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oldye

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  1. nice writeup  on LTS  i did sell about a 3rd of holdings in around 8.70 and have been adding on fall

     

    http://buysidenotes.com/2014/07/15/lightstream-lts-3x-eventually/

     

     

     

    How does KOG compare to LTS in growth rate?

     

    Kog is also spending 940 million on capex vs 525-575 million for Lightstream.  Lightstream is currently projecting an exit rate of 45,000-47,000 vs 39-41k for Kog. 

     

    If only Lightstream just turned off the dividend and drilled a few more exploratory wells.  Lightstream is worth more than 6 billion dollars at $100 oil. 

    Being cashflow positive combined with a cheap valuation, deep drilling inventory makes it a very attractive takeover candidate right now. 

     

  2. Time to go back and reread Intelligent Investor? The stock market in the. short-term is a voting machine...it doesn't have to, and does not revalue a stock based on fundamental changes, hence creating opportunities for value investors to do what we do.  ::) 

     

    During the cds/short days we were buying after huge moves had already happened, I would not consider bbry up 25% to be a huge move, especially since ffh is trading substantially above tangible book.

  3. Like I said, kind of crazy how we all came to the same conclusions...

     

    100k volume shows that Touchstone is in strong hands I guess..at least at these price levels.  100k is nothing for some of the members of this board, let alone everyone that reads it.  Ideally Lts/SD gets bought out before Mr. Market has wakes up...

  4. I think it's interesting how so many of us took similar positions, I sold out of my FFH (after 8 years) and went all in on oil and gas.

     

    I own the lts common, sd in the money leaps and touchstone exploration. Don't like talking about touchstone on here because it's so illiquid.  But I hope to get back into FFH once these companies realize their value. 

  5. back of the envelope:

    Enterprise Value after recent divestiture ~ 3.9 Billion less 239 million in sold assets since q1 - 3.66 Billion

    Less value of 80,000 acres in the Duvernay - (600-800 million)

    2.8-3.0 Billion

     

    Proforma Fund flow from ops - 635-660 million implies a current Funds flow multiple somewhere around 4.4x

     

    You can definitely argue that 4.4x cashflow is fair for a commodity company and that is your choice.

     

    But right now I think there is a good chance we see higher oil prices and Lts will continue to reduce debt and unlock value.  Looks like they put another block of land on sale through RBC, submission deadline is June 19th and we should expect to see another 100+ million reduction in debt if a deal is made.

     

    The natural gas injection results look promising and I like having the upside of technological advances that will unlock even more value from their land. 

     

     

     

     

     

  6. Lots of room left, Lightstream's equity is still a 40-50 cent dollar at current prices.

     

    http://www.nytimes.com/2014/06/14/business/energy-environment/oil-industry-in-iraq-faces-setback-to-revival.html

     

    “The collapse of Iraq would bring an international oil crisis,” said Dragan Vuckovic, president of Mediterranean International, an oil service company that supplies state oil companies in Iraq. “It would mean crude oil would go up to $150 a barrel. It could spread unrest to Saudi Arabia and Kuwait.”

    :-[

  7. Here's the background.

     

    During WWII,  Khrushchev was In charge of suppressing dissent in Ukraine.  This he accomplished by killing millions of people and reinforcing the Soviet government there.  When Stalin died, Khrushchev propped up the shaky government of that republic by giving Crimea to the Ukraine, even though it had belonged to Russia for 100 years.

     

    The recent pro Russian government of Ukraine that was recently ousted was an unprecedented cleptocracy even by Russian standards, stealing alike from Ukrainians and even Russian buddies of Putin.  The last straw was the Ukraine's revolt, raining on  Putin and Russia's Olympics extravaganza that had been carefully planned by Putin to show how modern Russia has become, financed by Oligarchs who are on his team.

     

    The taking back of the Crimea and the impending takeover of Ukraine is payback to the Ukrainians for spoiling Putin's party (and Russia's party too).  With 80% approval rating at home, Putin now has a green light from the Obama administration that has publicly announced that they won't do anything to dissuade Putin from taking his revenge other than making self righteous noises.

     

    When Russia sends forces into the Ukraine, don't be surprised if Israel seizes an opportunity to do something about Iran's nukes.  This is the way big wars start. One day war is far from everyone's mind.  The next day it happens.

     

    +1

  8. Then we can mention why West Ukraine went from a region that was very ethnically diverse into one that became entirely Ukrainian. Although, for good reason the Ukrainian 'nationalists' want to avoid this very embarrassing topic.

     

    That is why just about all of us left first/second chance we got. The few that stayed must be really stubborn.

  9. Reinsurance side cars backed by hedge funds looking for a new place to bet.  A few years back the late Jack Byrne's White Mountain used these vehicles with horrible results for shareholders.  Another trend I've noticed are the new hedge fund run insurance co's like Green Light, Third Point Reinsurance, Sac Re etc.  lots of capital and general dearth of insurable events is why I don't currently have any investments in this sector.

     

    http://www.propertycasualty360.com/2006/07/17/byrne-says-white-mountains-shareholders-protected-by-sidecar-deal

     

     

  10. Food for thought: http://www.afdc.energy.gov/vehicles/natural_gas.html

     

    Natural gas powers about 112,000 vehicles in the United States and roughly 14.8 million vehicles worldwide.

     

    Currently growing at about 10% per year, how long before natural gas makes up roughly 1% of all vehicles on the road in the U.S?

     

    Back to the topic at hand- this is paraphrasing of course:

    Charlie has stated several times that he thinks using up all of our easy to find hydrocarbon resources for transportation is short sighted and stupid. 

     

    In that last video I saw he said that he thinks scientists might come up with a solution but it is no way to bet...

     

     

     

     

     

     

  11. During these calls it does sound as if Prem would prefer to mark everything at intrinsic value but like everything with accounting you have to go with the lesser of two evils, and even though MTM is always being manipulated I don't think I would invest in a company where the accountants/regulators/ceo would decide what everything was worth. 

     

    I guess it isn't fair because it certainly counts on all of their hedges/ stocks/ bonds. But if Fairfax gets to report the quarterly profits and losses of those companies they shouldn't get to mark them to market. 

     

    I think Prem's language during these calls is consistent with all his previous calls.

     

    I wonder who is buying these shares at these prices (I should also probably thank you)

     

     

     

     

  12. In addition to the above mentioned arguments for bull market, we've the following

     

    1) Capacity utilization is very low, reducing the threat of inflation

    2) Commodity prices are not in bull market territory

    3) Unemployment is high, labor force participation is low: no threat of higher wages

    4) Emerging market economies are not in high gear, so any growth in US will not cause bubbles over there

    5) Looking at valuations, see http://www.yardeni.com/pub/valucb.pdf

    Look at all the charts like P/E, Tobin Q (Figure 17), market cap vs GDP, you would not say we are in bubble territory

    6)  Anecdotal evidence: so many people were left out in the recent run up, they are pissed off and want to make some $$. They are going to enter the market in droves.

    7) Ray Dalio calls this "beautiful deleveraging", where we dont have run away inflation or deflation.

     

    I think that the bull market is getting started.

     

    All this flies in the face of Watsa's CPI derivative bet. What gives?

     

    Just read the Opec report the other day, they're forecasting European GDP to contract by about .5% this year, U.S growth has been revised down to around 1.5%. That is roughly 50% of the world's GDP growing at 0.5% a year right now with a lot of central bank monetization.   

     

    As far as lack of marginal workers, they're out there in droves and more will come back in the fold if the economy heats up, which it probably won't, its been almost 6 years since 08, we're due for another 'correction.'

     

     

     

     

    I think Hoisington is right and as soon as QE stops, rates will drop.  What happens to the GDP's of all the oil producing countries when the price of Oil hits 75 again?  They're barely growing as it is, I think the reason a lot of oil stocks are cheap is because this is being priced in. 

     

  13. They are competing with many small companies who can offer the same overpriced installations with zero money out of pocket. 

     

    How do you mean "overpriced" if we're talking about just buying the electricity only?  It's cheaper than what you currently pay your electric utility company, so many people will find it underpriced relative to what they pay already.

     

    I think it makes sense to buy your own system if you have the cash, but if you are hoarding your cash (or paying down debt) and you merely just want to lower your utility bill so that you can have lower monthly expenses, then there is nothing to lose by having SolarCity provide you with discounted electricity for the next five years.

     

    By buying the electricity you are effectively leasing/financing/renting the system from them, your monthly

    lease payment is determined by how much electricity your system generates.  They are absorbing some of the risk of ownership.  And you're right, you will save money vs buying from the grid.  They get to keep most of the rebates/subsidies associated with the installation.

    Or you  could use your home equity and have it professionally installed for under $3k/kw, keep the subsidies/tax benefits yourself, reduce your electricity bill in exchange for a even smaller monthly payment on your loan. 

     

    I'm not saying they don't have a place in the market today, but the technology will continue to change and there are a lot of companies (see the google adverts on this page) doing the same exact thing. 

     

    The large solar projects Berkshire is involved in cost less than $5k/kw and qualified for a lot of tax benefits, but the economics of these projects improves as the cost drops/ efficiency goes up.  The cost of small/individual inverters makes the large projects far more economical. 

  14.  

    They are competing with many small companies who can offer the same overpriced installations with zero money out of pocket.  And if you think about what the future will look like, innovation in racking and inverters will bring the costs/ ease of installation down considerably.  Why wouldn't homeowners push the middle men out and just keep all the benefits themselves?  You're right when you say current economics, at $5000+/kw homeowners might need the "free" financing. What happens when solar efficiency goes up and the standard installation costs becomes less than $2500/kw? If you look up the California statistics, you'll see some installations already being done for less.

     

    At 2.7 Billion Valuation and 130 in 2012 Revenue, with absolutely no moat, it seems to me like this might be a good company to investigate as a short (probably the first time I've ever suggested something like this and I like Elon!)

    http://www.californiasolarstatistics.ca.gov/reports/cost_vs_system_size/

     

  15. So essentially, these guys would benefit from dropping solar panel prices...

    And rising electricity rates, note though that there are no barriers of entry to this business and just about anyone can provide "financing" for "Free" solar.  Oh and a lot of current subsides (at least in my area) have been reduced and are going to expire entirely over the next few years.

     

  16. These shares have done even better than TSLA shares since IPO.

     

    I spent some time on their website last night -- interesting way to get solar panels on your roof.

     

    You only pay for the electricity it produces, and get the option to buy the installation after 5 years.  Aside from the actual electricity generated, you have no obligation to pay for anything else.  No installation charge, no equipment charge, no maintenance charges.

     

    SolarPPA is their product name for that:

    http://www.solarcity.com/residential/solar-ppa.aspx

     

    I don't know where you live Eric, but here in California you can find statistics for all solar installations and Solar City is consistently above $5000/ installed kw.  I haven't done this myself but if you split the project up, you can have a solar engineer design the system for less than $300, hire a top rated company to install and help you register all the permits/rebates for the system for about $1.25/watt and then buy the panels/inverters /racking yourself for under $1.25/watt bringing your all in cost easily under $3000/kw before rebates.

    Depending on the amount of Sunlight, your savings yield on the system before rebates can easily be north 20%.

       

     

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