Where are we at in this downturn?

[John Hjorth]

1 minute ago, Sinbius said:

If this 104% tariff on China stay...more or less how long before it will be felt hard on business in your opinion?

 

Without clinging to the 104 per cent and China, the whole mess has already started. Naturally, [yes, I would say naturally], it has been reported by European news media today, that Volkswagen has brought car shipments to USA to a total halt. Much more to come.

 

It is not just starting now. It has already begun.

[Sinbius]

Yes I have heard of Stellantis too (fired people...)...but I guess from tomorrow things should go south very fast very hard...just if any of you is more inside some business can comment and have insights...

Edited April 8, 2025 by Sinbius

[gfp]

24 minutes ago, Blake Hampton said:

 

This is awesome. I'm in love with oil and it's falling off a cliff.

This is the most excited I've been in a year.

 

What are you doing?  Are you long oil or oil producing companies?  Buying more?  Do yo have a view on future oil prices?

[Blake Hampton]

7 minutes ago, gfp said:

What are you doing?  Are you long oil or oil producing companies?  Buying more?  Do yo have a view on future oil prices?

 

Buying. I don't have any view on immediate oil prices in the future, but I think $60 a barrel is pretty damn cheap.

 

The market seems to be going crazy right now. Oil prices are crashing and rate cuts are being priced in for policy that will very likely slow growth and be inflationary, otherwise known as stagflation.

The market isn't very forward looking.

 

Edited April 8, 2025 by Blake Hampton

[gfp]

6 minutes ago, Blake Hampton said:

 

Buying. I don't have any view on immediate oil prices in the future, but I think $60 a barrel is pretty damn cheap.

 

The market seems to be going crazy right now. Oil prices are crashing and rate cuts are being priced in for policy that will very likely slow growth and be inflationary, otherwise known as stagflation.

The market isn't very forward looking.

 

 

Is slowing growth or a recession good for oil prices?  Wasn't the only thing holding oil prices where they were a cartel cutting production repeatedly in response to weak demand from the weak global economy?  So now they have been pressured to ditch the production-cuts-to-support-prices policy right when the global economy further weakens in unison?

 

 

Edited April 8, 2025 by gfp

[Blake Hampton]

7 minutes ago, gfp said:

Is slowing growth or a recession good for oil prices?  Wasn't the only thing holding oil prices where they were a cartel cutting production repeatedly in response to weak demand from the weak global economy?  So now they have been pressured to ditch the production-cuts-to-support-prices policy right when the global economy further weakens in unison?

 

I'm not worried.

[Red Lion]

39 minutes ago, Blake Hampton said:

 

Buying. I don't have any view on immediate oil prices in the future, but I think $60 a barrel is pretty damn cheap.

 

The market seems to be going crazy right now. Oil prices are crashing and rate cuts are being priced in for policy that will very likely slow growth and be inflationary, otherwise known as stagflation.

The market isn't very forward looking.

 

 

Are you investing more into small cap type names or majors? I have lost money so many times on oil producers that I've given up trying at this point. I've done a bit better with midstream investments, but even then they've been underwhelming and some significant losses in the mix as well. I'm probably just bad at analyzing these situations. 

[Blake Hampton]

Just now, Red Lion said:

Are you investing more into small cap type names or majors? I have lost money so many times on oil producers that I've given up trying at this point. I've done a bit better with midstream investments, but even then they've been underwhelming and some significant losses in the mix as well. I'm probably just bad at analyzing these situations. 

I’m in both small and large upstream producers. I like the oil itself, the reserves.

[Spooky]

4 hours ago, Blake Hampton said:

A lot of you think that Bitcoin offers some kind of escape. That a lot of these equities trading at extreme valuations can be an escape. That cash is simply trash—and that one day, that same cash will be worth 10% of what it is now, your equities will be worth 10x, and the world will keep functioning as it always has.

 

I would take this bet. In 100 years this is the most likely outcome. It is essentially what happened the last 100 years (i.e. the USD losing most of its current value but equities doing great).

Edited April 8, 2025 by Spooky

[Red Lion]

6 minutes ago, Blake Hampton said:

I’m in both small and large upstream producers. I like the oil itself, the reserves.

 

I feel like margins and large amount of invested capital make this a really hard calculation. Commodities hedging doesn't help handicap these investments. I'd love to get in on some good royalty plays, but it feels like I missed the boat on TPL, and for some reason I've had bad success with small cap royalty companies (although not oil specifically). 

[Hsmpanl]

40 minutes ago, Blake Hampton said:

 

I'm not worried.

gfp is spot on here. Not telling you to worry, but make sure your oil companies have solid balance sheets and an ability to ride out whatever the next few years bring. It takes very little demand destruction without an artificial OPEC supply response to bring oil to the marginal cost of production, which is <<$60. I'd keep some powder dry at a minimum. 

 

Signed,

 

Someone who works for an e&p company and has seen this play out a time or two

[Sweet]

 

if this is true it’s a silly assumption.  China might cut a deal but they might not want to either.  Xi looks like he will be Premiere as long a he wants, Trump isn’t around in 4 years - yes some assumptions of my own.

[Sweet]

20 minutes ago, Blake Hampton said:

I’m in both small and large upstream producers. I like the oil itself, the reserves.

Oil got wrecked in 2014 and people are still waiting for many producers to return to their highs.

 

You need to know that many of these oil companies, especially the smaller ones, are ran for the benefit of the founders and board.  Shareholders are often just the idiots that provide the bid so the board can they raise capital to get themselves rich.  
 

Make sure you check the shares outstanding for everyone of your holders and make sure the boards interest aligns with shareholders.  Some of these companies are pretty much ponzis.

 

Edited April 8, 2025 by Sweet

[Dalal.Holdings]

Unlike the 3 week covid “bear market”, there will be no massive stimulus, there will be no checks in the mail sent to every citizen, and there will be no J POW printing like crazy. The cavalry isn’t coming to the rescue. If you draw parallels with that puny bear market, you will get burned. Act accordingly.

[rogermunibond]

+1 @Dalal.Holdings

 

This is not a GFC 2009-2010 or even a COVID 2020 market.

 

 

[Hektor]

29 minutes ago, Hsmpanl said:

Someone who works for an e&p company and has seen this play out a time or two

Hi @Hsmpanl, What is your take on OXY? Their CEO claims that their break even is about $40. Further, most of OXYs reserves seems to be in the USA, apparently a politically stable country. What, if any, differentiates OXY from the others?

[Gregmal]

Well, hindsite is always 20/20. In real time it’s a different story. 

[gfp]

What a wild day.  Did anybody do any buying or selling?  I was pretty busy

[tede02]

55 minutes ago, Dalal.Holdings said:

Unlike the 3 week covid “bear market”, there will be no massive stimulus, there will be no checks in the mail sent to every citizen, and there will be no J POW printing like crazy. The cavalry isn’t coming to the rescue. If you draw parallels with that puny bear market, you will get burned. Act accordingly.

 

This is a very good point. I was thinking about it this morning. It's a totally different situation than 2020. The Fed is not going to act until something really breaks because they are so worried about inflation and still embarrassed for being so late to raise rates in 2022. And I agree, at least for now, there is no appetite for sending checks. If there is a real trade war where the major parties dig their heels in, perhaps we see a pro-longed bear market ala 00-02 or 08-09. The one thing that comes to mind is there will be political pressure in 2026 to clean any mess that lingers otherwise the republicans are likely to get hammered in the mid-terms. 

[Paarslaars]

1 hour ago, Dalal.Holdings said:

Unlike the 3 week covid “bear market”, there will be no massive stimulus, there will be no checks in the mail sent to every citizen, and there will be no J POW printing like crazy. The cavalry isn’t coming to the rescue. If you draw parallels with that puny bear market, you will get burned. Act accordingly.

 

Then again, do you need that stimulus? Look at what happened yesterday when there was a small hint that the tariffs would be delayed, money came pouring in the market.

The market doesn't need stimulus, it needs this colossal fuck up to end.

[Gregmal]

5 minutes ago, Paarslaars said:

 

Then again, do you need that stimulus? Look at what happened yesterday when there was a small hint that the tariffs would be delayed, money came pouring in the market.

The market doesn't need stimulus, it needs this colossal fuck up to end.

I wish we still had the covid thread. The amount of hind site analysis is staggering. The consensus was overwhelmingly you were an idiot for not being in cash, that anybody buying in March, April, May all the way through October/Nov...was a sucker. How could the markets be only a few % off the pre covid highs, Q2 GDP was going to be Great Depression level. Oh yea, Buffett is bearish! And Ackmans a total idiot....stimulus wasn't going to help. The Fed bringing rates to 0 validated the doom. Everything non tech was fucked....so when you see the covid references, just remember that the post mortem has evolved quite a bit from what was actually occurring at the time. 

[Patmo]

5 minutes ago, Paarslaars said:

 

Then again, do you need that stimulus? Look at what happened yesterday when there was a small hint that the tariffs would be delayed, money came pouring in the market.

The market doesn't need stimulus, it needs this colossal fuck up to end.

The problem is it won't. Right now it's still just stock market moves, wait until the actual real-world repercussions of these decisions are felt.

[Milu]

18 minutes ago, Gregmal said:

I wish we still had the covid thread. The amount of hind site analysis is staggering. The consensus was overwhelmingly you were an idiot for not being in cash, that anybody buying in March, April, May all the way through October/Nov...was a sucker. How could the markets be only a few % off the pre covid highs, Q2 GDP was going to be Great Depression level. Oh yea, Buffett is bearish! And Ackmans a total idiot....stimulus wasn't going to help. The Fed bringing rates to 0 validated the doom. Everything non tech was fucked....so when you see the covid references, just remember that the post mortem has evolved quite a bit from what was actually occurring at the time. 

Yes agree with majority of this. Nobody has any clue how this current saga will turn out, could be a 50% drawdown or could rally from here to all time highs. Once the next year of two plays out everybody will proclaim how obvious it was what would happen. Best bet is to just ensure you will be fine in either scenario. If you don't use leverage and are investing for the long term (5-10 years out) then what happens to good companies over the next 12 months is mostly meaningless, sure on paper you net worth will be lower but if you aren't selling or are a net buyer the opportunity to buy things at lower prices removes a lot of the risk, not increases it. The world will still be here in 10 years and good companies will still be doing business in 10 years, just focus on holding or buying them at reasonable prices.

[Dalal.Holdings]

2 hours ago, Paarslaars said:

 

Then again, do you need that stimulus? Look at what happened yesterday when there was a small hint that the tariffs would be delayed, money came pouring in the market.

The market doesn't need stimulus, it needs this colossal fuck up to end.

The Biden WW2 levels of deficits were the stimulus the markets were addicted to. The market has been running on massive fiscal stim for a while now.

 

Edited April 8, 2025 by Dalal.Holdings

[crs223]

13 hours ago, mattee2264 said:

Trump has made it clear everything is open to negotiation

 

13 hours ago, mattee2264 said:

tariffs are a fundamental part of Trump's policy agenda

 

Are they a temporary trick used for negotiation (your first comment)?  Or are they a fundamental part of the agenda (your second comment)?  Some people pretend to not know the answer.