lnofeisone

I think the mean reversion argument based on charts is flawed. I agree that there will be few BKs in E&P but it will be localized to mostly small E&P. My position is that energy will start turning around in 2021 or so. My rationale is that many of the CAPEX programs are funded through 2020-2021 and debt markets are basically off limits/very expensive for anything energy. This will force major E&P, mid-stream, etc. to focus on internal funding. As this happens, stocks will rerate. KMI is an example of what the playbook will look like. The trick is to discern quality players (e.g., WMB, MPLX, etc. vs. SMLP) vs. those that are too constrained by debt. You do get paid decent (largely sustainable) dividends/distributions while waiting. I'm a bit overweight (compared to the rest of my holdings) in energy and (very) slowly adding.

Maybe I'm missing something. 1) Someone showed off their 9th grade skill at using Excel and getting a best fit line 2) Reddit peanut gallery is now cheering on every day that the model gets the number approximately correct If this were a legitimate model I'd expect a lot more metrics (root mean square and mean absolute errors at a minimum), time dependency, cure rate, etc. I can also guarantee that the model shown and the equation are wrong.

Same. Absolutely loath it. I run multiple teams of developers and data scientists (so maybe wrong personalities/type of work for an open office) and I frequently have to message them so they take off their headphones for a conversation. We also have a very liberal work from home policy. This message is largely lost on my company as they've been opening up floor after floor in just about every office I've been in (we have one in most major cities).

I found this to be very informative. The sheer magnitude of the update between Jan 17th and 22nd is staggering. Really explains China's drastic measures. https://www.imperial.ac.uk/mrc-global-infectious-disease-analysis/news--wuhan-coronavirus/?fbclid=IwAR1YkF6-jQQqI8IYkAWIqhjAn1M5gNngTV4SNgH030OkKlE9y3leTB3uveQ *Edited for date correction.

I've been trying to sell some NVAX covered calls but can't get a good fill. Put prices are out of this world but I'm not comfortable to short them.

MPLX and WMB

I heard this on the radio and made a note to follow up. I mean, Australia seems to be doing it so why not US? He did say we are importing deflation so as long as you don't import too much of it or too little, things will stay as is. Maybe, this time is different :). On a more serious note, I'm having hard time identifying excesses. Everyone around me (and I get the concept of selection bias) is cautious and is sitting in 60/40 portfolios and this includes newcomers to the market, old timers, and those who bought and lost houses in 2007. Market climbs the wall of worry.

BG - is there a lot of effort involved with 1031? I thought it was just a form to be signed by the buyer. I've seen a few of those contingencies in listings but nothing we've put a bid on had that stipulation.

I'm looking to buy a house and have looked into FSBO. It's part of my daily routine to check RedFin and www.forsalebyowner.com. I don't know if marketing is an issue (Internet rectified that) or buyer's agent not wanting to show the house (I've seen some listings where the seller clearly specified that the buyer agent will get x %) are at fault but the price certainly is. Most of FSBOs I've seen are egregiously overpriced. For example, https://www.forsalebyowner.com/listing/908-8th-St-NE-Washington-DC/5c927fdfe49e3a8c318b4569. There is a similar (about the same plot of land, needs gut-reno, substantially better location, near a metro) currently unable to move for $550k.

BG - I, too, like CLMT and would love for it to trade at $20-$30 ;D but will probably start selling around $15. I like the new CEO, love the fact that they currently have pessimistic shareholder base, and lack distribution/dividend. Our math is about the same other than the sale price of Montana refinery which is impacting my valuations. Would love to learn the basis of estimate for $500M sale tag as I think they will be lucky to get $300M with my range being $220 to $375M. My reasoning is that $100M of earnings that comes from fuel segment come from between Shreveport (60k bpd with non-fuel production) and Montana (25k bpd exclusively fuel production). The other two refineries don't make fuels. Shreveport facility capacities are 16k bpd for naptha, 6.5k bpd for asphalt and road oil, 12.5k for lubricants, incidentally making it a 25k bpd fuel refinery. Back of the envelope calculations, crack spread for Montanta is 3x crack spread in Shreveport. So on a good day (WCS will not stay this depressed), I attribute $75M to Montana refinery. At 5x EBIDTA, that's $375M. Couple it with this https://www.reuters.com/article/us-usa-oil-refiner-sales/u-s-refinery-sales-hit-the-brakes-with-5-of-capacity-on-block-idUSKBN1Z90GN and you probably have to discount the $375M number...a lot. Reference for capacity numbers: http://www.dnr.louisiana.gov/assets/TAD/reports/refinery_survey/RefineryReport_2017.pdf (Tables 14 and 15) Another way to arrive to valuations: Montana is a 25k bpd capacity refinery and is about the same size as San Antonio refinery (21k bpd) which CLMT unloaded for $65M. Montant is 3x more profitable, so $65M*3 = $205M.

My read is that energy (I'm in the early stages on learning up on agro) buys wouldn't be an incremental addition to previous purchases. It would just be a total of $50B which means going back to previous purchases and adding another $35-40B of purchases. I don't think those purchases will be in oil but nat gas will certainly benefit. I think a few midstream worth a look (MMP, KMI), followed by export facilities (LNG, TELL - a hyper spec stock that could be LNG 2.0 if they execute), followed by producers (I'd say consider looking into EOG, DVN, and maybe WPX). I also think it will be hard to get to $50B/year in energy alone so I suspect there will buying parts and services from SLB, et. al. to meet the remaining commitments of the deal. So lots of ways to play this if it holds. Some back of the envelope calculations for reference: Let's say we go back to 15M barrels of oil/mo * 12 months * 60 $ /barrel = 10.8B per year in oil. (https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTTEXCH1&f=M). China can only accommodate so much of our oil due to the design of their refineries (heavier crude) so I think oil will be capped. If we go back to the LNG imports and get back to 23BCF/ month that gets us to $1B per year in LNG. We are still very short of the $50B mark so I suspect this will be an area of growth. https://fingfx.thomsonreuters.com/gfx/editorcharts/USA-TRADE-CHINA-LNG/0H001PBVL68W/index.html. We can certainly accommodate this growth because we have 7 operational export terminals in the US and can get to 23BCF in about 3-4 days (average time to fill up tankers). China can absorb the LNG and is building 12 more import facilities so they will be willing takers (their eco policies are matching up to that) for years to come. The question will be who will offer a better price - Qatar, Malaysia, Australia, or the US. If gas prices stay as low as they are, we are very competitive even if Asian prices collapse (as they have in the last year).

+1 on this. Definitely getting some shares put to me lest we hit 52 before Friday.

MCK was wise to start settling in 2017s. MNK not so much and will be dealing with this for some time. I took a look at this few months back. Some thoughts: 1) Purdue was the smallest by pill count (though not potency) market share but the scummiest of the bunch. They went for the $12B global settlement + $3B penalty against the owning family (the family is getting away easy here). Last I read, the proposed structure was something like $4B in medication + around $8B of cash derived from profits of medication. I think this will serve as a high bar for any other global settlement. 2) TEVA would be wise to take the $20B global settlement of which nearly all is in the form of providing drugs to the impacted counties/cities/states. 3) Looks like ENDP is taking BofA approach of litigating/settling on case by case basis. If that's the route they want to take, they would be my least preferred holding, even if they manage to come out ahead on costs and get better deals. Litigating against motivated gov't actors will be expensive and introduces too much uncertainty. 4) Others (e.g., ABC, WBA, MCK, JNJ) will probably trade up or down on opioid-related news as they have some tangential exposure and there might be some irrationality here.

Sold 52 WFC puts expiring this Friday.

I really like Vanguard's dilapidated look (though sometimes I get the updated screen edition and it looks worse). I keep my core holdings there and the interface is so clunky it pains me to even think about trading on it. This is probably the reason why I haven't had many sell transactions on Vanguard over the years and that portfolio has been outperforming my actively managed account by a wide margin. I guess, I'm glad that the fees are now 0. :)

In the pipeline space I rotated into EPD (great management, interests align with Duncan family), ET (amazing assets that trade at Kelcy Warren discount), WMB (amazing assets at good price...and eventually NY will figure out that they need to expand their pipelines), and tiny bit of AM. I think all these names can trade up 30-50%. I like selling KMI puts when it dips to 20s. Wouldn't mind getting some shares assigned to me. I like CNXM but don't love the price. For prefs. I have TGPpA (this one is a shipper so I generally don't buy common but it's worth a look) and CEQPp. For debt I bought some Sanchez bonds when they were trading at 5 cents on the dollar (mostly learning/entertainment value of going through BK). Currently they are trading at 3.75 cents on the dollar ;D.

CBOE has historical data (https://datashop.cboe.com/option-quotes-end-of-day-with-calcs) though it can be pricy. The quote calculator is on the right. TD has a real time API + code that takes about 30 minutes to set up to get bulk data.

I have been slowly accumulating energy in the form of VGELX + select names + prefs. + debt and very much overweight in the sector. My valuations cap oil at 75 (on WTI). My rationale is that outside of a really major disruption (Saudi field bombing, Iran flare-up are meaningless in today's world) it's just too easy to get the spigot going. Because of this, I think E&P companies (especially 2nd and 3rd tier) are not going to do well as they will pump with every price pop just to cover drilling + debt. Though their stock might be much more volatile and can probably outperform...or go to 0 (e.g., Sanchez). My other reasons, in no particular order, are: 1) I love the fact that ESGs are getting rid of their stocks (though don't really alter their energy use behavior). 2) Across the board, there is a super disgruntled and pessimistic shareholder base. Performance, MLP structure, MLP conversions, GP take unders, take your pick. 2) Demand is still growing. 3) Couple that with newfound religion of debt paydown by many energy companies (e.g., KMI) and stricter capital allocation. Markets are also not very kind to companies trying to raise debt. 4) Trash assets are being idled or being severely discounted (there is a reason why SMLP is trading where it is). This is a net positive for opportunistic buyers. Edited for grammar.

CLMT consist of refinery and specialty chemicals. Specialty chemicals are much more stable in terms of revenue, margins, and volumes shipped. Refinery earnings can be very volatile (slide 4 of their annual presentation http://calumetspecialty.investorroom.com/Events). Looking through earnings reports they clearly break out margins on specialty but show nothing about fuels. The reason is the volatility of earnings/losses. CLMT is moving away from fuels by selling their refineries. The numbers you are referencing (I'm guessing here because I don't know what you used to get them and they different [albeit, slightly] from what I have) combine both segments. Sale of the Montana refinery shouldn't be too big of a hit on the earnings but should put a dent in debt thus improving the ROIC. Operating margins should go up as well. I'd also highlight cashflow component to see (what I perceive) a cheaply priced business with few potential catalysts. Cheers

CLMT (Qualitative) Fundamentals: -reasonably strong core business -it's an MLP and nobody wants to own it Catalysts: -sale of refinery (which isn't exactly a done deal but has been clearly signaled to be up for sale) + ongoing business will contribute to further debt paydown -stock is down significantly and will need to re-establish a shareholder base

I've been slowly picking up AM shares for tax harvesting. My secondary thesis for selecting AM is the fact $1.23 distribution doesn't show up in some financial filters (e.g., SeekingAlpha hasn't caught up yet but) and looks like updates will show up come January.

I'm more of a funds person to be honest. But going back to the earlier idea of contrarianism, I was reminded of Russia recently. Cheap and hated (if not quite as much as a couple of years ago). I've never felt too comfortable with the governance. While it's the 'one that everyone owns', I'd have thought that Sberbank would have a pretty decent chance of doing well over time. If you want retail, then I suppose X5 would be one to look at. At the more obvious end, I find FEET (Fundsmith EM IT) becoming gradually more interesting, whether for owning or inspiration. The portfolio's been tightened up, and is full of super impressive EM consumer companies. They've just been too crazily expensive I think, even for their impressive stats. They seem to be slowly getting a bit cheaper. I wouldn't expect them ever to be 'cheap' (except in a 2008 situation) as they're just too high quality and profitable, but if they become semi-reasonably priced, they should be no-brainers for the long-term. Will revisit FEET, thanks. I also discovered SEDY this week - emerging markets dividend ETF, but what it really opened my eyes to is some optically very cheap Russian companies. Tempted by a small position. I've had DVYE (the US version of SEDY) on my radar for a while. In my notes I scribbled "no Sberbank?" and curious if anyone knows why wouldn't they hold it given the other holdings. Also, VTB (another russian bank) has (small) exposure to Africa.

Sold OLN 16.5 puts expiring next week.

Wrote OLN puts.

It's a capital gain/loss.