couple of years, would still hear the same things when I turned it on again. Still some buys out there but maybe not the "market".
On the "sell in May" phenom, Hulbert said if I heard correctly that he looked at data back to the 17th century. Can't beat that, sell today and buy back on Halloween.
Midstates Petroleum Company, Inc. (“Midstates” or the “Company”) (MPO) announced today that its first quarter 2013 earnings release will be issued on Monday, May 6, 2013 after the close of trading on the NYSE. The Company will host a conference call to discuss first quarter results the following morning, Tuesday, May 7, 2013 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time).
Listening to Gary Kaminsky, the CNBC guy that went to Morgan Stanley. He now talks about what they offer, "asset allocation models" and "thematic" recommendations. They come up with these and the thousands of reps sell the macro calls, no wonder their individual investors don't ever beat the market. Would just like to hear of a few companies that will double in value in the next three years. What you get instead is bs about asset allocation and themes, which are usually wrong. I left MS years ago, when the CEO said that frankly they didn't care that much about the retail investor, kind of knew that was the case, but couldn't believe he said it. Kaminsky seemed a straight shooter before he went over to the dark side. He now makes a great living and his clients make below average market returns.
Seems APC would be a great acquisition target. Storage coming out soon.
Nat gas. If the storage estimate is correct, inventories will total 1.735 trillion cubic feet, 5.1% below the five-year average and 31.7% below last year's record-high level for the same week. As recently as mid-February, stocks were nearly 18% above the year-earlier level.
Jim Ritterbusch, president of Ritterbusch & Associates, said the market has already discounted a rise in
stocks of around 30 bcf. A smaller increase "will be required to jump start a meaningful price advance capable of carrying values back to above the $4.30 mark," he said.
One more comment, thinking about the advice givers, the "hedge funds" can't afford the luxury of taking long term bets, they won't stay in business. The true hedge fund, of which there are few, in a 10% up year for the market, should do about 7% and in a big down year, -20% market, should lose 3% or there about. The money is made on avoiding losses on the downside. Long term is where the real value is realized. Risk is volatility and in the short term can be a loss if you sell, in the long term it's irrelevant. And I should probably be posting once a month, at the most.
Chanos, said he doesn't have a clue on the commodity, just used UNG to hedge short positions. Really like to listen to him, don't always agree, but they do a lot of work and it's independent thinking, you have to as a short investor, seems he could make more on the long side, the markets up 2 out of every 3 years. And the other lesson, there are probably only a few great short opportunities, the same probably applies on the long side. Feels like this is a march upward for the market, not sure what causes it to stop, guess when valuations get over done, seems we are a ways away from that level.
Chanos largest long position is UNG, nat gas. Surprised that he is using that, it's a flawed vehicle imo. Will be interesting to hear what he has to say about gas longer term. Not sure that it is sustainable, weather has help a bunch recently.
Newfield up today, probably got too cheap. With a good sale of intl assets, could be a good bet. Some think NAV is $40s.
Listening to Chanos on China, always worth listening to, there are still a few that are. He is probably right that it will have its reckoning sometime, just not sure when, the weight of printing money slowly sinks the boat, he has been in that position for a while. Thinking about this comments, China kind of reminds me of a lot of e and p cos, China's focus is on GDP growth, to the detriment of other things, balance sheet.... Almost every e and p leads with production growth, eps is secondary. Seems in this rally, too late to buy and too early to sell, but not sure about the latter. E and p s at $90 oil seem cheap but if China falls apart, crude will not do well.
I think we are a couple of dollars lower than we should be. It was/is an opportunity imo, double digits by year end, but that doesn't help the loss over the past few weeks. A stronger oil price wouldn't hurt. Getting through the secondary will help.
Hugh, nice to hear from you, wondered what you had been up to, a move takes a bunch of energy. Hope you like your new city. I hear a lot of the same about buy and hold from others, seems every one wants to operate as a hedge fund, and I don't think they will beat the markets, they have become the markets. The silliness of the short term discussions seems to get worse. I have never been a big e and p fan, so maybe I shouldn't be posting here, my experience is that most e and p cos tend to destroy value versus build it over time. I'm not sure we will see another 15 years as we have seen in energy prices in the last 15 for a long time to come. If I can find a couple of cos a year, I'll be satisfied. Is there anything in Africa that you like or have bought, seems it should continue to be hot for years, and risky. Keep in touch.
That was the best thing I've heard all morning, and probably reality. Now we are talking about US/Russian relations. They all say, I don't want to speculate, but then launch into a speculation. We have too much air time to fill.
The media today, off on a tangent about Chechnyan sleeper cells. Could just be two screwed up kids. Tragic. A couple of weeks ago, a kid slashed 20 people at a college here in TX, his motivation, he had fantasized about attacking with a knife. One expert was encouraging the kid today to give himself up so he could explain his ideology, he would have an audience. Seems those kind of comments would just encourage other nutty types. Our culture has changed dramatically, or has it. Or do we just have too much media. Freedom of the press, not sure about responsibility. The other clip I saw was a truck hauling off the black SUV, and they had it on a loop a couple of more times. The reporter said, looks like another car also being hauled off. Think I'll go for a walk.
The entire article on Black Swans is on Market Watch, can Google it. Thought it was very well done. It's hard to not let fear paralyze, or at least influence, after what we've experienced in the past 15 years. Plus the media doesn't help, fuel to the fire, as we have commented on.
One way to prevent the effects of dilution is to buy more shares at the lower prices. The deal really didn't dilute operating or financial proforma projections, in my mind, added value. Cynically, you could see the private equity investors buying the additional shares at discounted prices, $5 vs $8, not a bad result for them in the long term. Hard to prove that but it's conceivable. Or they do another convertible sale. I have bought multiples of what I had before the deal, not sure I would buy more at lower prices but who knows, the fall in oil price hasn't helped either. They don't close the deal until June 1 so there is some time, oil could strengthen some. Seems all e and p s are on the cheap side of value now.