Valuebo

http://www.artberman.com/wp-content/uploads/LGS_Returning-To-Market-Balance-How-High-Must-Prices-Be-To-Save-The-Oil-Industry_18-May-2016.pdf Interesting presentation from a week ago.

Not to mention his bullishness on Biglari, Fairfax, .. Where is their performance now? People DID warn that performance for those was unlikely to continue. If you then state that your goal is to achieve 15% / year for the next 30-40 years (meaning Gio would become a billionaire) and that you focus on quality of management and go on and on about it all the time... Well then you shouldn't be surprised if people call you out on it imo. I also got screwed over once, believing management too much. Well, I've learned from it. I hope Gio does too.

I believe he is actually right on deflation over the long time. Doesn't mean his timing or strategy is right however.

Lol at "being hedged". There is a time to admit your mistake and I think it has come (a while ago). Remember by the end of 2009 when BV was $370? It's 10% more now plus six dividends. Well at least it's not negative. But to get to that expected 15% return (he actually said it again in the last letter), he'd need almost 40% annually in the next 4 years to be on track over a 10 year rolling period. They didn't even get that between '06-'10 when they hit the jackpot! I wish him the best of luck. I'm just not sure he's going to get there again without "any" investment risk.

What's it going to take for people to realize that they were dead wrong? The game changed, move on. :) "If if if..." isn't an investment case, the price is what it is.

Natural Gas Prices Continue Slump, on Track for Lowest Settlement Since 1999 http://www.wsj.com/articles/natural-gas-prices-continue-slump-1450193642 Holy sh*t! Bulls buying?

Everyone is pumping the max they can. Years of 100$ oil financed this. Projects still came online in 2015. Now at 40$ it is getting harder just to maintain production in 50+% of prod and what they called a glut has already narrowed down from 2.5mboe/day to 1-mboe/day in the last year. Stocks is the thing that allows for all these shorts to feel confident for now. Shale I think puts a soft cap on prices close to 60+$/boe. But production still > than demand and no one will be willing to slow production before they are economically forced. So doesn't that simply mean that all those NA shale producers will simply go bankrupt or taken over by majors as they are the weakest players by far? No one knows where the price goes from here but there sure seems to be little incentive for oil to go up given that all players are still hanging on. Many claim we won't see sub $30-$35 simply because ... ? Idk honestly. It seems unlikely but given everything, why not? $40 seemed just as unlikely a year ago. So can someone tell me why all those North American producers aren't fucked? Oh, ok... :-\ ;)

Market isn't that elastic really. It takes a while for these prices to bring change. http://www.bloomberg.com/news/articles/2015-12-07/opec-unshackled-from-quota-could-add-millions-of-barrels-in-2016 So again I'd say many NA companies and their shareholders are fucked. This likely isn't going to resolved in a few quarters.

Everyone is pumping the max they can. Years of 100$ oil financed this. Projects still came online in 2015. Now at 40$ it is getting harder just to maintain production in 50+% of prod and what they called a glut has already narrowed down from 2.5mboe/day to 1-mboe/day in the last year. Stocks is the thing that allows for all these shorts to feel confident for now. Shale I think puts a soft cap on prices close to 60+$/boe. But production still > than demand and no one will be willing to slow production before they are economically forced. So doesn't that simply mean that all those NA shale producers will simply go bankrupt or taken over by majors as they are the weakest players by far? No one knows where the price goes from here but there sure seems to be little incentive for oil to go up given that all players are still hanging on. Many claim we won't see sub $30-$35 simply because ... ? Idk honestly. It seems unlikely but given everything, why not? $40 seemed just as unlikely a year ago. So can someone tell me why all those North American producers aren't fucked?

Isn't the question more "Is there any region that would actually benefit from lowering it's own production?" versus "What is a correct price level for oil?" ? Short and medium term, 101 economics don't seem to matter much. All parties need oil income and don't want to cave in because if you do, you are just going to be replaced by someone else. For some isn't the question also "Why not increase production even further"? No need to delay the inevitable? Idk, I'm quite clueless on these things but then again so is almost everyone else. :)

Holy shit, guess this is just going to zero huh?

Added to FDN short. Bought nothing else.

That would be nice. I sold Fairfax a few days after buying in August because I figured it made more sense to directly short myself and wait for a potential fatter pitch in Fairfax. These days might be coming soon... Spain deflation was -1.2% in August against -0.8% expected.

Good to see I'm not the only one with some shorts. I did sell 60% of SPY short and shorted a good chunck of FDN instead. Should have added IBB short as well I guess! ;)

One of my favorite actors playing one of my favorite investors, this better be good! :)

I should also add that I started from a low basis given that 2014 was lousy and down for me so that skews the result of course. I would expand on why I clone and why it happened to be packer that I cloned so often but I'm travelling and don't have time to write all of this down on a smartphone.

Who are you cloning to be up 80% this year? Almost exclusively packer on the board and some well-known managers but they weren't the reason I was up so much. Most of packer's ideas land in the too hard pile like any other ideas from here and elsewhere, think commodity related etc (although oil & gas is getting so tempting to bet on a rebound, especially when you are up a lot in a short period). But some like ntls and intralot I really liked and betted a lot on. For intralot I also saw chou holding, it's cheap and very hated. In january I was holding inyralot with a big loss because of the greek stock market decline and in that period I doubled down making it a huge position. Ntls just like intralot I traded a little and that added a lot of return. I did miss out on an even bigger gain when selling part of it right before the news broke. Given the rumor that the FT reported I was surprised the stock got so low and not more people invested heavily. Maybe that's just me. I think in hindsight I could have bought more without sweating it and probably should have.. With intralot the dynamic was the same: sell-off had little to do with fundamentals and you have to grap those opportunities. See bac a few years back etc. All also had great investors (ntls also had pe on board) buying at much higher prices and they temporarily got hit by something else than fundamentals. So a lot came down to feeling comfortable with the right ideas to clone and invest heavily and lucky timing. I think a lot of it depends on being able to take a beating too. In january I didn't feel too happy with 40%+ in intralot! I probably oversized that one but when your net worth is low you can't really compare with those that invest millions...

Up 80%+, 100%+ with deposits. Lucky cloning, concentration and small capital base.

AdBlock works great for me.

You didnt read what I wrote then. I said there are ways to short without risk of margin calls. Buy puts. Short + Buy call. Buy Put Spread. Short Call Spread. All of these have specific amounts of capital at risk. Hey Watsa, Sorry, my post wasn't really directed to you specifically. In the "what are you shorting today?" topic I spoke about the possibility to short SPXU at some point. Then I read your post diagonally and thaught about it some more. I missed the last part about option strategies to hedge extreme events. I understand you felt addressed, my bad! All in all, I'd say it's too much of a hassle. I'd rather just buy cheap that dropped a lot (think small cap commodity etc) at points of extreme fear.

You are probably right writser. Online trading wasn't available before either. I don't even see ST tax changes affect trading much over the longer term. In any case, even if it does reverse a little, it should be more than offset by IBKR's impressive growth.

Anyone wonder about this potential risk? What if this trend reverses?

Here is where shorting VIX/VXO or any related leveraged product could go wrong: I don't want to be margin called because I shorted a 3X leveraged VIX short at 40 that went to 150... You need a lot of capital ready at the exact time you need to be buying stocks. No thanks.

4 years since I read this article but I remember it was interesting so I'll post it here: http://news.goldseek.com/Zealllc/1314374831.php I remember that watching VXO is better than VIX. (Edit: So read it again. VXO basically only calculates S&P100 option pricing and only ATM options thus making the level of fear more apparent. More in the article...) We saw a spike on the 24th but it was very brief and it didn't offer lots of bargains so I mostly withheld from buying. I think it's a great tool to help you determine (in part) when to buy and to give you the confidence to actually do it.

Would be cool if it worked, I'll have a look later. Would love to be able to only see relevant topics under "recent posts".