Did you miss this? Facts & Trends: “Buy Low” Time For Oil
(… ) We’ve read a lot of silly articles since oil prices started falling about how U.S. shale plays can break-even at whatever the latest, lowest price of oil happens to be. Doesn’t anyone realize that the investment banks that do the research behind these articles have a vested interest in making people believe that the companies they’ve put billions of dollars into won’t go broke because prices have fallen? This is total propaganda.
We’ve done real work to determine the EUR (estimated ultimate recovery) of all the wells in the core of the Bakken Shale play, for example. It’s about 450,000 barrels of oil equivalent per well counting gas. When we take the costs and realized oil and gas prices that the companies involved provide to the Securities and Exchange Commission in their 10-Qs, we get a break-even WTI price of $80-85/barrel. Bakken economics are at least as good or better than the Eagle Ford and Permian so this is a fairly representative price range for break-even oil prices. (…)
Here’s a great article about a potentially disruptive company coming near you pretty soon:
Jet.com is the brainchild of Marc Lore, the founder and former chief executive officer of Quidsi, a company best known for its most popular website, Diapers.com. He spent years competing with Amazon.com(AMZN) before getting clobbered in a price war and then, in 2010, selling out to the company for $550 million. Lore stayed on at Amazon for more than two years; now he’s preparing to assault it.
Nearly 40 years ago, a young sell-side analyst by the name of Maggie Gilliam began analysing retail stocks spending most of her time walking store floors, talking to sales clerks, watching shoppers and scanning store inventory. Her research reports read more like fashion analysis, marketing trends, store design creativity, etc.
For Maggie, knowledge is gained in the marketplace, not behind a desk doing sales, margins and earnings extrapolations. This diligence led her to be the first analyst to recognize certain new growth concepts early on and alert investors to companies like The Home Depot, Wal-Mart, Price Clubs (now Costco). I truly enjoyed her analysis and benefitted from her insights.
Leah Grace, sharing her views at Quiddity, has a similar hands-on, out-in-the-field, how-good-is-it-really kind of an approach to fashion and technology. That she is my daughter-in-law takes nothing away from her fashion and shopping savviness. Her analysis of fashion, retail and consumer technology are unique, honest, straightforward and refreshing. She also writes beautifully like in this post about Elon Musk and her recent ride in a Tesla.
Two of Leah’s recent posts:
The Calm Before the Storm Why Volatility Signals Stability, and Vice Versa (Nassim Nicholas Taleb and Gregory F. Treverton )
(…) Although one cannot predict what events will befall a country, one can predict how events will affect a country. Some political systems can sustain an extraordinary amount of stress, while others fall apart at the onset of the slightest trouble. The good news is that it’s possible to tell which are which by relying on the theory of fragility.
Simply put, fragility is aversion to disorder. Things that are fragile do not like variability, volatility, stress, chaos, and random events, which cause them to either gain little or suffer. A teacup, for example, will not benefit from any form of shock. It wants peace and predictability, something that is not possible in the long run, which is why time is an enemy to the fragile. What’s more, things that are fragile respond to shock in a nonlinear fashion. With humans, for example, the harm from a ten-foot fall in no way equals ten times as much harm as from a one-foot fall. In political and economic terms, a $30 drop in the price of a barrel of oil is much more than twice as harmful to Saudi Arabia as a $15 drop.
For countries, fragility has five principal sources: a centralized governing system, an undiversified economy, excessive debt and leverage, a lack of political variability, and no history of surviving past shocks. Applying these criteria, the world map looks a lot different. Disorderly regimes come out as safer bets than commonly thought—and seemingly placid states turn out to be ticking time bombs. (…)
True Luck “Coupled”
Further to my Jan. 2nd post, some stats on life expectancy and the power of the couple.