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investor1

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  1. Obviously per this thread, smart people can disagree on this. Everyone has a different combination of current liquidity needs, return opportunity set for capital investment, view on future interest rates, whether they live in a recourse or non-recourse state for mortgage debt, age and associated risk tolerance… the list goes on. Personally, I chose the 10-Yr I/O for a few reasons: I like to be liquid. I think the investable opportunity set is better than a 2.6% return from forced mortgage paydown. I don’t think it’s likely we return to a tighter fiscal environment with materially higher rates other than ephemeral blips. Both parties print money on the regular, and go bananas in any crisis. Continued dollar devaluation is highly likely in my view. This choice doesn’t have catastrophic risk for me (i.e. it’s sized such that in the downside scenario of much higher rates, I’d just pay off the loan and stay in my home). For fun, I'll describe some math using the rates previously mentioned and a $1M loan (forgive any errors!): I/O at 2.75% Year 10 Loan Balance: $1,000,000 Total Interest Paid: $275,000 30-Yr Fixed at 2.625% Year 10 Loan Balance: ~$750,000 Total Interest Paid: ~$230,000 Total Principal Paid: ~$250,000 So in the I/O case, you have ~$205,000 extra cash to invest. Let’s say that amount is invested as it becomes available (monthly) at a 10% annual rate of return: the $205,000 saved compounds to ~$350,000 at Year 10. At a 20% annual return, it’s ~$650,000.
  2. Second FRB. Data point: 10/1 interest-only at 2.75% and 70% LTV closed early June. Need to move banking to them.
  3. BWP. Loews call right should be announced by Friday (6/29) at ~$12.05 per unit (per 8-K filed today). Spread to current is ~3.5%.
  4. The graphic in the article below is particularly illustrative of the pain in WCS pricing. Question for this thread: Is the WCS basis blow-out "priced in" to the current valuations of Canadian heavy oil exposed E&Ps, or will there be a reckoning (and perhaps better entry point) after YE results? http://business.financialpost.com/commodities/energy/canadian-oil-prices-buckle-after-railway-refuses-to-be-swing-shipper
  5. Per Tudor Pickering Holt (emphasis added): "As expected, Enbridge announced apportionments on the Mainline for February, with record curtailments, as all pipe egress out of Western Canada is effectively full. February nominations for heavy crude Lines 4 and 67 were apportioned by 46% from 36% in January, roughly equal to the highest levels seen previously from 2014-2015, with WCS differentials widening a few bucks to ~$26.50/bbl. On the light crude Lines 2 and 3, apportionments were 23%, also up slightly from January apportionment of 17%, which looks to be the highest level in recent years. Edmonton Par differentials widened similarly to $7.50/bbl off of WTI, from the $4.50/bbl seen ahead of nominations. We continue to expect apportionment for March volumes on the Mainline as Suncor’s Fort Hills project is primed for ramp-up, with pipeline and rail constraints expected to clear up and tighten differentials in a 2Q18 timeframe."
  6. Glenn Reeves is an internet hero who has meticulously recreated most federal tax forms and schedules in a detailed excel workbook each year since 1997. He provides the workbook on his website (https://sites.google.com/site/excel1040/) for free. I found it helpful to be able to trace the logic of the different inputs and calculations. Additionally, I believe the Big Three online tax solutions (Turbotax, HRB, TaxAct) allow you to fill in your information and calculate your taxes without having to submit/complete the return (and therefore pay). You can do this to cross-check your taxes, but you won't get granular access to your information in the government forms without paying.
  7. Would be nice. The spread is particularly painful for a lot of heavy oil producers that hedge their WTI and are basis exposed. CONA is a great example. Probably why the stock hasn't reacted to oil prices. It's hard to see how the spread narrows more permanently over the next 2-3 years. You have continued supply coming online in excess of pipeline takeaway capacity. That means that rail transport costs will set the differential (US$15-$20 / bbl), no matter how much Venezuelan and Mexican imports decrease.
  8. Another one: https://www.cnbc.com/2017/12/21/long-island-iced-tea-micro-cap-adds-blockchain-to-name-and-stock-soars.html
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