Sophisse

Comment Stream

Comment Stream
Filter comments by:
Highest rated Latest comments
Or filter by symbol:
  • These Three Deep Sea Drillers Look Like a Bargain
    The way I see it, these drilling companies will do well regardless of whether oil rises more or falls - as long as it doesn't collapse due to some economic meltdown, which I think highly unlikely. (Note that I said economic meltdown, not market meltdown.)

    I don't think their results will vary that much depending on oil price - they don't really get a cut (do they?). At anything close to today's oil price, their services are gonna be at max demand and they'll be building capacity and hiring workers as fast as they can. There's a limit to how fast they can expand.

    So that's why I like them - they won't float with the oil price, either up or down - they're solid.

    But I'm no expert, someone correct me heh.
    Jun 18 18:42 pm |Rating: 0 0 |Link to Comment |View article
  • What China's Stock Market Implosion Means for Oil
    I don't think the wealth effect is going to have too much of an effect on the average chinese citizen. Most people don't own any shares at all. What matters to them is economic growth, which is still strong in china. As long as their economy grows, they will burn more oil. That will be true even if the government ends their subsidies, though I'm sure that would cause a slowdown in oil usage growth and very likely a short-term contraction of usage.
    Jun 17 19:11 pm |Rating: 0 0 |Link to Comment |View article
  • Economics of Oil Futures Trading, Part I
    I read the report. I couldn't get past all the inter alia's though.
    Jun 17 12:46 pm |Rating: 0 0 |Link to Comment |View article
  • How Much Inflation Will We Have to Endure?
    I agree with the other commenters. TIPS sound like a great thing until you look into the details of how they calculate the inflation rate.
    Jun 16 00:43 am |Rating: 0 0 |Link to Comment |View article
  • The Great Oil Deception: Part Two
    "It is getting much more expensive to find Oil these days."

    Are you really just talking about "finding"? Most people, saying that, would think you meant the total cost per barrel of a new find.

    Don't you think that it is a bit more expensive to get oil out from under thousands of feet of ocean, than it is in the fields of Texas, the deserts of the Middle East, or the tar sands of Canada? Regardless of what else you think about the price of oil, the role of speculators, etc., it is pretty darn obvious that it costs more to get additional supply, now that the easiest fields are declining.

    If all you meant was "finding", well, I don't think that qualifies as a Great Deception.
    Jun 16 00:19 am |Rating: 0 0 |Link to Comment |View article
  • Oil Swings Go Beyond Fundamentals
    I think people expect prices to go up in some proportion to demand going up. And maybe they are right.

    But consider this thought: what if, up till now, supply has basically been sufficient to satisfy every mile that anyone wanted to drive. I.e. there's extra capacity that could be ramped up. In that world, prices are a function of costs, plus some decent profit to suppliers. If suppliers want more profit, they have to organize a cartel, i.e. OPEC.

    Now imagine that we have just crossed the line to a world where there are a few more miles people want to drive than there is gas to power them. Now, the prices have to rise to the point where some people who want to drive some miles, decide not to. I.e. prices are determined by value to the customer.

    Cost + profit is a totally different number than utility value to the customer. Flipping from one to the other could involve a small amount of oil but a huge swing in prices. Like we're seen.

    Analogy: if 10 guys come in from the desert dying of thirst and there's a whole costco full of water there, they are going to get their water for a buck a bottle like anyone else. But if 10 guys come in from the desert and there are only 9 bottles of water for sale, whoever sells those bottles is gonna get their whole wallets and credit cards because someone is going thirsty.

    Read the IEA report. People are going thirsty. The big question to me is, will new production get us back into the lovely world we have been so used to for all these years? Or are we in a world where every extra gallon burned in BRIC has to be balanced by a gallon less burned in US/Europe?

    Course, maybe it's just a bubble /shrug
    Jun 11 14:31 pm |Rating: 0 0 |Link to Comment |View article
  • Another Bullish Argument for Commodities: Demographics
    It is a fine line the developed world walks. If we close off emerging markets, the stockings will be empty on Christmas. If we keep it open, then inflation and currency decline steals money from everyone.

    I think they'll talk up protectionism, but won't actually do much.
    Jun 10 19:54 pm |Rating: 0 0 |Link to Comment |View article
  • Why Microsoft Will Never Win (Again)
    As always, when you're actually there, things look a bit different. NetDocs had controversy and executive clashing, but that was true for every single new product ever at Microsoft - and still is, though to a much lesser extent. The real problem was, they couldn't build it successfully. It started off as something totally different than netdocs, got repurposed, then repurposed again - it turned into an unmanageable goop of code and collapsed under its weight. This project just stumbled - the people working on it were excellent - but software is hard. Even the world's best screw up on a regular basis.

    There's very little to conclude about Microsoft's current prospects from its actions 10 years ago. It is a different company.

    But still, after working there 1993-2000, I don't own a single share :)
    Jun 06 11:33 am |Rating: 0 0 |Link to Comment |View article
  • How Bad Is the Oil Shock of 2008?
    Thank you for the excellent article. Opinions are good, but opinions backed up with data are much better.
    Jun 06 11:00 am |Rating: 0 0 |Link to Comment |View article
  • Calling a Housing Bottom
    Thank you for the insightful article.
    Jun 05 15:27 pm |Rating: 0 0 |Link to Comment |View article
  • Airlines Will Profit No Matter What
    Jack - found your article from Jan 6 when you recommended United Airlines at $32 and American Airlines at $13. UA is now under $10 and AMR is under $8. seekingalpha.com/artic...

    Ouch.
    Jun 05 15:16 pm |Rating: 0 0 |Link to Comment |View article
  • Airlines Will Profit No Matter What
    "The reality is that we have used one trillion out of more than 13 trillion barrels of oil."

    You really need to back that up. Serious oil analysts will debate about new finds, how much can come online at what price over what duration, whether the Saudi fields are as large as they say, etc. But nobody (that I've found) ever says anything like 1/13.

    A few years ago, people were looking at $35 oil saying that it had to come down from its highs. Now people are hoping it will drop below $100. The futures market is currently pricing 5-year oil at over $120. Plenty of people think it will drop - but not many think it will radically drop.

    Personally i could expect a drop but then starting to rise again. We need these high prices in order to justify, and pay for, the large investment needed to bring new sources of oil (and/or alternatives) online.

    Prices are now permanently high, at least compared with a decade ago. Airlines are forced to raise prices, which won't even make them more money, just pays for their higher costs. Higher prices make people travel less, an effect amplified by the higher costs of food and gas that leave less discretionary income people's pockets. Meanwhile the airlines are stuck with debt, losses, and a big pile of inefficient aircraft. They need to reduce staff, reduce flights, and upgrade some of their aircraft and junk the rest. All this costs new capital. Old investors are gonna lose their shirts - whatever shirts they have left!
    Jun 05 14:14 pm |Rating: 0 0 |Link to Comment |View article
  • GM Calls the Top for Oil
    Toyota doesn't get everything right. Did you see their press release on May US sales? Their sales of Priuses was down 37.5% "mainly as a result of limited availability". biz.yahoo.com/ap/08060...
    Jun 03 22:29 pm |Rating: 0 0 |Link to Comment |View article
  • The Rising Risk of Emerging Markets
    There are really only two ways to predict the future. Either "trend x has gone on for a long time so it will continue", or "trend x has gone on for a long time so it will soon change/stop/reverse&qu... I thought you were going for option (a), but you jumped onto option (b) at the last minute.
    Jun 02 17:31 pm |Rating: 0 0 |Link to Comment |View article
  • Compared with Canada, U.S. Economy Looks OK
    You're talking about that Canada to the north, right? The one with all the oil, gas, and minerals? Haven't those been doing well lately?
    May 30 17:21 pm |Rating: 0 0 |Link to Comment |View article

Sophisse's Comments Stream Stats

  • 52 Comments, 0 , 0
  • Total Comment Stream rating - = 0