opihiman2

Updated stats: Pretty impressive spike in call buying. It should be interesting to see what happens when all those options start expiring. That was a very good Twitter thread. Much thanks for posting that.

I've been on the sidelines this whole rally, and honestly, I don't even care. I'm up big time on my recession play: going 100% long 30 yr treasuries. The stock market, though has been a bit bewildering and fun as hell to watch. I voted way back that I had no idea where this would go, because the biggest thing I've learned over the past 10 years is: 1) US equity markets are addicted to QE 2) The Fed has destroyed any sense of price discovery Because of that, I was like, shrug, who knows where this is going. But coming out of this, it's pretty clear. The Fed will now have to continually back stop credit markets and thus equity markets. J Powell did not like what he saw in the repo markets. People thought he gave in to the bear market decline of 2018, but from what I've read, it was the repo market that caused him to get off his ass. Even though he has said publicly that it's not the Fed's job to back stop the stock market and that QT was on auto pilot, he's made it crystal clear that won't ever happen again. I've recently heard that after GFC, there was talk at the Dallas Fed of back stopping pension funds. It's getting absurd, and I think this will all end really badly someday. The one thing I'm looking for is when the Treasury starts to flood the markets with new issuance to fund the massive deficits and stimulus spending. Either the Fed starts ramping up their purchases again to basically monetize all of this along with other open market operations to drive down rates and the dollar -- which has been happening dramatically this past month. Dollar index is down 5%.

Are you paying or is this some kind of choosing beggars type of thing?

I actually wonder how these companies will be doing with all the mortgage stress coming onto the markets. Especially in the next few years. Any thoughts on this?

Chanos has done a great job with his main fund. And to the biases on this particular forum, if history had broken slightly differently he would have nailed Fairfax as well. He's been short almost all of the major frauds and even the ones he's been burned on, he's been mostly right in the long run (i.e. AOL). I see no reason not to have total respect and pay total attention when he speaks on specific companies. You're free to disagree but he's usually got a point. I recall Ackman being 100% certain Chanos was dead wrong on Valeant - and Ackman was the one caught dead wrong. Happens to all of us - but it was a good reminder that Chanos' work is usually pretty solid - Ackman works pretty hard and still missed it. Value investors specifically need to pay attention to Chanos because as a group we've missed a lot over the years and he's caught many of them. I've been paying attention to Chanos. I love the guy. I think he's one of the few short managers that has actually generated alpha from his shorts. Anyways, what's the deal with Fairfax? I haven't kept up with FFH for almost a decade now. As an aside, if I hear about a Chanos short, and it's a company I'm interested in, I don't take that trade. It's always good to hear about some short thesis from a well known short. They do way more DD than I ever would on a company. I'm probably the only one on this board who has ever actually talked to Chanos. He's smart, but his ego gets the better of him, as it did with Fairfax 15 years ago. I asked him point blank if he had done the research on Fairfax and why he was short. He said, no...he was relying on information from two analysts...and we know who they are for those that were around then. I asked him if he had ever read a Fairfax annual report or quarterly report, he said "no". He's made a huge reputation out of a couple of significant shorts, and he's made a bundle offering that service to institutions and investors. I didn't like the guy then, and I'm certainly no fan today. Cheers! Ah, much thanks for the response, Sanj. Ok, I do remember the short attack on Fairfax, but I vaguely recall the details. I did not know Chanos was part of the short attack. To be honest, I didn't really follow it until after the fact. But, I do remember a few board members made out like bandits by going long calls.

Chanos has done a great job with his main fund. And to the biases on this particular forum, if history had broken slightly differently he would have nailed Fairfax as well. He's been short almost all of the major frauds and even the ones he's been burned on, he's been mostly right in the long run (i.e. AOL). I see no reason not to have total respect and pay total attention when he speaks on specific companies. You're free to disagree but he's usually got a point. I recall Ackman being 100% certain Chanos was dead wrong on Valeant - and Ackman was the one caught dead wrong. Happens to all of us - but it was a good reminder that Chanos' work is usually pretty solid - Ackman works pretty hard and still missed it. Value investors specifically need to pay attention to Chanos because as a group we've missed a lot over the years and he's caught many of them. I've been paying attention to Chanos. I love the guy. I think he's one of the few short managers that has actually generated alpha from his shorts. Anyways, what's the deal with Fairfax? I haven't kept up with FFH for almost a decade now. As an aside, if I hear about a Chanos short, and it's a company I'm interested in, I don't take that trade. It's always good to hear about some short thesis from a well known short. They do way more DD than I ever would on a company.

Yep, I agree. A few weeks ago, I was pretty naive about the super majors being able to weather the storm. I think oil is going to be in a multi decade bear market. Past decade was a huge bear market already. The whole point of these oil majors were the dividend. Now that's definitely in question. I think XOM pays up till Q2. I wouldn't be surprised if it cuts in the second half of the year. I wouldn't be surprised if they completely suspend the dividend. That would bring the year average to about 4%. Seems to be the industry standard yield. People are delusional.

I wouldn't go long XOM anymore. It's been in the doldrums for a long time, and they've made a bunch of strategic mis-steps that have hampered their balance sheet. They're doing even worse things now like maintaining a dumb dividend and taking on massive amounts of debt to do so. I would even go so far to say you should short XOM on any price strength. It's going to be a loser in the next few years. A few weeks ago, the play for me was short anything shale, go long super majors and vertically integrated E&P. But, I'm stepping back from that, and will probably not go long any energy now except keep shorts on. RDS had one of the best balance sheets out of the majors, and it just cut dividend big time to something like < 4% yields. At this point, there's nothing attractive about these companies other than surviving the next few years and making a bet on WTI and Brent going and staying above $60 / bbl. I don't think that happens for a long time.

https://www.reuters.com/article/us-chesapeake-enrgy-bankruptcy-exclusive/exclusive-chesapeake-energy-preparing-bankruptcy-filing-sources-idUSKBN22B31M So it begins. Looking forward to seeing another board favorite, Sandridge Energy head into Ch.11 as well. What a stupid ride that was.

So it begins: https://www.reuters.com/article/us-chesapeake-enrgy-bankruptcy-exclusive/exclusive-chesapeake-energy-preparing-bankruptcy-filing-sources-idUSKBN22B31M Can't believe it has taken this long. I can't wait to post SD's bankruptcy on that inane thread as well.

Looks like the VLCC tanker play is taking off today.

This reminds me of an old article: https://www.bloomberg.com/news/articles/2015-11-03/that-time-i-tried-to-buy-some-crude-oil

Yeah, there's really no way to take advantage of this. In a contango market, direct ETF exposure is a guaranteed money loser. A lot of people don't get this and plow into funds like USO and USL without understanding how the get exposure to oil prices. These current contract prices are getting closer to the actual spot price of oil, and unless you can take delivery of an ACTUAL barrel of oil, you're still going to lose money. The only way to get exposure to oil prices without getting screwed by contango is going long equity in oil companies. But, in the past two weeks, there's been a large disconnect between the two. Unless current spot of WTI goes above $30, even XOM will be financially impacted.

Wow, how the mighty have fallen. To think I actually entertained the thought of putting in some money into CGMFX back around 05/06. But, then I realized there's no way this commodities bull market is going to keep going through the roof. I wonder how Bill Miller's new fund is doing ever since he decided to get back into money management. Talk about poor timing.

Haven't been following this thread, so don't know if this has been posted. But, COVID19 has now killed more people in the U.S. than the flu did in the entire 2018-2019 year. And that's including the shutdowns this entire month or so. So much for the virus being just another flu.