The Insider Report

Look what Bill Gates is buying!

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The Microsoft tycoon is betting on little-known inflation funds. Should you?               Of course Bill Gates has more money than God and he probably he is buying everything but Microsoft stock. I do find it curious what his investment manager is buying now, Western Asset Clay/ US Treasury Inflation Protected Fund.  The Fund’s investment objective is to provide current income. Capital appreciation, when consistent with current income, is a secondary investment objective. Under normal market conditions, the Fund will invest at least 80% of its total assets in inflation-linked securities and at least 60% … Read more

Why the Collapse in the Price of Oil is Reminiscent of Previous Financial Bubbles

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Bubbles all have the same characteristics of unrealistic expectations but are incredibly difficult to recognize until after the effect. Prices in an economic bubble can fluctuate erratically, and become impossible to predict from supply and demand alone. While some economists deny that bubbles occur,  the cause of bubbles remains disputed by those who are convinced that asset prices often deviate strongly from intrinsic values.-Wikipedia 2008 housing bubble and ensuing financial market rout “We recognized that, despite our suspicions, it was very difficult to definitively identify a bubble until after the fact,” -Alan Greenspan 2000 Dot Com bubble In  2000, AOL purchased Time Warner for US$164 billion. Shortly thereafter the bubble burst and technology stocks suffered a remarkable … Read more

Hi-Crush Partners Is a Solid Buy or is It?

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By CASEY HOERTH  | NOV 26, 2014 | 10:00 AM EST  | 0 The market definitely sees at least some pain ahead for much of the fracking industry, but will $75 oil stop the shale revolution? Major frac sand producer and master limited partnership Hi-Crush Partners (HCLP) is a name that has shed just over a quarter of its value in just the last couple of months. This is an article from the Street.  We are large owners of HCLP but are re-evaluating the wisdom of this.  Even though HCLP has 85% of 2015 production sold to take or pay oil services companies, there … Read more

Oil Freefall Gives Dow Worst Week Since 2011; VIX Jumps – Bloomberg

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Signs of an improving economy did nothing to shield stocks from oil’s freefall as the Dow Jones Industrial Average (INDU) had its worst week since 2011, volatility surged and fund managers said anxiety is building among clients and themselves. More than $1.2 trillion was erased from global equities over the five days, as the drop in crude below $58 a barrel raised concern over the strength of the global economy. The Chicago Board Options Exchange Volatility Index, a measure of trader anxiety that has spent most of the year hovering about 25 percent below its historical average, jumped 78 percent … Read more

‘s annual take on the future of energy

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While oil and gas stocks are collapsing, it is useful to contemplate a horizon beyond the end or your nose.  Who knows when crude prices will recover but according to Exxon we are going to be using a lot more of it, not less for a long time to come. “ExxonMobil (ticker: XOM) released its 2015 Outlook for Energy this week. The report is the company’s long-term global view of energy demand and supply, which ExxonMobil shares to promote understanding of the world’s energy future. The outlook examines energy supply and demand trends in 100 countries by using 15 demand … Read more

Is it time to buy oil and gas stocks? Well,the results of insider buying might surprise you

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The big name E&P companies apparently don’t think their stocks are cheap enough yet to buy. Buying is sparse considering the meltdown in share prices.  The following are the brave souls who are catching a falling knife.  Most are in secondary names, many of which you won’t recognize. BCEI BONANZA CREEK ENERGY INC $2B BOONE LYNN 12/5/2014 Purchase 11,000 $21.01 BCEI BONANZA CREEK ENERGY INC $2B CARTY RICHARD J 12/5/2014 Purchase 30,000 $20.90 CRC CALIFORNIA RESOURCES CORP n/a KORELL HAROLD M 12/5/2014 Purchase 100,000 $6.31 CRC CALIFORNIA RESOURCES CORP n/a ALBRECHT WILLIAM E 12/1/2014 Purchase 20,000 $7.48 CAM CAMERON INTERNATIONAL … Read more

The blatant injustice of US Government oil policy

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If China was dumping a product in the US market, and businesses in the US were not allowed to sell a similar one in the Chinese market, politicians would be up in arms at the injustice of it all.  Well, that’s exactly what’s happening in the oil market now. To provide some perspective, this is not a new issue.  Back in 1999, The U.S. Commerce Department on 9 August dismissed an antidumping and countervailing duty petition filed by a coalition of independent U.S. oil producers against Venezuela, Mexico, Iraq and Kuwait, saying that there was not enough industry support for the petition … Read more

More thoughts on oil

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From JP. Morgan Dec 1,2014 US oil producers unlikely to slash output anytime soon – while US firms may slow new investment, they will prob. continue pumping from existing fields.  The cost of production in existing fields is low and many US producers have hedges in place that will protect profitability.  WSJ   http://goo.gl/sdwjsY US oil drilling starting to slow?  Permits for new wells dropped 15 percent across 12 major shale formations last month according to Reuters.  For the first time there are signs of a retrenchment in US output.  Reuters   http://goo.gl/UQsZHE Asia forecasts big Saudi price cuts – Asian refiners forecasted big price cuts … Read more

Why Larry Summers sees danger ahead for the economy – The Washington Post

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I’m not a big fan of Larry Summers more on style points as he comes off as pedantic and long winded but I have to admit he makes a lot of sense here.  There is a big difference in investing between wishing what you would like to see happen and what will probably happen.  In this case the oil and gas infrastructure and broadband are getting built out in spite of all the things in the Obama administration does to derail it as opposed to support it. Why Larry Summers sees danger ahead for the economyShare on Facebook Share on … Read more

‘s most successful oil man thinks so

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Has Oil Bottomed? Continental Resources Thinks So By Ben Levisohn When Continental Resources CLR revealed that it had cashed in its hedges on the price of oil–earning $433 million in the process–it was also making a big bet on the price of oil rising. Wunderlich’s Jason Wangler explains:…the company put its money where its mouth is or more properly took the money and ran by cashing in its oil hedges through 2016. If nothing else, we like the gutsy move as we agree with the oil price thesis that these levels are unsustainable.Now that Continental has monetized its hedges, at … Read more

‘s mine

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It’s hard to find the contrarian view in the oil patch these days but some of our contrarian observations are: A barrel of oil is worth far more in the U.S. than in other parts of the world. The U.S .is the most stable place in the world with large proved reserves. Most discovered deposits of oil are in politically unstable countries or in hard to reach locations with undeveloped infrastructure like the Arctic or ocean floor Large oil and gas exploration companies like Exxon, BP, Royal Dutch, etc. plan capital budgets for decades out. If the price of WTI … Read more

Merrill Lynch is the cause of the Ebola economic panic, written by a lawyer not even a healthcare worker!

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I think Merrill Lynch is the main cause of the  global economic panic about Ebola.  They published this report 10-3-14 on Ebola front page as part of their big global strategy update.  Note the author of the Ebola piece, Sarbhit Nahal, is not even a healthcare worker, he’s a friggin lawyer. “Be prepared to fight pandemics This week, we discuss a number of topics related to themes from our A Transforming World framework. As Ebola concerns loom, the risk of a pandemic spreading globally is a question of when rather than if, according to strategist Sarbjit Nahal. He suggests the … Read more

Is there more downside risk? Insiders will soon provide the answer

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I spent a little while today calling clients and calming nerves.   If you didn’t get a call from me today, you will tomorrow.  Most of our clients are not too nervous and that could be a bad sign as real bear markets end when they have pushed everyone out of the market. That is if we are in a bear market. I don’t believe we are there yet unless interest rates rise aggressively or there is some global shock that causes an unforeseen economic retraction. Is Ebola the global shock?  Don’t think so. I talked to Geoff Tabin today about … Read more

| Reuters

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Reuters – The stock markets long-suffering short sellers finally have something to smile about.    Investors who make a living betting that stock prices will fall are in a position to profit handsomely as the U.S. equity market sinks, with its biggest weekly plunge in more than two years last week and continuing to decline so far this week.    After lean years in which short-biased funds tracked by eVestment have posted double-digit losses every year since 2008, some were able to post among the investment industrys best returns in September and may well have done even better in the first two … Read more

Crude oil in free fall creates long term buying opportunity

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I think the sharp drop in crude and the decline in some US centric shale plays creates a buying opportunity.  We bought Anadarko, Apache, Continental Resources, EOG, a little Chesapeake and quite a bit of Occidental today.  It’s a falling knife for sure but we are probably a lot closer to the bottom than the top. We don’t pretend to be able to portend the future price of crude. I don’t think the CEO of Exxon can do that.  What is clear though is that the US has become the most reliable, safest place in the world to explore and … Read more

This is when you make money- sellers are unloading while insiders and corporate mergers are growing

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I don’t know why the market is selling off and I really don’t care.  Markets are occasionally irrational.  What’s striking about this sell off is that I have the largest amounts of stocks on my screen and in our portfolio below levels that insiders have bought them at in a long time.  This is usually a bullish sign. It also coincides with a big step up in M&A.  Strange that sellers are unloading what insiders and strategic buyers are taking. This is when you make money.

| Bank Innovation

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The Real Reason PayPal Isn’t an Apple Pay Preferred Partner SEPTEMBER 30, 2014 BY IAN KAR Earlier this month, before Apple Pay came out, Bank Innovation wrote that Apple and PayPal had been involved in talks for … something. We’ve finally tracked down the full story. via The Real Reason PayPal Isn’t an Apple Pay Preferred Partner | Bank Innovation. John Donahue, CEO, of Ebay is the worst CEO I have seen in some time.  Ebay has gone straight downhill since Meg Whitman left.  He should be fired if not indicated.  He’s blowing it again bringing in a CEO from … Read more

Wall Street is all about the people with conviction taking money away from those without it

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Angie’s List (ANGI), up 25.6% following Financial Times report that the company is exploring a potential sale.. Wall Street is all about the people with conviction taking money away from those without it.  An analysis of the balance sheet and the insider trading told us this was likely to happen.  Wish we had bought more but reassuring we bought more the same day Cowen started coverage with a market perform at a 52 week low.  That’s why Wall Street analyst rarely make you money.  They are herd followers.  Angie has to sell itself or trim expenses dramatically.  For a company … Read more

‘s rosy scenario- everything comes out just fine like a Hollywood script

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14:09 ECONX Fed Projections- September Update Variable Central Tendency (Sept 2014) 2014 2015 2016 2017 Longer Run Change in real GDP 2.0 to 2.2 2.6 to 3.0 2.6 to 2.9 2.3 to 2.5 June Projection 2.1 to 2.3 3.0 to 3.2 2.5 to 3.0 N/A 2.1 to 2.3 Unemployment Rate 5.9 to 6.0 5.4 to 5.6 5.1 to 5.4 4.9 to 5.3 5.2 to 5.5 June Projection 6.0 to 6.1 5.4 to 5.7 5.1 to 5.5 N/A 5.2 to 5.5 PCE Inflation 1.5 to 1.7 1.6 to 1.9 1.7 to 2.0 1.9 to 2.0 2 June Projection 1.5 to 1.7 1.5 to … Read more