Zorrofan

Sanj, What ever happened with the $6 billion lawsuit FFH filed? That money could be put to good use by Prem ;D cheers Zorro

No, not by me! But enjoy it away..... http://blogs.wsj.com/economics/2010/11/15/open-letter-to-ben-bernanke/ cheers Zorro

I always thought the purpose of QE1 was to save the big financial firms (which it did) and to save the financial system from collapse (so far so good :-\). The purpose of QE2 is to stimulate economic growth in the economy. Most people think it means flooding the markets with liquidity but my understanding (and I may be wrong) is that the FED creates money to buy longer dated bonds but the net effect overall is liquidity nuteral. This does however keep short-term rates low and the FED by buying 10 year bonds keeps longer term rates lower. The hope is that lower rates will stimulate economic activity by companies and consumers both. This is where it breaks down - over leveraged consumers for the most part are not going to go deeper in debt at this point, they need to deleverage which will do nothing to stimulate growth. My $0.02 .... cheers Zorro

Maybe i've lost my marbles, but it seems that Ward has a plan for really building shareholder value. He just needs to execute. The next few quarters may be key to showing if SD can pull it off. cheers Zorro

broxburnboy, thanks for the link. I look forward to reading it! cheers Zorro

Your idea of shorting the 30 year bond is interesting but rather than a pure short what about an ETF that is short the bond instead? I think you can get etf funds that are 2 or 3 times short for leverage as well as ones that are simply inverse plays on the bonds. I was thinking of a safe way to short the market in general (other than a put on the SPY) where I can get a bit of leverage but not lose to much if the market correction takes longer than expected. I know for example the VXX offers a leveraged play but loses too much each month on the rollover, but I was thinking of the VXZ? Any thoughts.... cheers Zorro

You might want to check out the Longleaf Way thread for a good discussion of SD vs CHK. cheers Zorro

Why must we always attack? Longleaf is a highly respected firm with a very decent longterm record through one of the most difficult investing periods since the great depression. Let us debate different viewpoints not attack..... cheers Zorro

Good news indeed. I was hoping that they would be buying as it adds support to our original thesis. Thanks for posting! cheers Zorro

Dr. Lacy Hunt, Hoisington Investment Mgt. Co comments on jobs numbers and John Husseman comments on Bernanke Leaping into a Liquidity Trap.....I know Prem follows Hoisington so I thought this might be interesting. http://www.businessinsider.com/mauldin-unemployment-2010-11 cheers Zorro

Myth, Thanks for the write up. If it helps at all, I have the same problem.... :-[ cheers Zorro

http://hussmanfunds.com/wmc/wmc101108.htm The old saying is don't fight the FED but is the FED leading the markets into the mother of all corrections? Interesting reading...... cheers Zorro

Myth, are the converts trading and do you have the ticker symbols? I thought they were private placements? cheers Zorro

I think the long term story looks pretty good - we just need to give Ward time to execute. I hope they don't give up any of the new Mississippian play as I think it looks like it really could be the next big thing. I would rather Ward slowed things down and lived within cashflow then give away too much of the potential longer-term. cheers Zorro

Well I gave the conference call a quick listen and went over the new presentation, so here are my $0.02.... - the market really hated the dilution. I was not overly thrilled with it but on the other hand if it means they drill more wells at 50%- 100% returns its not all bad. I would like it even more if FFH was the buyer of the majority of the convertibles - the CFO leaving may have spooked the markets but I think it is likely a non-event - the guidance on oil production is a bit confusing. SD is already ramped up to about 28,000 BOD (lets ignore nat gas). They are increasing the number of wells for this year and drilling over 900 wells next year, mostly oil. Yet guidance is only increasing to 11.2 MBO? This is an average of 30,685 BOD for 2011. I would have thought it would be higher than that. i would also liked to have had an estimate of next years exit rate of production of oil - having said all that I think the market hasn't figured out SD is an oil company now with really great nat gas assets . Since SD won't give an exit rate for 2011 oil production I'll take a crack at it. If they drill 900 wells, 95% oil, it means they are drilling 850 oil wells. 850 wells x 50 BOD x 80% interest on average equals 34,000 BOD added to production. Add the current 28,000 BOD less 15,000 for depletion gives an exit rate of 47,000 BOD by the end of 2011. - if you believe oil prices are going to stay high or go even higher then SD has some great assests and are poised to do well. It would be nice to see them adding hedges but they may feel they have hedged enough to cover the basic cashflow needs and want to keep the balance of increasing production available for even higher prices. ML is predicting $100 by the end of next year Anyone adding or are you waiting to see if TW can execute going forward? cheers Zorro

This is my understanding, so take it with a grain of salt....With QE2 the printing press analogy may not be the best. Yes, the FED is creating money but they are using it to buy longer term TBills. They are doing this for two reasons: first short-term rates can't really go any lower; secondly they hope that by buying longer dated bonds they can drive down longer-term interest rates (in the hope that already over-leveraged consumers will once again start buying). The net effect is to basically cancel out newly created money when they buy long dated bonds. The danger is they create another asset bubble. To me this shows how weak the economy really is and I wonder why the market dosen't get it? But then maybe I don't get it.... cheers Zorro

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NjkxNDZ8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1 cheers Zorro

Interesting - thanks for posting! cheers Zorro

Myth, I like your list (and don't disagree) but, if you don't mind, I am curious about your inclusion of BYD.UN with the likes of L and LUK? Would you mind explaining what your theis is for this company? thanks Zorro

not sure what his topic will be or if it is a re-broadcast...... cheers Zorro

Sanj - another great find! Do you ever rest? ;D cheers Zorro

It appears that Jeremy Grantham is not a fan of the FED or of QE2. http://www.gmo.com/websitecontent/JGLetter_NightofLivingFed_3Q10.pdf It does raise the question: if things are improving so much why do we need QE2? I have read/heard arguments for and against QE2. It seems to me that this will do nothing to stimulate economic growth (the FED is pushing on a string given that more debt is not the answer to a balance sheet recession) and longer term the added debt is only going to cause more problems. The market however is pricing in QE2 as if the economy will recover much faster than I think is realistic. Are we setting up for a major correction or have I become too much a permabear? cheers Zorro

I like the sound of that better! Anyone have a ball park guess what it would cost for Mid American to swallow this? The private equity firms, if they can't reach a deal, may be willing to unload at a loss instead. That would be ironic - they end up taking the haircut instead of Buffett! cheers Zorro

Thanks - after all the feedback i'm leaning more towards the iPad now rather than the Kindle. Waiting for the second generation iPad is a good idea! cheers Zorro

Is 16 GB enough for the ipad? Or is it better to go with 32? cheers Zorro