Mephistopheles

Nonsense and sexist. She said in April that she’d do 50%/year going forward. These are just temporary declines.

Congrats on Pantheon! I just bought a small position based on Twitter research. I feel one needs to be a geologist to understand the true risk reward lol. What are your thoughts?

In the 2nd scenario, is that really a bear case for oil? The supply chains will be re-routed (similar to what's happening already), but this is unrelated to the demand side. Even if settled in Yuan, presumably the ROW prices oil in dollars still.

Big news: https://babylonbee.com/news/new-greta-thunberg-thermostat-scowls-at-you-when-turning-the-heat-up

I met a young self proclaimed “communist” at a bar in NYC last night. He was probably about 25yo. At various parts of the night we spoke about John D Rockefeller and also the Soviet Union. He though the former was evil and that the latter was great. It was mind numbing listening to this kid who has figured out the world at such a young age. There was no convincing this guy of reality. But we wouldn’t be where we are if people weren’t so stupid. So am thankful for ESG and all the lunatics associated with it.

Thanks for this. It makes sense

Thanks for posting this! Can someone explain to me what this means exactly: (If the business requires additional working capital to maintain its competitive position and unit volume, the incremental spending should also be included in section (c). However, businesses following the LIFO inventory method usually do not require additional working capital if unit volume does not change. LIFO would give the appearance of an additional need for working capital because inventory is held at a cost less than average, and, or FIFO. Buffet is saying not to confuse that with a working capital need.)

Has anyone looked at Petrochina (PTRCY)? China is now hated and supposedly uninvestable. I saw that the Hang Seng closed at its lowest since 2009. Plus a bunch of Chinese companies voluntarily delisted from the NYSE recently. I recall that Buffett's reason for buying PTR back in like 2006 was that it was trading at a huge discount to Western majors given their reserves. Today PTR has approximately same proved reserves as XOM and a bit greater production, but the EV is $75bn vs. XOM EV of $480bn. I am taking into account the H shares that trade at a discount to the mainland Chinese A shares. They committed to pay at least 30% of profits as dividends, current yield is >10%. One negative is that their capex budget is way higher than XOM as they are still exploring vs. returning all cash to shareholders like the Western cos. Still on a P/FCF basis they sell for 1/2 of XOM. I haven't bought yet but might be worth it given the awful sentiment and strengthening USD. However I also had bought some LUKOY prior to Russia sanctions so tread carefully. lol

I think I answered my own question: prediction: We will go back into an Iran deal that’s more advantageous for Iran than the last one.

I found your post very informative. Regarding our "ally" Saudi Arabia - again they seem rather neutral when it comes to choosing between U.S. and Russia. Their goal is to do business, period. So to relate this to energy, the West can do business with the Saudis and not with the Iranians. But it's hypocritical to draw a moral distinction between the two as the reasoning. Hell everyone has their faults. I hate Trump but one of the most truthful things he's said imo was when he said to Bill O' Reilly "we've killed people, you think our country is so innocent?" lol. To tie it in with investing as to avoid politics, Charlie Munger said it best : "We should use up everyone else's oil before tapping our own"

Exactly. All that Russian oil is going to India and China at huge discounts. China is refining it and selling the product back to the West at big profits. Same with gas. They are taking LNG shipments from Russia and then rerouting them to the West and profiting off the arbitrage.

It's funny how Israel remains neutral in the Ukraine-Russia war. And the West bends over backwards to show its love for Israel by punishing Iran. It seems like a one sided love affair if you ask me. Re: terrorism - I guess we can forget that 9/11 hijackers were mostly Saudi. And the destabilization of Yemen. And the murder of Jamal Khashoggi. lol I'm not saying make friends in the literal sense. Just saying strategically it's good to not suppress a major oil producer. I'd say its a win to do business with both Saudi and Iran.

yea they are pariahs. The Saudis are pariahs too. Point is that both are very powerful oil rich nations. If we want cheap oil , it would be better to be friends with both, as to at least make it a bit more competitive amongst them. Even Iran and Saudi Arabia both get the power of oil, thus both play on the same team being OPEC even though they are enemies. The Russians, Chinese, Indians are friends with both. We should do the same.

I for the life of me can’t understand why the West, regardless of party, can’t make friends with Iran. The enemy of my enemy is my friend. Both the Saudis and Iranians are big oil producers. Make friends with both, use it to your advantage. I wouldn’t be surprised if Biden goes for a new Iran deal to bring oil prices down.

Thermal has been > met much of this year. The above companies have been redirecting.

Posting this separate from the energy thread as that one is more focused on Oil, and I also like this title. I've owned oil for a bit, but recently picked up some coal stocks. Coal is facing some of the same dynamics as Oil - tight supplies, years of underinvestment, ESG - except the valuations are even more compelling (think 2-3x FCF). Even before the Ukraine war, coal prices were on a upward trek. There were multiple bankruptcies a few years ago and now the balance sheets are very clean. At least for the 3 companies I own - AMR, ARCH, and BTU. Capital allocation is again on par with the oil industry - higher dividends and buybacks, not much new capex or M&A. AMR is the most interesting one in that they are buying back like 10% of their shares outstanding per quarter, and are debt free. ARCH is returning cash mainly via dividends. BTU can't return capital until it pays back its surety bonds and collateralizes its letter of credit facility (nearly there). The big near term risk is the recession as Steel production comes down, but the Met Coal can be redirected for Thermal use. Another risk is quick resolution of the war AND repairing Nord Stream, though this seems unlikely any time soon. Meanwhile these companies are generating massive amounts of cash and returning (or planning on returning) it to shareholders. Coal is still the largest source of world power generation and these stocks are being priced for death.

I thought the same but it was down there for a few min right at the open

lucky! I wonder why it dropped so much so briefly

@GregmalWhat's the better way to hedge, VIX calls or SPY puts?

They’ve got a group of committed lenders so minimal financing risk. I don’t see anything on the regulatory side. There’s a risk of Apollo pulling out. I’ve owned the company for a few years I think it’s a good business to own even if it doesn’t work out. and the upside is like 30% in 6 months

Loaded up on Tenneco over the last few days (merger arb with a huge spread) Wrote a whole bunch of BRK puts which are underwater. Will buy them back and write more aggressively to be cash flow positive

What happened to Greg and Ajit? Did I miss something?

I also noticed that he only mentioned Becky as the questioner for the BRK meeting. No Sorkin or Loomis. And no panel of research analysts either?!

Lukoil and Gazprom, small positions. Cost of production (in rubles) is low and sales (in dollars) is high. With oil prices where they are, I can't imagine the world banning Russian oil. And with their economy collapsing, I also can't imagine Russia blocking exports, it would be suicide for them. Question is will the govt confiscate the dividends/earnings from non-Russian shareholders.

Sold some DISCA for tax loss and bought T on my IBKR margin