"C,mon Santa, all the other juveniles are getting wonderful presents"
Speaking of juveniles.........
"But with the Saudi's fully committed to kill all competitors with $29 oil, anything is possible."
Indeed. Seems that the public has forgotten just how unstable is the Middle East, including the internal tensions in Saudi Arabia, and how renewed violence in the region will curtail production/supply. Hardly far fetched scenario and which will cause sharp recovery in oil prices.
I'm amused by the extremes of opinions on this MB (and in the press). The truth tends to be closer towards the middle.
Does anyone have an educated opinion on NVGS?
This LPS shipper seems to have sold off excessively with the oil sector, though it doesn't have direct commodity exposure. Very profitable, with growing comps based on vessel order book and rising rates. Management seems to be efficient/skilled at allocating capital.
"The U.S. economy posted its strongest growth in 11 years during the third quarter, supported by robust consumer spending and business investment.."
The plunge in oil prices in just the past 1-2 months will further boost expansion/job creation, and consumer spending. The proverbial rising tide....
I'm sure sure that you're making an important point---would be helpful to state it in plain prose, though.
Wonder why there's little talk of growth drivers for global oil demand in the press?
e.g. The Eurozone. The ECB announced this week that members recognize the need for it to do more to support economic growth, hence its plans to engage in bond purchases (not necessarily just sovereigns--implying maybe also corporates) early in 2015.
"IT IS MEANINGLESS to traders and shorts-the only people interested"
I don't trade, I'm an investor--it's a matter of time.
I'm highly interested in and am spending my days digging in the rubbish pile. Distressed situations are PRECISELY the time to position for outsized gains (ie, buy at severe discounts), and they're really the only time when savvy and disciplined individuals can gain an edge. Intellect vs panic-frozen minds----intellect wins everytime.
e.g., go back to 2008-2009 financial crisis----huge fortunes were made when cash-rich buyers were scooping up gems from crazed-eyed sellers (both individuals and institutions squeezed by liquidity problems). Preferred stocks, for instance, were yielding 20% , only to double-triple in shareprice in a matter of 1-2 years and driving yields back down below 10%. Ford fell to $1 in 2008, six years later today it's at ~$15. Shooting fish in the proverbial barrel.
"Too bad that net book value is pretty meaningless when it comes to the PPS."
NBV is meaningless, especially when increasing?
NBV-PPS relationship is meaningless?
Are you forward looking or backward looking?
What metrics or criteria do you find important for successful investing?
That's not all to consider--management also need to consider risk.
Debt may be cheaper than equity.
But, equity does not pose default risk that is associated with debt.
So, it's not all about financial engineering and theoretical efficiencies----certainly, the market is also looking at risk, hence the free fall in shareprices.
"only a fool would buy a bond that allows the issuer to buy the bond back at less than par"
Where did you get this fascinating idea?
LINE can only buy back on the open market what bond holders agree to sell. LINE can not compel bond holders to accept less than par.
LINE can buy back its bonds so long as there are no covenants restricting its use of cash (DRYS recently did so).
However, I suspect there's a limit it can buy back at currently discounted levels without substantially pushing up prices.
The collar strategy used is to minimize LINE's initial cash cost of setting up these hedges (ie, the long puts cost LINE money, offset by the short puts).
Yes, collars do not provide much upside/downside once established.
However, collars are only part of LINE's hedge book.
Think of the hedges as insurance, they allow LINE to sell at various fixed prices.
The value of the hedges rise as the underlying oil reference price drops. Think of the difference between the contract strike price and current oil price---it's been gapping up as oil prices have plummeted, no?
"Only the IRS can answer that one with any real definition."
True. The chicken and the egg.
TDAmeritrade indicates that it reports LINE and LNCO trades separately on 1099s (ie, by ticker). The implication is that tax loss harvesting trades with this pair will not trigger wash sale.
" Even if you sold LINE and bought LNCO and you had a loss you would have a tax wash"
Is this true?
Does not the K1s distributions vs 1099 dividends and tax differences make LINE/LNCO materially different?
"They would rather go bankrupt.."
You say that LINE management would chose bankruptcy over debt pay down via additional share issuance.
Do I understand you correctly?
Does this thinking make sense?
"gas is on a whole different trajectory long term."
The front months/near term NG futures are currently under $4, have been hypervolatile recently given weather dynamics.
However, it's interesting to note that further out, contracts rise into the $4s and $5s in sustained manner----ie, Dec. 2016 onward.
The futures curve rising---something new over the past few months.