opihiman2

WMB is looking interesting, but I still think it's overpriced given the market dynamics. Even in post GFC and 2016 when oil briefly tanked to 30's, WMB was a bit lower then than it is now. But, you're right. WMB is looking more and more interesting. But, I still think it goes lower. Not buying until it hits single digits. My bet is the dividend gets cut or suspended.

That's a very interesting take, and the ruble trade is something I haven't considered. In fact, I just watched a CNBC video this morning talking about the Russia / SA price war, and they mentioned that the ruble has been tanking. I compared it to other petro related currencies like CAD, and it's down about 20 to 25%. Looking longer term from the oil bust after GFC till $60+ oil, it looks like Ruble is down against both CAD and USD. I'll probably just go long oil via the majors. I'm thinking refinery operations will recover the fastest. VLO and CVX look good. I like BP and Shell based on their cash balance sheets. This Daniel Yergin book sounds interesting. Care to provide a TL;DR?

More liquidations of levered funds: https://www.prnewswire.com/news-releases/direxion-changes-objectives-of-ten-leveraged-funds-to-address-extreme-market-conditions-while-also-closing-eight-funds-due-to-limited-interest-since-launch-301027710.html

The more I think about it, I think this is all just wishful thinking: US, SA, and Russia forming an alliance and a truce, cut back on production, and bam, we're back to $50 oil. Knowing Russia, they have no qualms with destroying US shale. I mean, think about it. Why would Russia HELP US shale recover? They recover, the mexican beer virus is gone, demand is back up, and Russia is back in the same bullshit as it was a few years ago. No, this time, they're going to take the pain to crush U.S. oil. Putin has said many times he think US shale tech is barbaric. The timing is absolutely perfect. Probably 1 in a 100 year event just unfolded, and there's not going to be another oppty for Russia to finally take a deep stab into the heart of US oil. This is likely going to be a long drawn out battle. Still, below $20 on brent, I'm starting to buy the oil majors and some mid streams.

To all other folks, I actually am quite new to understanding the bond market. I, like you folks, was heavily into equities before. How stupid was I? Anyways, I have not done the roll over trade. It was actually something I read about a long time ago from Gary Shilling, and I never paid much attention to it because of "equity people can't do bond math". But, when I broke down the trade a while ago, I was shocked. It was so stupid not to see in hindsight, but also, I agree with some of you that no one would know back then that interest rates would be where they are today. And hell, even NOW, people are saying no way the U.S. goes negative on rates. But if we're in a deflationary cycle, negative rates might still equal positive yields -- I for one think we're going to see a comeback in inflation, but who knows. Anyways, I really don't know where Treasuries go from here. But we're at the ZLB pretty much, and If I were being honest, I would say the trade is probably done. However! That still doesn't change my views on my tactics. I'm timing markets, and I'm using Treasuries as the hedge. Actually, more of a hedge, more like all my asset allocations is in it. Worst case scenario, I just come out unscathed. Likely scenario, my hedge is up 10 to 30+%

So does that mean you're loading up on treasuries? I still don't see where you're getting your numbers from. Perhaps I missed it but I didn't see where Faber mentioned 40 years? Jan 1990-Feb 2020 (March numbers aren't out yet) US Stocks: 9.47% LT Treasuries: 7.88% Jan 1995-Feb 2020 US Stocks: 9.67% LT Treasuries 7.91% Jan of 1999: US Stocks: 6.58% LT Treasuries: 6.90% Let's look at the 80s: Jan 1980-Feb 2020: US Stocks: 11.09% LT Treasuries: 9.30% Jan 1985: US Stocks: 10.68% LT Treasuries: 9.19% StahleyP, just read up on bond convexity. Maybe it'll make more sense later. Also, for me, it's not about buying and holding Treasuries. It's about TRADING Treasuries. And no, I've already loaded up on Treasuries. I actually posted on this forum in late 2018 saying I think we're heading into the final innings of this thing, and I went completely to cash equivalents AKA Treasuries and money markets. Since then TLT is up like 30+%. I actually just unloaded all of my Treasury holdings when prices were around the 160's. So, I'm up almost 40% on the trade. The next time I do this, I'm using a leveraged Treasury ETF to really milk the gains. And, I'm a bit of a hypocrite. I don't detest equities. I'm looking to go back long on equities. But, I've seen this for myself, and have read about it from others, it seems after every decade or so after some recession or blow up, there is a rotation in leaders. The past decade we saw the FANGs completely outperform. Next decade, I highly doubt that will happen. Previous decade it was the BRICs and commodities. The decade before that, US equities in general, especially the dot coms. Next decade, we'll see. I personally think inflation is going to make a come back.

I hate to say it, but reading through some of the comments through this thread, I realize why the bond folks look down on the equity folks. Bond people can do equity math, but for some reason equity people can't do bond math. It actually almost doesn't matter what date you pick for bonds since the 90's -- well, maybe not in the past year, but even then, read my final comment. I just picked anytime in the 90's, because anytime I say since the 80's, people invariably look at the double digit yields and say, "OF COURSE IT OUTPERFORMED!" I mean, yeah, in hindsight, we could have bought 30 YR treasuries and held on for 12% coupons and not even have done things like roll over duration YOY. It would have seemed like a no brainer trade in hindsight. But even then, including inflation, it was close to negative real yields. So, not exactly no brainer! But, my point is, you could have even bought 3 to 4% yielding treasuries, and rolled over duration YOY for the past 10 years all the way till when the 30 yr dipped under 1%, and you would have STOMPED the S&P on an annualized and compounded basis. It's even worse when you look at the Sharpe Ratios. Hell, even before the 30 YR treasury rallied to the point where yields dipped under 1%, I was looking at the 30 YR a month and a half ago thinking, "SHIT, 30 YR is now 1.5%! Oh well, can't buy 30 YR zero coupon treasuries, the bonds have rallied already." WoW! Little did I know the shit was going to hit the fan since then. I had no idea 30 YR's were going to dip to nearly 0.5%. When the 30 YR hit 1% in fact, ZERO coupon 30 YR Treasuries were up nearly 30%.

No, I think US equities will under perform compared to long term performance. Not under perform US Treasuries. But, who knows at this point. I never thought the 10 yr would get to almost 0% like it did just recently. Now, I can see it go more negative. If you understand bond convexity, bonds can way out perform stocks. It's something I never understood or paid attention too because of value investor neophytes like Warren Buffett claiming, "why would anyone hold a 2% yielding Treasury?" Well, no bond trader holds a bond for the yield. Bond traders hold bonds to anticipate interest rate movements. And, that's what I do nowadays. If I think there's going to be an incoming recession, I switch everything to Treasuries. And it's been paying off in spades. BTW, do you know what was one of the best performing assets in 2017 and 2018? It was the Austrian 100 YR bond yielding something like <1% before prices dived. Annualized, it was up 50% yoy for 2 years when the equities markets basically went no where.

US Treasuries have outperformed domestic US Stocks over the past 40 years: On a risk adjusted basis, it's no comparison. So much for equities always >> bonds. Moreso, if you bought 30 yr Treasuries in the 90's, in fact, not even the 80's, but any point in the 90's, and rolled duration over yoy till now, you would have STOMPED the S&P on a compounded basis. It wouldn't even be close. It's something like 20+% CAGR. Finally, more nice nuggets from Meb: I think the next decade brings a significant amount of U.S. equity under performance.

This is a tough call. If they agree to cuts and Russia is on board, I think oil pumps up a bit. But the demand side of the equation. It's anyone's guess at this point. I'm still thinking WTI tanks below $20, and Brent goes to about $20. At that point, I'm starting to buy the majors and some midstreams. 10% of the portfolio goes into this.

Yeah, I just saw this with mREITs today. Two UBS leveraged ETF's in mREITS were just liquidated! Most of these stocks were down 40 to 50%! HOLY SHIT! My gawd, man. I'm freaking the fuck out right now. I'm actually encouraged by this. It provides a plausible (though not necessarily complete or correct) explanation that had previously been lacking, at least on this thread. Also, midstream companies and mREITs are often levered up to their eyeballs. Is it wise to then lever your investment in them? I assume part of the answer is that these are retail yield vehicles whose buyers don't understand what they're getting into. You should read this paper: https://necsi.edu/the-stock-market-has-grown-unstable-since-february-2018 It basically says that the markets were primed for huge price swings. It didn't predict that swings would happen. It just said that if there is a crisis (like coronavirus and oil war), the markets will swing wildly like we see now. It doesn't provide an explanation, though. Although, maybe having more leveraged ETF's than before is likely causing this issue. Vehicles like 3x bull / bear ETF's weren't really around pre 2008.

Yeah, I just saw this with mREITs today. Two UBS leveraged ETF's in mREITS were just liquidated! Most of these stocks were down 40 to 50%! HOLY SHIT! My gawd, man. I'm freaking the fuck out right now.

https://www.bloomberg.com/news/articles/2020-03-18/u-s-jobless-claims-poised-for-historic-surge-amid-virus-layoffs?srnd=premium

Holy SHIT! I was expecting $20 by this summer. WOW! $20 WTI today!! Some MLP pipelines are being priced like they're going out of business: PAA is down 30+% today. This is pure insanity. Once in a hundred year black swan event: global / US recession was looming late 2018, mass pandemic, and on top of that, an oil price war between three countries with one over-levered one. Calling it now, this is a Great Depression 2 making event. Indices are likely to go past 50% down to even 70+%

Keeps going down. Below $25 / bbl. We'll be seeing $20. When does this turn around? I don't think we're going to see oil turn around until coronavirus is over or Russia / SA burn Texas to the ground. And if neither are over, oil is going to go below $20 / bbl. Man, never ever thought I would see this in my lifetime: oil back to the Gulf War prices. Holy shit.

“I’d rate it a 10,” Trump said at a White House press briefing Monday when asked by a reporter how he would rate his response to the pandemic. https://thehill.com/homenews/administration/487883-trump-gives-himself-10-out-of-10-on-coronavirus-response Surprised he didn’t say “11”. LoL!

HOLY SHIT WTI AT $28!

Nice, congrats to all the shorts!

Everyone saw this coming? Like who on this MB bought puts or shorted the market on Friday??? You guys have all been buying the dip when you should have been selling into any strength.

Interesting. I found this article dated Oct 19, 2019: Jim Murren won’t flat-out predict an economic downturn is about to hit the U.S., but the chairman and CEO of MGM Resorts International said the signs are there and he isn’t taking any chances. That is one of many reasons the company agreed last Tuesday to sell Circus Circus Las Vegas to rival casino operator Phil Ruffin for $825 million and struck a sale-leaseback deal for Bellagio with Blackstone Real Estate Income Trust for $4.25 billion. The net proceeds from the transactions – roughly $4.3 billion after taxes – goes directly to MGM’s balance sheet, allowing the casino giant to reduce a portion of its $15 billion in long-term debt and allow the company to focus on “high growth potential” opportunities. “These transactions make us far less vulnerable in any global economic cycle,” Murren told The Nevada Independent a day after the deals were announced. “We’re late in that economic cycle and we need to be prepared for the unforeseen.” Looks like they were seeing an economic slowdown late last year. Seems like we've got three major shocks happening: late cycle economic slowdown (possible recession), pandemic, and oil price war. All three hitting at the same time to make for a horrendous recession. Hearing from people in LV that a lot of people are getting laid off. Especially now that LV is shutting down all hotels / casinos.

Blood bath tomorrow. Circuit breakers will trip right at the open. All major banks are now suspending stock buy backs making people question whether they have liquidity issues tied to the repo market. Hashtag #GFC2 is now trending. Reserve ratios have been nearly eliminated at all banks, and there are people reporting that there are mini run on the banks by the public -- sounds insane, but now I'm even paranoid if the FDIC will be able to cover my accounts at the bank. Personally, I know some pretty well off entrepreneurs whose business demand have completely just died off even before the coronavirus. They are now wondering if they are going to make ends meet by next year. Let's put this all into perspective. Yield curve inverted meaningfully yoy for a full 2 quarters. Monetary supply moving averages have also contracted. World trade was contracting last year, and corporate profits have flattened and were heading for contraction even before this virus hit. Repo markets were going hay wire in 2018, and no one including the Fed knew why. This should have been the first clue that there was a lot of financial stress in the system. We all know the story about corporate debt issuance for stock buy backs, and also how poor the credit quality of a lot of mis-rated corporate BBB's were even on just leverage ratios alone. What does this all mean? We were heading for a recession even without the virus. The Fed thought they could get in front of this, but then we had two black swan type events, and now they are truly fucked. What I think we're heading for is what should have happened in 2008 without Fed intervention. Indices are likely to close down past 50%. I'm glad I went to cash equivalents in 2018.

Just like always, you guys are behind the curve. The big issue isn't so much the coronavirus, but what's been happening in the repo markets since 2018. Basically, we're going to see widespread financial contagion like what happened during the GFC, because stupid ass companies took on too much leverage with cheap credit, and now the pied piper is coming. If this is worse than the GFC, don't be surprised. The Fed just prolonged that bullshit out 10+ years, and now the real shit is hitting the fan. Even the risk parity trade is no longer working.

AMD. Strike prices at $30. Initiated short yesterday.

This thread is the perfect example of why I stopped perusing this board a long time ago. Just idiotic assumptions being made by Internet randos and drawing wild conclusions from them: SHLD, SD, CHK, etc... and now the coronavirus. It seems that most of you guys have all of a sudden turned into infectious disease experts and epidemiologists.

sorry to hear that. Do you know their ages? Both in the 50s. Damn, that's fucked. I watched a video on Youtube the other day where they interviewed this young English bloke in Wuhan that had coronavirus. If you end up with the severe symptoms, it sounds effing horrible. He said it started out like a regular cold, then you start to feel better, and then for him it turned into like the worst case of the flu. The shortness of breath symptom, apparently, is from pneumonia, which he ended up getting. No wonder a lot of old people and people with health issues are dying from coronavirus. It's the pneumonia that's likely killing them. Pheumonia is no joke. You need to go to the hospital for that. Also, people need to watch this: I think what he said struck a chord with me. This is going to be a marathon and not a sprint. People are making idiotic assumptions like they usually do on this dumb forum that this will be like the flu. We have vaccines for the flu, which likely makes the course shorter. But, we have no vaccine for this. Hell, we don't even have a vaccine for the common cold.