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Electronic Arts Inc. (ERTS) Message Board

telsarowe 18 posts  |  Last Activity: Aug 6, 2015 11:43 AM Member since: Jun 27, 2010
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  • Which was around $42.50 for WTI. I really think that the low for oil will be here in the next week or so of trading. There is too much divergence in the energy industry and these companies are at or below book value for godssakes.

  • $43's! This is capitulation.

  • Reply to


    by jsc92157 Aug 6, 2015 11:07 AM
    telsarowe telsarowe Aug 6, 2015 11:28 AM Flag

    Stop it, the both of you. Nat will top out at $3.25 this year (which is still great for longs). The falling costs of production, decreased drill times, efficient pipelines and transportation coming on line will allow the upstream Nat gas companies to make a huge profit. By 2017 natural gas will probably be $4. However, the costs of production upstream-downstream will have fallen another 50%. That's why I am long these companies, because prices of the commodity themselves do NOT have to fully recover for these companies to make huge profits.

  • telsarowe telsarowe Aug 6, 2015 11:21 AM Flag

    Ya but just when will the winter come and how cold? I'm going the obverse and hoping it remains hot through September which would really cause some inventory drawdowns and cause some huge analyst overestimates.

  • Reply to

    EIA Report

    by tomatferndale Aug 6, 2015 10:45 AM
    telsarowe telsarowe Aug 6, 2015 11:06 AM Flag

    No, the estimates were 52Bcf.

  • telsarowe telsarowe Aug 6, 2015 11:04 AM Flag

    That would be a 70% increase in prices. I think we will see $3.25 though shortly.

  • That is significant and the move in the natgasser stocks today show just how desperate the sector is for a little good news. Maybe natgas can start to lead oil and not the other way around LOL. At least looks that way today. All in all, I just hope August turns out to as hot across the US as was July. Dog days for anther 3 weeks so we could see a sustained storage drawdown.

  • 1- Because the gas\oil companies have cut all compulsory costs. They have essentially gone on a full body detox getting rid of all unnecessary personnel and least productive assets. They have reorganized their debt. They have allocated capex to the highest ROI(L) endeavors. They have slashed dividends. The smallest of the producers assets will end up consolidated under the mid and major companies umbrellas. Congress with bipartisan support is set to overturn the export ban this fall. Shale extraction costs continue to fall quarterly (already down 30% in the last calendar year). Transport costs continue to fall because of the multitude of pipelines that have opened and are set to open over the next 2 years. Shale drilling time continues to fall year on year down to 17 days from last years average of 30 days. New emissions framework has bipartisan support and will lead to further development of natgas.

    There is no need for a full price recovery to $90 or $5 for oil or natural gas respectively for these companies to be wildly profitable. If oil was currently $90 and natural gas $5 with all the reorganization and efficiency that has taken place heretofore then you would have to add approx. 25% to their 52 week highs. Oil at $70 and natural gas a $3.75 will be plenty.

    Its about production costs and efficiency more than it is about just the pricing of the commodity. I remember not too many years ago when the gold mining companies were wildly profitable and gold was trading at $500 oz. I also remember not too many yeas ago when oil companies were wildly profitable and WTI was $30. The US energy industry will adapt quickly and emerge much more efficient over the next couple years. If you think that oil will return to $70 anytime in the next couple years then this is a generational buying opportunity because these companies are going to be incredibly well structured from top to bottom.

  • Congress still has to vote before Sept 17th. Its likely hey vote 'NO' and if 'YES' then amendments in regard to the sanctions will be compromised.

  • I like rrc, mro and do.

  • Reply to

    CHK - NG vs. Oil ?

    by cantfindaprofilenamenotinuse Aug 3, 2015 4:45 PM
    telsarowe telsarowe Aug 3, 2015 11:36 PM Flag

    NG is much easier for chk to move logistically. Catalytic cracking of oil vs NG requires them to move oil to different refineries with spare capacity... of which there is none because all the US refiners are and have been running at max capacity. Which makes this sharp collapse in oil all the more questionable...

  • Reply to

    Longs need to chill out.

    by nmbvua Aug 3, 2015 10:16 PM
    telsarowe telsarowe Aug 3, 2015 11:28 PM Flag

    Well, looks like production peaked in April. Gotta wonder what the Saudi play is here because gaining market share after the US production peak hasn't worked because prices kept falling. Lot of these small shalers are probably hedged pretty well by now anyway. Maybe they've been shorting their own product and having it both ways. Gonna have to keep an eye out on the London Brent paper. Saudis sovereign wealth will go long oil just before they announce cutbacks.

  • Reply to

    well, there is one positive...

    by telsarowe Aug 3, 2015 10:15 PM
    telsarowe telsarowe Aug 3, 2015 11:20 PM Flag

    Ya, the new emissions proposal and opening pipelines should really keep natG in a narrow range.

  • telsarowe telsarowe Aug 3, 2015 11:16 PM Flag

    Agreed. Just relax. Buy some puts to protect against any further downsizzle.

  • Natural gas has done fairly well all things considered. It also feels like shorts and bears on energy are waiting for the last dollar. Chk et al have massive short positions that need to be unwound and that should be a boon to longs shortly. Glta.

  • telsarowe telsarowe Aug 3, 2015 9:37 PM Flag

    The only thing worse than losing what you have would be to sell now and miss a big spike. You would regret that one forever.

    80:20 rule- start buying when near 20% of potential downside. I see oil potentially breaking $40 (just so the hedges et al can say "told ya so") to $38-$39 but briefly. I think even the worst of the bears on this board see oil within 20% of a bottom here. The short positions in oil are massive and will take a while to unwind.

    Personally, I'm down huge as I bought mostly last fall. Down about 37% which is currently worse than my losses were in March of 2009! LOL. Too, you eluded to "capitulation" and I'm seeing it right now everywhere. Do not sell now. You held this long you can a take a little more.

  • telsarowe telsarowe Jun 5, 2015 8:24 AM Flag

    Too, these constant delays are costing the troika tens of millions in interest. They can't pay the $330 euros now but somehow are going to be able to pay 1.4B euros in 3 weeks?

  • telsarowe by telsarowe Jun 1, 2015 5:32 PM Flag

    I don't believe in these ^vix tracking etn's. Decay/contango etc essentially strip the value. However, I do place large buys in vxx/tvix every so often (bi-annually on average) when the idicators that I respect, well, indicate.

    Volatility annually is generally a 10 month loser out of the 12 in a year. The Fed's QE program essentially killed the ^vix and the corollary ^vix tracking products by backstopping the market.

    This all said, margin debt is an indicator I revere. $507B in margin debt as of the end of April (figures released this morning). That's a historical record again (we have been setting these for a while now). But thats not the most important part. The most important is that it jumped a staggering 7% since the previous reading in March- that is eyebrow raising. In fact, its plausible that margin debt is considerably higher than that since May's reading wont be out until July 1st. Net cash meanwhile is at a historical low negative $227B. Take into consideration that there is indeed more liquidity since the 2007 top when margin debt was about $390B yet net cash was at $0 then. The ratio on that is another historical feat.

    Essentially when selling starts it is going to be exacerbated by $227B in compulsory covers. When the ^vix wakes up it explodes. A 100% gain in the ^vix occurs at least once a year. Yes, it then decays for the rest of the year in the Fed backstopped market but I don't see any risk buying vxx/tvix anymore right now. None, even if it continues to decay. I see the ^vix testing 25 this summer and vxx above $30 sometime this summer as well.

    Many articles about the unreliability of Dow Theory are out now and I wont let those stop me from protecting my money by going in cash. Don't believe the nonsense about 'too much bearish sentiment'. There isn't any. Look at call to put ratios. Until the puts outweigh the calls and the ^vix is well above 15 there is no veracity to that claim.

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