Cor
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Posts posted by Cor
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On 11/3/2023 at 6:00 PM, SharperDingaan said:
We own both of these, reduced our weighting, and have redeployed into other WCSB o/g. The service coy's are a seasonal Nov-June trade, and most would expect the focus this season to be primarily on M&A vs new drilling. Nobody wants to pressure daily rates more than they have to; expect drilling plans adjusted to pick up available rigs, but that's about it.
The service side should thrive next season. All the consolidators will be 'manufacturing', higher-end rigs will be on-site longer, drilling more and longer length horizontal wells; lower-end rigs will also be boring for water floods. Assuming USD 70-80 WTI, most wells should have payback periods < 1 yr; and it'll be a great time for the rig pigs. For the service side; higher day rates, a lot more days on site, and not many more net new rigs ... as there just aren't the crews.
There may be some M&A in the services space, but expect it to be small, and primarily tuck-in acquisitions. It's also Canada; take your time over winter/spring, favour quality over quantity, and use the sales to fill up the pantry. If you have the life stage, and the risk tolerance; favour quantity as there could well be some life-changing opportunities.
May we all do well.
SD
Thank you SD, this is very informative.
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SD, what’s your take on how M&A activity affects Ensign and PD? On the recent Ensign earnings call leadership called out weaker demand for their rigs as a result of M&A activity and it looks like their share price took a dive on this news?
Trying to figure out if it’s maybe worth exiting Ensign now if this trend will continue say into 2025?
Or is there a reasonable chance someone offers to buy Ensign and rig utilization becomes a moot point?
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I know somehow who used to promote a GLP-1 agonist competing with Ozempic and made by Eli Lilly. I believe those drugs help greatly with weight loss but are always co-administered with a strong recommendation to diet and exercise (both of which are considered first line therapy whereas Ozempic is secondary).
In practice most patients just don’t do the dieting and exercise very well. This is key. What happens is they take these meds, lose weight and instead of also eating less junk food, they actually increase their intake of junk food because why not? -
I like Sync.com as it’s privacy focused, or at least used to be. 2TB at $8/mo. Very convenient for accessing most file formats on the go
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If true, do you guys think some of these advanced materials or tech could end up in the hands of a publicly-traded company for the purposes of reverse engineering and creating something useful to businesses or consumers?
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On 3/22/2023 at 8:55 AM, LC said:
Bought a skiing & fishing outfitter, pizzeria & bar, and HVAC commercial route.
I definitely do not run the shop - I had 3 individuals ready to take over (exec sous chef, HVAC contractor, and a fishing/ski guide). All with 10+ years of corporate experience in a larger market (greater denver/front range) who we are able to install running the majority of the operations in a smaller area (mainly summit county).
We bought the outdoor shop and pizzeria at 1-1.5x last year earnings. The HVAC we bought the existing book of business (stable for 5+ years) for 2x earnings.
All 3 operators get to move to summit county under workforce housing (less housing expense for them), earn more $, and run their shop with partial ownership (and some oversight).
The ski shop is a bit key-man risk as the guide business will probably be a wash: old customers may fall off but our operator will bring his book of business from the front range area. The pizzeria/bar looks very good as the old owner/operator has no actual chef and also was running 3 different foodservice businesses so didn't really have the time to dedicate to it. New operator will be able to improve the menu (see: add salt), expand hours, and manage more events/catering. The HVAC business we bought a commercial book which should remain stable as the old owner will stay on for 6 months, new operator can manage a separate crew for residential runs, and I know a few multifamily developers in summit/grand county who will give us their HVAC business (and also run their catering through us, and provide cheap housing for the 3 new operators).
As a kicker both the outfitter and pizzeria have a surprising amount of cash sales which the prior owners pocketed - so when I say I bought at 1-1.5x earnings, it's even cheaper as there are cash sales unaccounted for. When I bought I just considered it a wash: any cash sales were zero margin and just went to the operator as their "salary". In reality that's probably not the case and should provide additional earnings. Just provides some margin of safety.
LC: Very interesting read, thanks for sharing your experience. I always wondered how these sorts of deals get done when a small business exchanges hands. If you are comfortable sharing, I’m curious about the pizza shop because you mentioned the old owner seemed spread thin between running it and their other businesses. Was this a find through your existing network or a targeted search of some sort? Sounds like a great opportunity for you, congrats! -
1 hour ago, Gregmal said:
CRE is bombed out, so is small tech, so short term the stock probably has some downside, but from the current point in time out, these guys solve major problems in the project management process. Government contracts especially where overpaying for security of ass coverage is commonplace. This just seems like something that can work its way into a space that is still relatively archaic and ripe for disruption. Once in it’s hard to replace. So margin expansion is probably a given, as is decent growth on the base revenue if you look out a few years.
To add to this regarding Procore. Friend of mine works at a competitor. Procore is the dominant player in construction and has the brand name recognition. They grow by digitizing manual project management workflows for net new customers and also by increasing the cost of subscriptions upon renewal. It seems pretty sticky - not quite like SFDC but close so pretty hard to replace.
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Out of curiosity if CAD continues to weaken against USD how would that affect Canadian oil stocks?
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51 minutes ago, Investor20 said:
I am not clear why many here feel job market is strong. Just because people are asking for a raise in high inflationary situation doesn't mean the job market is strong. It could as well mean they cannot have ends meet with present income.
Looking at real weekly earnings (inflation adjusted) there is a steady drop of median from Q2 2020 at 393 to present 358$. That is a whopping 8.9% real earnings drop in last two years.
https://fred.stlouisfed.org/series/LES1252881600Q#
If you were to look at civilian labor force participation, it was at 63.4% in Feb 2020 to present 62.4%. That is a loss of 1%, or over 3 milion employees lost.
Loss of 3 million employees lost from pre-Covid (Jan 2020) and negative 8.9% median real wages hardly show a strong job market. If people want a raise, it only means their expenses went up and need more to have their ends meet.
https://www.bls.gov/charts/employment-situation/civilian-labor-force-participation-rate.htm
The 3M drop you’re referring to would be better viewed in context of how many new jobs were created during this time as well. What seems to be happening is a number of people left the job market in 2020 and for the remaining workers, there are now more jobs to choose from. Since employers need to put bums in those seats, their recruiters are working double time trying to poach qualified laborers by offering them better pay. Perhaps this drives more of the pay increases across the board than employees proactively asking for raises out of need. -
What about VXX as an alternative to the European exercise for this play? Does it track the VIX spikes closely?
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On 5/26/2022 at 11:08 AM, SharperDingaan said:
Sorry but we cant speak to this.
We've done very well by both names, but over the summer we will be taking $ off the table to fund our London RE. Purely a risk management thing, and not a judgement on the prospects of either company.
SD
Thank you SD. And best of luck on the London venture.
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@SharperDingaanThank you for your insights into this sector. Been following your O&G trades for PD, WCP and OBE - very pleased with how this balanced the rest of the portfolio in 2022. Used to hold just XOM but rotated into these instead last year and doubled down.
In your opinion, if one were to hold either PD or ESI into end of this year, which do you think would do better?
ChatGPT
in General Discussion
Posted
ChatGpt has certainly made more than a splash this year but which white-collar jobs do you all think will be impacted the most not just by ChatGpt, but all of AI as a whole in the near-term?
I keep hearing from friends and acquaintances who are already relying on chatgpt to supplement their white collar work in marketing and sales especially when it comes to writing content and client-facing emails.
Could your or your subordinates’ line of work require re-skilling in the near-term to leverage AI technology to, for example, enhance productivity? Perhaps the same way that certain software tools are a requirement in certain roles whereas previously people were able to leverage more analog methods such as pen and paper?