bizaro86

That while ago I think was 12 years ago. Maybe we can agree they were wrong. Yes, spigots can be turned on fairly easily. There's a lot of supply out there. If you're not talking about a massive increase in demand oil is gonna suck. Can you elaborate as to why you say that there is a spigot that can be turned back on? I listened to a podcast today with Art Berman today specifically saying this wasn't the case. Basically was saying new technology means shale wells deplete MORE quickly/efficiently and that it takes ~10-12 months to get newly discovered wells producing. So if we're not currently exploring/drilling wells, it'll take some time to ramp up to meet that demand once it does normalize. It definitely isnt a spigot, but I think 12 months is longer than it would take. Shale wells are in low permeability rock. The hydrocarbons dont naturally flow. That is why they require frac'ing. As an example, much of the Permian has permeability of say 10 mD. A hydraulic fracture has permeability much higher than that. It varies based in the size of the sand used and the closure pressure, but 10 D would be on the low side. So the permeability in the fracture is at least 1000 times greater. Flow rate is directly proportional to permeability for a given pressure drop and viscosity (Darcy's law). So at the beginning of a shale well's life while it is governed by the fracture flow it is 1000x more productive. This is a simplification of course, but the assumptions behind it aren't drastically wrong. A shale well quickly and easily produces the fluids that are within the fracture porosity, and then very slowly produces the fluids from the matrix porosity. So after a sharp initial decline you can expect low decline (at much lower rates) for a long time. Drilling new wells is required to access the initial flush production again. And that flush production is the only reason US oil production has grown so rapidly. That can be done quickly if a firm has licenses ready to go, especially given current availability for equipment and services. I think a 12 month response is slower than it would take shale drillers to ramp up once they decided to do so. The technical work is fast, and probably mostly done already as those wells were planned. There is no exploring for new oil phase here, it's all development drilling. What will slow things down is people deciding to drill (and fund drilling) again. They have been bitten so many times you'd think capital providers would have learned...

Compare the current vs prior year numbers by location. Of the 1,124 rigs dropped; 62% were from the US, 29% were international - but only 9% were from Canada. Very telling. SD That's just because the US and International have larger numbers of rigs. The Canadian rig count is down 86% year over year. That is worse than the US, which was down only 72%.

I think it's the same reason why the short threads on here often outperform- something is simple and works, what else is there to say? Something like the underlying causes of inflation/deflation is complex and fundamentally can't be proven. So it can be fodder for a never ending discussion. But buy decently located RE with reasonable leverage, let the tenants pay it off, end up rich, isn't very complicated, so there isnt much to discuss.

Is there a reason total US Treasury Debt is the correct denominator for this calculation? It seems to me that if the Fed buys a bunch of bonds and the Treasury puts that money in the economy, it isn't less inflationary because the Treasury borrows a bunch of extra money privately and spends that as well. I could totally be missing something, but wouldn't something like money supply be a better denominator?

I posted this in response to a question in the Canadian real estate thread about 6 weeks ago. Since that time, I have collected 100% of my May rents on time and in full. The Canadian government is basically floating my tenants, I think. Also since then, over 30% of my tenants have given notice they are moving out due to relationship breakdowns. That is insanely high, even with the same small sample size warning as above. I think it is very likely forced isolation has been pretty hard on relationships everywhere, and my tenants probably have less secure lives/relationships/jobs etc on average which has probably made the whole situation more stressful. Bizaro, I may have missed it, but how many units is your building? Trying to gauge the extent of the small sample size. Not a building, its condos in a variety of buildings. My kid who is learning to count couldn't count them on one hand, but he wouldn't need all his toes either.

I posted this in response to a question in the Canadian real estate thread about 6 weeks ago. Since that time, I have collected 100% of my May rents on time and in full. The Canadian government is basically floating my tenants, I think. Also since then, over 30% of my tenants have given notice they are moving out due to relationship breakdowns. That is insanely high, even with the same small sample size warning as above. I think it is very likely forced isolation has been pretty hard on relationships everywhere, and my tenants probably have less secure lives/relationships/jobs etc on average which has probably made the whole situation more stressful.

Most modern engines with modern oil can go way longer than the manufacturer's recommended oil change intervals. I look at oil changes during the warranty period as primarily an investment in maintaining my warranty. After the warranty is over, I space them wider (and only by mileage). There is an agency problem. Most consumers dont check the recommended service interval prior to purchasing a car, but the service interval makes a big difference to dealer profitability. So the manufacturer has an incentive to keep it shorter than necessary. IIRC, once BMW started including oil changes the service interval increased quite a bit.

Except it seems that most places drivers drive for both Uber and Lyft. So if Uber builds a network of drivers with density it doesnt seem like they have a way of keeping their competitors from using the same driver network to take share.

I thought Masa was just misunderstood in his own time - like Jesus and the Beatles?

I'm originally an oil and gas engineer by profession. Investing using that knowledge has been not helpful however. Easily my biggest loss was a large position in the distressed debt of a junior oil sands company. I believed there was a relatively simple solution to the issue they were having, that they would implement it, production would grow, and they'd be able to refinance the debt. I still think that solution would have worked, but they either didn't think of it or ran out of cash prior to implementation. Either way I loss 100% of the investment. Compounding that money at the same rate as the rest of my portfolio since then produces a very painful result. I was both overconfident and wrong, and the overconfidence caused me to size the position too large.

But how much would rates have to go up before regulators moved? If the 5 year goes from 0.3% to 6% that would exert a lot of gravity on income stock valuations, but I could see state regulators saying that 10% is still an acceptable ROE.

I'm gonna disagree with all three: IBKR - they are nickel-and-diming their customers like there's no tomorrow. Pay for quotes, pay trade commissions, pay if you don't have enough trades per month. Some of these may have been removed, but because of competition and not because IBKR are good guys. So zero loyalty to IBKR, screw them. DIS - I think the park prices are ridiculous. High-speed internet - most countries have much cheaper high-speed internet than US. US monopoly pricing sucks. Shrug. I would pay more for all three of these services. Part of it for some of them is being non-USA. IBKR is much better than competitors here in Canada - no free trades for everyone here. Given how fast their customer base is growing it seems I'm not the only person who feels this way. I also think Disneyland is great value. Tickets are expensive, but a lot is included as well. Different strokes for different folks, but enough people agree with me that they keep raising prices and attendance still grows. Obviously we'll see if that holds post covid, but I think it will. High speed is likely colored by being outside USA. I pay $105 CAD (so under $80 USD) for 300/30 high speed, basic cable, and a home phone. I would pay much more than that just for high speed if necessary.

ALX

Okay, I think perhaps I should have titled this as "Businesses That Choose To Completely Monetize" Perhaps this is me getting older and increasingly appreciate Costco and Visa/Mastercard. It's appreciating that you don't have to extract every last cent. Recently, my wife and I have had a lot of restaurant and construction employees who can't pay rent. We choose to work with them and decided that life is too short to be a-holes. The point of the thread is to identify companies that have monetized every last cent. My theory is that the companies that somehow manage to charge a 10% gross margin and pay their employees a livable wage, i.e. Costco, can thrive for a very long time. Invert this and the companies that makes one of their constituent, customer, supplier, etc unsustainable in the long run will likely face structural issues. I think QSR franchisors are great restaurants. But the franchisees are really suffering. At some point, this will come to bite the franchisors in the butt. I think this is a great insight. Any business that isn't completely monetizing its pricing power has a huge moat. It makes it very difficult to compete with them, because a new entrant would need to either offer more or charge less, and the lower-than-possible margins make that hard. A few other things I think fit this model: -Interactive Brokers - their margin rates are way lower than the competition. They could raise them and still be by far the lowest. But their margins are still good. -Disney Parks - they have discovered pricing power, and raise ticket prices every year. The parks are still always packed, so they are under-doing this. This is weaker than the other cases mentioned, imo. -High speed internet - I would pay more than I do right now for this. A lot more. Maybe competition keeps this down. There are two sets of fibre to my neighbourhood (one telco, one cableco) so there are two choices for true high speed.

I think it's a bit better. A few posters have really upped their game lately (shout out to thepupil and he collection of REITs with a free one-liner). I dont read the coronavirus thread at all after concluding it was doing me more harm than good though, so that might color my opinion.

I worked for a big company that kept significant payables once. They were willing to quick pay (15 days instead of the usual 90) for a discount to the invoice total. IIRC it was 2-2.5%. Basically offering factoring to their suppliers.

I think there is probably still a Buffett premium, but it's on top of the conglomerate discount. If you dont have superior and inexpensive capital allocation Berkshire doesnt really make sense, and would absolutely trade at a big conglomerate discount.

I would suspect there is some sort of volatility bets in there as well. Possibly way out of the money options on the VIX? They are european exercise, iirc, so you would need to own every expiry.

I think it's like anything else - mostly you should follow the accounting standards. But if you can find a place where you have a variant perception on lease accounting that makes a big difference to the value, that might be a source of under or over valuation.

I think the problem with underwriting better portfolio returns is the way they invest (distressed/cigar butts) isnt well suited to the size of their investments. Buying Toys R Us Canada out of BK would be fine if you could sell your stake once it was up and running and had a couple of good quarters. Holding it long term seems destined to fail. BlackBerry could have worked out great if they could have been more nimble getting out at the peaks. Cigar butts are one puff stocks. You need to get your returns on the one puff and then get out. That's harder to do on big huge positions in firms (eg recipe).

Doesn't seem like a good answer for when the mom of one of my kids friends is asking questions to casually figure out whether she should let her kid come over and play.

Yeah, unless you come across an actuary who is really excited to meet another one and wants to have an in depth conversation about it...

Furloughing the most junior pilots will also increase their costs, since the senior pilots make way more money. So they're cutting their lowest cost labor. I actually think a big part of the demand that will remain will be price sensitive leisure travellers attracted by good deals. There is a big cohort of young people who dont think they're at risk, and will travel. But that is a very price sensitive demographic.

This is hard. I am about 50/50 investing income and running a small online business people dont understand. I tell people I'm an engineer and I work from home. Those statements are both true, but it doesn't follow (as most assume) that I work from home as an engineer. My wife has an aunt that asks me if I have gotten a job yet every time we see them. I'm pretty sure she thinks I'm mooching off my wife. I'm always tempted to tell her how much money I made last year, but aside from being objectively crass my wife specifically forbade it. So now I just say, "no, my own stuff is going well, thanks for asking." And grit my teeth. These questions are easily the hardest part about my career choice, imo.

I believe screener.co fits your requirements. I have it and think it's great.