shhughes1116

I've been waiting for another leg down into the mid or low 30's and/or a major bankruptcy to signal the bottom...hard to tell whether or not that will happen.

SU-24 is a variable wing ground attack aircraft. The variable wing aspect is the only similarity with the F-14 flown by Tom Cruise in Top Gun. A Su-24 is more like an A-6 Intruder or an F-111 Ardvark. These aircraft are ground attack and electronic warfare aircraft...they are not intended to operate in contested airspace, without fighter cover. A Su-24 Fencer would not stand a chance in just about any scenario against an F-16. You should give a fuck now. Russia has been predominantly operating Su-24's and Su-25's in Syrian airspace. These are ground attack aircraft. If Russia was attempting to pick a fight with Turkey, they would be operating these aircraft real close to Turkish airspace in conjunction with cover from Su-30's. The Su-30 would make it a pretty interesting fight, and that type of dog fight would likely cause Turkey to activate the NATO mutual defense clause, drawing other NATO countries into their fight with Russia. How do you think that would work out for everyone? That later point is my concern. Regional instability pulls larger powers in with conflicting interests and those larger powers clash. No different than world war II where everyone from Russia, Japan, the U.S., and Norther Africa got involved with a war that was mostly for Europe. I'm not saying that this will be the beginning of that war, but I do fear it has the potential to escalate things until we get to that point. I posted on Facebook yesterday that I feared that we may have just witnessed the assassination of the Archduke Ferdinand. We'll see if things escalate or every keeps their heads cool and de-escalates the situation, but last I knew, Russia was sending in warships to the area to provide cover and the U.S. and French were discussing doing the same... I was thinking Vietnam. I mean, what could possibly go wrong when two major powers are waging a proxy war via a country's civil war. Sending U.S. advisors in a "non-combatant role" to assist with one side of the civil war... Waging an air campaign which will ultimately prove to be ineffective without boots on the ground. I swear I have I seen this story unfold before... Oh wait, Vietnam...

SU-24 is a variable wing ground attack aircraft. The variable wing aspect is the only similarity with the F-14 flown by Tom Cruise in Top Gun. A Su-24 is more like an A-6 Intruder or an F-111 Ardvark. These aircraft are ground attack and electronic warfare aircraft...they are not intended to operate in contested airspace, without fighter cover. A Su-24 Fencer would not stand a chance in just about any scenario against an F-16. You should give a fuck now. Russia has been predominantly operating Su-24's and Su-25's in Syrian airspace. These are ground attack aircraft. If Russia was attempting to pick a fight with Turkey, they would be operating these aircraft real close to Turkish airspace in conjunction with cover from Su-30's. The Su-30 would make it a pretty interesting fight, and that type of dog fight would likely cause Turkey to activate the NATO mutual defense clause, drawing other NATO countries into their fight with Russia. How do you think that would work out for everyone?

P2P is an interesting concept, but it is not going to replace Visa, MasterCard, Discover, AmEx, etc. Suggesting that P2P is going to replace or substantially impair these business models fails to recognize why people started to use credit cards in the first place....CREDIT. P2P is essentially a cash transaction, without having to hand over physical cash. If you don't have dollars in your account at that point in time, than P2P does not work. So unless we are going to a pay-as-you-go society, P2P will never work for most transactions. But let's assume for a second that P2P platforms overcome this hurdle and manage to offer credit directly. Giofranchi hits this point spot on. Once you transition from technology company to financial company, you become subject to a host of regulatory requirements. I have a lot of trouble seeing these P2P platforms offer credit directly because they will never have the customer base necessary to do so in a competitive manner. This is why the current oligopoly has such a moat. Apple and Google will never compete with this oligopoly because they recognize it is more profitable to collect a toll on each transaction from an electronic device, than it would be to offer credit directly (and deal with all of the associated regulatory costs). But wait, maybe P2P companies try to emulate Visa and Mastercard by offering co-branded credit cards where the banking institutions offer the credit and the P2P platform simply provides the plumbing to make this system work. You want to know why this will never happen? Strict liability. If something goes wrong with the P2P platform (i.e. fraud, money laundering, terrorism-related transactions), the concept of strict liability means that both the P2P platform and the banking institution will be on the hook for lawsuits. And don't try to tell me that the banks will indemnify themselves through a robust contract with the P2P platform...indemnification doesn't work so well when your partner's pockets are empty and they will go out of business after the first lawsuit. There is certainly going to be substantial change in the payment industry over the next decade, but I believe that the current regulatory regime, along with the way our current justice system works, will provide an almost impenetrable moat for the incumbent operators.

This is a truly bad situation for all mankind. The more they publicize crap like this, the sooner that wives around the world will realize that heating the house during the Winter is really not that expensive and thus they will start adjusting the thermostat.

x 2 for Settlers of Catan...very good board game. Would also recommend Ticket to Ride. If you like strategy games related to military history, I'd highly recommend checking out the Slitherine website. They seem pretty effective at updating and expanding old computer games (i.e. they released Panzer Corp, which is based on the older Panzer General and Allied General Series by the now-defunct SSI, but with more scenarios and more units). They have also transitioned a number of classic board games into computer or iPad games.

This thread raises an interesting point about the re-settlement of displaced persons around the world by the United States. For those of you who are old enough to remember, many of the refugees we evacuated from Vietnam around the time that Saigon fell were temporarily resettled at Anderson Air Force base (Guam). This was the first stop before refugees were allowed to come to the mainland. It also provided an opportunity to weed out the bad characters and begin the integration process. This same process was again used when resettling displaced Kurds during the mid-1990's. If any of you know Vietnamese refugees from this time, you will understand that this process was pretty effective for integrating these folks into the United States. I have a lot of trouble understanding why we are not following this time-tested process for Syrian refugees. By dropping them off in the mainland, we lose the ability to weed out bad characters fairly quickly, and we lose the ability to jump-start the integration process. This makes these folks more susceptible to radicalization. If you want to see how this story ends, trying walking through the Molenbeek district in Brussels, or through some of the more seedy areas of Paris. There are entire generations of disaffected Muslims who believe that Western society is the cause of their ills. It is pretty easy to radicalize someone like this, and that is pretty evident if you walk through these neighborhoods (it has been pretty evident for the last decade actually...).

This market, and every other market since the beginning of mankind, has been manipulated in some fashion by market participants. In the case of oil, I don't think it is that hard to forecast the trajectory. Overproduction leads to lower prices, lower prices lead to reduced production and increased demand, demand begins to increase along with corresponding declines in production which causes tightening of supplies, and tightening of supplies eventually yields increased production. Although the pricing and volume may change, this cycle occurs consistently. So who gives a crap if Goldman starts pumping and dumping, or if the United States starts releasing oil from the SPR, or if a bunch of monkeys in suits get on CNBC and start prognosticating about the price of oil, or if Elon Musk blatantly and frequently manipulates his stock price through Tweets and other social media...this is just noise. The real question is whether or not you can make money in a manipulated market. As a small player with a flexible time horizon, I have a pretty good idea of when to put money to work in the oil cycle, and when to start taking it off the table. My timing is far from perfect (as evident by some of the red in my brokerage account from getting into certain names a bit too early in the cycle), but in general, I think I can use the bulls**t described above to benefit myself, and I think you can do the same. So instead of getting frustrated by the bulls**t manipulation, use it to your advantage to make some money.

There are probably people on here more qualified than me to answer that. But my view is that it isn't. Since oil is getting progressively harder to get out of the ground you need more capex to get replace a barrel of production, plus there's the inflation thing. I think it is a little more nuanced. I attempted to research a similar question and came upon the following information: "Companies involved in the exploration and development of crude oil and natural gas have the option of choosing between two accounting approaches: the "successful efforts" (SE) method and the "full cost" (FC) method. These differ in the treatment of specific operating expenses relating to the exploration of new oil and natural gas reserves. The successful efforts (SE) method allows a company to capitalize only those expenses associated with successfully locating new oil and natural gas reserves. For unsuccessful (or "dry hole") results, the associated operating costs are immediately charged against revenues for that period. The alternative approach, known as the full cost (FC) method, allows all operating expenses relating to locating new oil and gas reserves - regardless of the outcome - to be capitalized. [Accounting For Differences In Oil And Gas Accounting http://www.investopedia.com/articles/fundamental-analysis/08/oil-gas.asp#ixzz3lIdiR6Jf] Depending upon the accounting method, the unsuccessful exploration costs may not be captured under D&A, and thus D&A may understate the true cost of finding and replacing each barrel. Of course you then need to also incorporate your own views about whether it will be more expensive in the future to replace each barrel of oil or oil-equivalent, as noted in the previous post.

Rb, I don't think there is a nice way to say this so I'll just say it: you are completely clueless with regards to computer security. That's no problem since it isn't your job, but it's probably good to realize this before you form an opinion on anything security related. For example, you think hackers have to break through IB's awesome xxx-bit encryption. Sure, they are not going to do that, but that's almost never how someone/something is hacked. There are tons of attack vectors, and usually the goal is to obtain your username and password (for example: installing malware on your pc to intercept your keyboard input, guess weak passwords, hack another site and try if you use the same password, and so many more options!). Once they have acquired this combination they can log in, and do whatever they want with your account. Unless of course you have 2-factor authentication and they also have to acquire something physical. x2. This is why US government has gone to two-factor authentication. Too many idiots leaving their passwords and usernames written down on a piece of paper under their keyboard (seriously! - and this is not just people in government, includes many Fortune 500 companies), or giving up their passwords and usernames via bogus phishing emails from the Prince of (insert name of real or fictitious African Country) because the Prince really really really needs to give you a million dollars, and it will only cost you $1,000 to get the million wired to your bank account.... Because of this, I now need two sets of usernames and passwords, plus a controlled access card with a separate PIN that must be inserted into the computer, in order to get onto my computer. And there is serious discussion about taking this a step further to three-factor authentication by incorporating either finger prints, facial recognition, voice recognition, or retina recognition. I am not a security expert and have no idea how the recognition piece works or is implemented, but they do seem to be talking seriously about moving in that direction. Which brings this back to security for an investment account. For many of us, the investment account is our biggest financial asset, bigger than the primary residence. So RB, what's the big deal with a second security step, and why wouldn't you want that additional security? Legislation may protect you in the end, but what's the opportunity cost of having $0.00 for however many months while you resolve the issue through court/FINRA/IIROC

Gimme a break. Establishing a forward operating base is not a sign of bilateral cooperating between Russia and the United States. Russia is protecting their interests in Syria by going after ISIS and propping up Assad. If you don't recall, Assad and Putin were good buddies. More importantly, Tartus is Russia's primary (and up until very recently their only) deep sea naval base in the Mediterranean. It is hard to confront NATO in the Mediterranean when your closest naval bases for the Russian Atlantic Fleet happen to be on the north side of the Nordic countries. Also don't forget that Russia's influence over Syria, coupled with their defacto puppet states in the Caucaus Region, have prevented countries in the Middle East from building over-land pipelines to Europe for natural gas and crude oil. Gasprom is a clear beneficiary of this strategy. Finally, don't forget that Putin wants to sell military hardware to Assad, some of which is prohibited by sanctions and other agreements. A forward operating base provides great cover for bringing in prohibited military equipment and munitions, all under the guise of be used by the Russian military. So what if the Syrian Army drives off with a few tanks, MRLS's, and other munitions prohibited by the Geneva Convention? Putin sure doesn't care as long as he gets paid.

If I had to pick a play on ethylene and LPG's, I think I would pick Enterprise Product Partners (EPD). Premier midstream assets in the Gulf Region for moving natural gas liquids, ethane, propylene, etc. Also has premier waterfront assets for loading ships with ethane, LPG's, etc, along with dockspace for storage. For most folks on this board, I suspect EPD is probably not sexy enough or undervalued enough. With that said, if I have to play oil/gas, I generally play midstream and I go with the folks who are probably the most respected, and most shareholder friendly, midstream operators in the United States. The Energy Transfer family (ETE, ETP, SUN, SXL), , or the Williams Family (WMB/WPZ) would also be decent choices if trying to play natural gas and natural gas liquids. WMB/WPZ probably more focused on natural gas than Energy Transfer and Enterprise Product Partners.

That is the nature of the cyclical beast, prices go up and the rigs start working again. With that said, I don't forsee $6 or $7 natural gas in the next few years. When thinking about the supply of natural gas, there are three sources to consider: (1) Wells that are completed, connected, and supplying gas; (2) Wells that are completed but unconnected; (3) Uncompleted wells (i.e. potential drilling sites). From skimming through 10Q's, there appear to be a fair number of completed wells that have not been connected yet to local/adjacent gathering systems. This seems to be an intentional phenomenon. As the price of natural gas creeps up, these will be connected fairly quickly and we will see another deluge of natural gas hitting the system.

I wouldn't read anything into that. Shopping around for military hardware and aerospace equipment is a pretty common practice, even if just to get some leverage when dealing with the western companies like Lockheed, Boeing, etc. They may have also learned a little bit from Iran's experience after the Shah was deposed. Iran had a bunch of american military hardware (primarily fighter planes), but could not operate any of the fighter planes because the United States government prohibited american companies from supplying parts needed to keep the planes operational. The same thing happened with Iranian civil aviation...you would be frightened if you saw some of the civil aerospace equipment they are operating right now.

Bought nothing today... But I have to say, the feeling I get when I see the Dow open down 1,000 points is the same feeling I had as a kid when we showed up to amusement parks like Disney World and Busch Gardens....I just get so damn excited! I hope every day this week are >500 point down days for the Dow... If we are truly lucky, maybe we can shed ~500 S&P points this week.

OPEC's decision is not relevant. Amongst OPEC, the only relevant actors in this drama are Saudi Arabia Kuwait, Kuwait, and to a lesser extent Irag and UAE. Saudi Arabia and Kuwait alone are responsible for ~50% of OPEC production. Add in UAE and Irag production, and that is ~65% of OPEC production. The primary dissenting voices in OPEC are the South Americans (Venezuela, Ecuador), the Africans (Nigeria, Angola), and Iran. Saudi Arabia and Kuwait are smart. They recognize that there are two threats to their economic well-being: (1) Competing sources of petroleum production that crowd out OPEC production; and (2) Renewable energy sources that crowd out petroleum use (i.e. electric cars, synthetic substitutes for petroleum-based oils/solvents/plastics). IMHO, #2 is the primary threat to OPEC. The higher the price of oil, the more it makes sense to produce and purchase hybrids, electric cars, hydrogen cars, bio-fuel cars, and synthetic materials that replace petroleum for production of oils, solvents, and plastics. There are many folks who seem to think that the oil recovery will be V-shaped, or if not v-shaped, a relatively rapid recovery going into early 2016. I would caution those folks against that mindset. The primary actors in OPEC have strong incentives to keep oil prices very low for a very very long time. Low oil prices over a multi-year period will drive investment decisions away from renewables and alternative sources and back towards petroleum-based solutions. The Saudi's and Kuwaiti's recognize this, and I suspect they will be the driving force behind OPEC's decision to keep production high for a long period of time. And let's be honest, when have you ever seen OPEC members (other than Saudi Arabia and Kuwait) cut oil production for reasons other than war and terrorism? Every time production cuts are expected, the banana republics in OPEC expect Saudi Arabia and Kuwait to make the cuts. None of the other members are going to cut production, and the Saudi's/Kuwaiti's certainty aren't going to cut production. In fact, the Saudi's have been investing money recently to expand production beyond their current capacity.

All of this talk about "variant perception" makes my head feel like it is going to explode. "Variant perception" sounds like a term that was coined by someone looking to justify their excessive 2 and 20 compensation. In investing, every trade you make is ultimately taking a position (buyer) that is different than another market participant's position (seller). Thus every position you take is a "variant perception" relative to someone else. Even indexing has an element of "variant perception" since you are making the conscious decision to put money in the market as opposed to selling your position in the market. Ultimately the concept of "variant perception" is irrelevant, IMHO. All that matters is whether you got the direction right or wrong at your entry point. And in that respect, I tend to think it is easier to get the direction right when your view/perception contradicts the prevalent view of the market.

WPZ is a good one, two of the premier blue-chip NG pipeline assets in the United States (transco line and northwest line) - I think folks underestimate the value of the Transco line given location, supply points (Marcellus and GC), and numerous demand points, Out of curiosity, is there a reason you chose WPZ rather than ETP ? I like both MLP's, although ETP seems to have a similar yield with better growth prospects (at least so far as the committed backlog indicates)

I already have shares in ETE to benefit from the IDR's and GP interest that they now have in ETP, SXL, and SUN. These shares will also benefit from the Lake Charles LNG project, which I think has a 75/25 chance of moving forward given it is on a brownfield site in the Gulf area. Ultimately I suspect that the Lake Charles LNG stake will be spun off as a seperate MLP under the ETE umbrella. This benefits ETP for two reasons: (1) ETP holds a 40% stake in the project which has nameplate capcaity of 16 mtpa; and (2) The Lake Charles LNG site is serviced solely by ETP steel. The 16 mtpa would be additional gas moving through ETP steel over and above what is already moving through those pipes right now. Obviously there is the distinct possiblity that the Lake Charles LNG project will not move ahead, but if I had to guess, we will probably see three LNG projects built in the United States over the next decade (Sabine Pass, Lake Charles, and Cove Point).

Existing pipes are the primary support for my thesis that ETP and EPD are reasonable purchases at the current price/yield. I think the market is overly pessimistic about the state of the current business model. With that said, future pipes add a little bit of upside to ETP and EPD. For instance, the ETE/ETP/SUN/SXL conglomerate has an EV of ~$100 billion (probably a bit less after today). They have about ~$22 billion of planned projects, of which more than 75% of the projects appear to already have the firm committments neccessary for construction. More than half of the $22 billion backlog appears to be interstate natural gas lines, NGL lines, and fractionating plants. It is entirely possible that some of their planned pipes do not go forward...that is pretty normal in the pipeline business, and I don't think it prevents them from growing the distribution further.

Sorry, I neglected to address your other point. As a matter of fact, EDP does "compete" with crude transported via rail. As an example, BNSF transports crude via rail from the Mississipian Lime Shale, the Eagle Ford area, and the Barrnet Shale. These are all areas served by EPD's crude pipelines. I use the word "compete" loosely because crude by pipeline is substantially cheaper than crude by rail. As a result, when marginal production is shut-in due to the crude price, crude by rail is what suffers.

In the midstream world, proposed projects are not constructed without firm commitments. Those firm commitments, in almost every case, take the form of take-or-pay contracts that last 15-20 years. So the comments that volumes may not materialize is quite irrelevant. And yes, I realize that ETP's yield is almot 9%...I specifically stated that in my earlier post.

How do you know EPD and ETP aren't hurt by weakness in O&G? Oil is being hit by supply, but it's also being hit by demand, what does that tell you about volumes? Pick up the ETP or EPD 10Q and read it, that will tell you all you need to know about crude volumes. But since you may not do that, I will spell it out, in the context of ETP: 1. 10% of EBITDA from ETP is derived from liquids. Of this , off the top of my head, half is crude and the other half are NGL's. So 5% of EBITDA might be impacted by lower crude prices. 2. 10% of EBITDA is derived from their retail segment (i.e. retail gasoline and retail diesel). Margins tend to go up for retail gasoline and diesel sales when crude prices drop. 3. Most, but not all, ETP crude pipeline service is based on take-or-pay contracts. You dont ship? No problem, you still pay. 4. When O&G companies go bankrupt, trustees attempt to maximize cash flow by continuing to produce oil and gas. Hard to void your take-or-pay contract if you still want to get gas/oil to the market. 5. When crude volumes decrease, the first shut-ins tend to occur with crude shipped by rail (substantially more expensive than pipeline transport). The remaining crude volumes continue to be shipped by pipeline. EPD generates more EBITDA from crude oil pipelines, but they are also predominantly moving crude oil from basins with very low costs of production and very close proximity to the gulf refinery complex (i.e. well established basins in Texas). As such, they are not impacted much by reduced crude volumes. While I generally think that crude oil consumption throughout the world will decrease over time, you should also recognize that it is becoming cheaper for Europeans to import refined gasoline and diesel from the United States than it is to refine crude in Europe. Therefore reductions in crude oil consumption will impact refiners less in the United States than it will in other countries, and thus it will have less of an impact on pipeline operators.

Buying EPD and ETP. Both have sold off quite a bit...I am happy to nibble on some EPD @ a 5.8% yield and ETP @ a 8.8% yield. People seem to think that the weakness in oil and gas producers mean that the midstream companies are f*cked also. What most forget is that commodities operate in a cycle...low commodity prices tend to drive higher demand. In the case of ETP and EPD, both have substantial access to demand drivers such as our country's premier petrochemical complex and Mexico's increasing appetite for low-cost natural gas. Also picking up some REIT's that have been slaughtered recently (GPT and MPW). Everybody in the market seems to think that rising rates spell doom for REITs. However, I have a tough time seeing how the Fed raises rates by more than 25 or 50 basis points over the next two years, so the cost of REIT funding will not increase that much. Moreover, rising rates generally indicate an improving economy which yields higher rents for existing properties under management...beneficial for REITs. I've also been looking at some of the short-term debt of mid- and small-sized independent oil and gas companies. While there are some real stinkers out there, the general fear in the market of O&G bankruptcies has caused some decent pricing on O&G short-term debt. Reasonable coupons and pretty decent yield-to-maturity. I haven't pulled the trigger yet, but am getting closer on some of the senior stuff... heads I win, tails I end up with a stake in a restructured company with decent O&G assets.

I've only been a federal employee for a few years, but I will share my perspective on TSP. I put all of my new contributions into the G-Fund. I think right now the G-Fund is earning a 2.5% annual return, so barely keeping up with inflation. I view this like a pot of cash to invest as opportunities arise. As the market is moving up or side-ways, my biweekly contributions continue to build up the balance of money in the G-Fund. When the market starts to fall, I use the mechanical process listed below. The mechanical process keeps me sane. When we have a 5% pullback in the market, I put 50% of the money sitting in the G-Fund into the C-Fund (1/3), F-Fund (1/3) and the S-Fund (1/3). If the market continues to a 10% drop, I put the remaining G-Fund money into the C-Fund(1/3), F-Fund (1/3) and S-Fund (1/3). As the market rises or moves sideways, I do not remove money from the C-Fund, F-Fund, or S-Fund. In February or March, I rebalance the C-Fund, F-Fund, and S-Fund so that each represent 1/3% of my TSP's non-G-Fund assets.