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My prediction for the next four years


muscleman
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Just for fun. Let's have it here and come back four years later.

1. Oil and other commodity prices way up

2. Housing price the least affordable ever.

3. Highest gun sales in US history.

 

I saw your original post. Why try so hard?

 

Really? Sorry about that. I wasn't sure if I got that one posted because I couldn't find it anymore. :o

I just searched and could not find it. Was it deleted by someone?

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Just for fun. Let's have it here and come back four years later.

1. Oil and other commodity prices way up

2. Housing price the least affordable ever.

3. Highest gun sales in US history.

 

I saw your original post. Why try so hard?

 

Really? Sorry about that. I wasn't sure if I got that one posted because I couldn't find it anymore. :o

I just searched and could not find it. Was it deleted by someone?

 

I thought it was moved to the Politics section but I didn't bother checking. Maybe it was deleted, I don't know.

 

My point is why try so hard to do basically a 100% political post here. The only thread linking your 3 points in your timeframe is politics. Am I wrong?

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Just for fun. Let's have it here and come back four years later.

1. Oil and other commodity prices way up

2. Housing price the least affordable ever.

3. Highest gun sales in US history.

 

I saw your original post. Why try so hard?

 

Really? Sorry about that. I wasn't sure if I got that one posted because I couldn't find it anymore. :o

I just searched and could not find it. Was it deleted by someone?

 

I thought it was moved to the Politics section but I didn't bother checking. Maybe it was deleted, I don't know.

 

My point is why try so hard to do basically a 100% political post here. The only thread linking your 3 points in your timeframe is politics. Am I wrong?

 

I don't see the original thread in the politics section either. Odd....

The government policies are very important in regards to what are the potentially hot areas to bet on. For example, when a lot of federal and state lands are banned from oil, that changes the supply demand quite a bit. Also the keystone pipeline ban can make railroad hot again.

 

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...

Does anyone have info on how these contracts are written? I’m not super familiar with rail transport, but I would imagine it’s not much different than container shipping where you have a range or “quote” of price and the contract acts more as a “we get the business” type of deal.

This is on the edge of my limited knowledge and i guess you wonder if railways obtain good margins on those contracts. Because of commercial 'sensitivity', contract clauses are not widely reported. It seems that railways need to invest (buying and leasing) significant funds to meet this specific demand and ask, in return, for a multi-year commitment and a baseline daily (bpd equivalent) take-or-pay scenario. i think the Alberta government was recently on the hook for such contracts negotiated at at time when prices (and demand) were higher.

So, BNSF could be eager to contract for such crude-by-rail agreements and the deals would likely be quite profitable short term but this does not appear to be a long term advantage. There was an article about CN some time ago dealing with this topic, sort of:

https://www.nationalobserver.com/2019/05/01/news/crude-rail-temporary-solution-pipeline-shortage-cn-rail-ceo

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  • 2 weeks later...

The oil prediction came quicker than i expected. But I also think the spread between Canadian and US oil will remain at a wide margin now that he banned keystone pipeline so his big donate Buffet can profit from the $30 per barrel railroad shipping charge from the Canadians.

Makes total sense for a green energy leader.  ::)

 

https://www.wsj.com/articles/tightening-oil-supplies-inject-new-momentum-into-pric[…]d=IwAR0G47iWMoBxqI8xMun_7WUWgCe3H6R8OfmvtfOt4L1-CZFTMGUm3IWp2n0

 

We will see when the other two comes in.

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The oil prediction came quicker than i expected. But I also think the spread between Canadian and US oil will remain at a wide margin now that he banned keystone pipeline so his big donate Buffet can profit from the $30 per barrel railroad shipping charge from the Canadians.

Makes total sense for a green energy leader.  ::)

 

https://www.wsj.com/articles/tightening-oil-supplies-inject-new-momentum-into-pric[…]d=IwAR0G47iWMoBxqI8xMun_7WUWgCe3H6R8OfmvtfOt4L1-CZFTMGUm3IWp2n0

 

We will see when the other two comes in.

 

Fact check: Buffett did not donate to Biden; oil that would have been transported through the Keystone XL Pipeline will use existing infrastructure, not Buffett-owned railroad

 

https://www.reuters.com/article/uk-factcheck-buffett-keystone-pipeline-idUSKBN2A22LR

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...

Does anyone have info on how these contracts are written? I’m not super familiar with rail transport, but I would imagine it’s not much different than container shipping where you have a range or “quote” of price and the contract acts more as a “we get the business” type of deal.

This is on the edge of my limited knowledge and i guess you wonder if railways obtain good margins on those contracts. Because of commercial 'sensitivity', contract clauses are not widely reported. It seems that railways need to invest (buying and leasing) significant funds to meet this specific demand and ask, in return, for a multi-year commitment and a baseline daily (bpd equivalent) take-or-pay scenario. i think the Alberta government was recently on the hook for such contracts negotiated at at time when prices (and demand) were higher.

So, BNSF could be eager to contract for such crude-by-rail agreements and the deals would likely be quite profitable short term but this does not appear to be a long term advantage. There was an article about CN some time ago dealing with this topic, sort of:

https://www.nationalobserver.com/2019/05/01/news/crude-rail-temporary-solution-pipeline-shortage-cn-rail-ceo

 

Missed this response earlier, thanks for sharing

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The oil prediction came quicker than i expected. But I also think the spread between Canadian and US oil will remain at a wide margin now...

https://www.wsj.com/articles/tightening-oil-supplies-inject-new-momentum-into-pric[…]d=IwAR0G47iWMoBxqI8xMun_7WUWgCe3H6R8OfmvtfOt4L1-CZFTMGUm3IWp2n0

We will see when the other two comes in.

Fact check: Buffett did not donate to Biden; oil that would have been transported through the Keystone XL Pipeline will use existing infrastructure, not Buffett-owned railroad

https://www.reuters.com/article/uk-factcheck-buffett-keystone-pipeline-idUSKBN2A22LR

The Reuters link is very helpful. Thank you.

The short term effects (railroads) are likely to be felt mostly north of the border and there may be mid-term implications with enough impetus given for 'partnerships' to go ahead with some real investments, such as the DRU project.

https://www.spglobal.com/platts/en/market-insights/latest-news/oil/012921-canadian-rails-see-crude-increasing-on-keystone-xl-cancellation-dapl-uncertainty

https://s25.q4cdn.com/892584814/files/doc_presentations/USDP_Investor_Presentation_DRU_FINAL.pdf

Going back to a specific name, in the last 15 years, CNR's share (CNR being one of the major railway operators in Canada, with CP) has compounded at about (number unaudited) 15%, of which 5.5% came from EPS growth, 8% from multiple expansion and 1.5% from dividends (some of the 5.5% growth came from buybacks). CNR has benefited, in a cyclical way, from volatile oil prices (and other volatile fossil aspects) but it's not really a long term driver of the business.

-----

What is meant by 'affordable' housing? The question is because the affordability indices used in North America (ie NAR) are truly fascinating. For example, housing 'affordability' in the US reached almost record levels last March.

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  • 3 weeks later...

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