03
Nov

Tuesday Morning – Lots of Earnings

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Market Sentiment Watch: I continue to be cautious with regard to this market with fairly good effect. Yes I could have gone short but I really didn't see this much of a protracted decline. I expect Friday's employment to go a long way towards either underpinning or pinning down the broad market.

M&A Watch:

  • (BRK) buys (BNI) for $44 billion. It will be interesting to see the impact on markets of this biggest ever acquisition by Buffett and on the Transports which have been lagging.

Eco Data Watch:

  • Factory Orders - After the open, forecast of 0.6%.
  • Car Sales for October, after the open, forecast to be 10.5 mm.

Conference Call Watch: (there are more listed in the table on the calendar page for this week but these are the ones I'll be on today). All times EST. See comments on several of these in the Stuff section. 

  • CHK - 9 am - listening for the gas macro today.
  • APC - 10 am
  • PQ - 9:30 am - will listen to replay
  • EXXI - 10 am - replay or transcript
  • SFY - 10 am - replay will peruse release for Eagle Ford comments relating to the JV with HK announced yesterday.
  • SM -10 am - replay or transcript
  • BBG - 12 pm
  • FST- 2 pm
     

In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Crack Spread Update - Move along, nothing to see here.
  4. Stuff We Care About Today - Earnings comments on APC, SM, EXXI, FST
  5. Odds & Ends

Holdings Watch:

  • $10KP II:

    • $17,500
    • 73% Cash
    • The Current Holdings Tab Is Updated.
    • Yesterday's Trades:

      • FST – Added (10) November $20 calls (FAHKD) for $1.05 with the stock at $19.16.
  • ZLT:

    • Yesterday's Trades:
      • KOG - Sold 20% of my KOG position for $2.45, up 120%.
      • SD - These funds were swapped into SD common shares at $10.49.


Commodity Watch

Crude oil rose $1.13 to close at $78.13 yesterday on a slightly weaker dollar. This morning crude is trading off $0.50 to $1.00 on strength in the dollar and weak equity futures. Losses have been paired

  • Early Read On Oil Inventories:
    • Crude: UP 1.5 mm barrels (still could be some large upside here if more normal import levels come ashore).
    • Gasoline: UP 0.3 mm barrels
    • Distillates: DOWN 0.5 mm barrels 

Natural gas fell $0.22 to close at $4.82 yesterday despite a cold forecast for this week and because of the EIA's report for gas supply for the month of August released mid day last Friday.  This morning gas is trading slightly lower with crude.

  • Imports Watch: Down 0.1 Bcfgpd from last week and 1.1 Bcfgpd from last year.

    • Canada: 6.2 Bcfgpd, down 1.6 Bcfgpd from year ago levels.
    • LNG: 1.2 Bcfgpd, up 0.5 Bcfgpd from year ago levels. Blame project delays on new gas and increasing Chinese demand. Note also that Russia just informed the E.U. that it will be cutting gas supplies to Europe over the winter due to Ukraines financial issues. This will have the effect of diverting gas on the high seas to Europe, especially if they have a cold winter.

Crack Spread Update


 

Key Takeaways:

  1. Valuations remain cheap on a forward basis but I have very little confidence in the 2010 EPS projections as the 2009 numbers were significant a year ago than they are now with only a quarter remaining in the year.
  2. Conference calls to have been, not to put too fine a point on it, depressing. I just can't get enthusiastic about the group until I see either:

    1. a protracted pick up in gasoline demand
    2. or a increase in diesel demand in the States and abroad.
  3. I remain on the sidelines. I keep up with this stuff only because some day the group will be attractive again. Maybe later in 2010 but maybe not as a wealth of foreign gasoline capacity is set to come on line.


Stuff We Care About Today

Companies of Interest Reporting 3Q Results: CHK, EXXI, FST, PQ, SFY, BBG

Earnings Briefs:

APC Reports A Big, Volumes Based Beat; Ups 2009 Volume Guidance; Operations Update Shows Progress On Multiple Fronts

The 3Q Numbers:

  • Production was much higher than expected at 57 MMBOE vs guidance of 49 to 52 MMBOE.
    • the beat was driven by much higher than expected U.S. oil volumes (23% above the range) and higher than expected natural gas volumes. APC includes some expected downtime in their estimates for the Atlantic season so the lack of a season helped create the beat.
  • Revenues of $2.033 B (net of gains and other) vs $1.988 B expected
  • Costs fell admirable on both a YoY and sequential basis.
  • EPS of ($0.11) vs ($0.33) expected
  • CFPS of $2.16 vs $1.92 expected

Guidance:

  • APC ups guidance from a range of 210 to 215 MMBOE to a range of 220 to 221 MMBOE equating to 7% YoY growth.

Highlights:

  • Lots of details in the Operations Update on their website, most of the big stuff like Venus has been previously disclosed but interesting to see the continued push, some say a bit late, into U.S. shales and the continuing efforts off W. Africa.

Conference Call: Today, 10 am EST. I continue to hold some higher strike calls here.

SM Reported Better Than Expected Bottom Line, Good Cost Control, Solid Operational Update

The 3Q Numbers:

  • Revenues of $185.8 mm vs $187 mm expected
  • Costs fell again, coming in better than expected
  • EPS of $0.23 vs $0.20 expected
  • CFPS of $1.78 vs $1.57 expected

Guidance:

  • APC ups guidance from 210 MMBOE to 220 MMBOE equating to 7% YoY growth.

Highlights:

  • 3 Eagle Ford Shales with 7 day tests in the 7 to 8 MMcfgpd range, good results to start. More wells drilling.
  • Bakken rig picked up but little to talk about there.
  • Haynesville vertical looks promising if uneconomic at current prices (not sure with all the drilling in this particular part of the patch they bother with a vertical at this time, more is good, sure but there's plenty out there)
  • Marcellus - 1st 2 horizontals completed, waiting on test

Nutshell: Good quarter, don't feel like I'm missing out by being out of the name still. Cheap to average at 4.5x 2010 CFPS estimate of $7.64.

Conference Call: Today, 10 am EST

 

EXXI Reported Ok Results; Name May Be On The Road Back To Interestingville

The FY1Q10 Numbers:

  • Production of 15,500 BOEpd:
    • vs 18,800 BOEpd a year ago
  • Revenues of $84.9 mm vs $83 mm expected
  • EPS of ($0.08) vs ($0.025) expected
  • CFPS of $0.19 vs $0.25 expected

Highlights:

  • EXXI comments they are "capable of producing nearly 20,000 BOEpd now" - that's an awkward way of stating your production after making the comment that your capital program is reversing the declines shown in the quarter just past. It implies you are producing much more without saying that you actually are.
  • New production additions help explain the previous bullet:

    • Announced 3 wells at their Main Pass 61 field. The 3 wells had a net combined rate of about 2,600 BOEpd and were place on line late in the quarter so that they would have had minimal impact on volumes.
    • Another 770 net came on from NFX's Fastball deepwater well
    • Onshore, the company has another 750 to 1,200 BOEpd set to come on in November
    • And the company has roughly another 2,000 BOEpd returning to service from hurricane damaged facilities (from the 2008 season) over the course of the next four months.
  • Davy Jones Watch:

    • The well is at 26,300 feet drilling towards 28,000 feet (maybe down by year end)
    • EXXI has a 12.6% NRI

Conference Call: Today, 10 am EST. I don't own it but am getting to know it and find it an interesting call option on some of the ultra deep targets being drilled from the shallow water Gomex.

 

FST Reported Bricks 3Q09 Results; Announces Big Haynesville and Granite Wash Wells

The 3Q Numbers:

  • Production of 476 MMcfepd (includes deferred production and asset sales totaling 14 MMcfepd)

    • vs last quarter of 520.8 MMcfepd (down 8%)
    • and down 9%
  • Revenues of $177 mm vs $252 mm expected
  • Cash Costs were $2.42 per Mcfe, down 3% from year ago level and up a dime (due to the lower volumes) from last quarter.  Higher interest expense almost entirely offset a large drop in per unit operating expense.
  • EPS of $0.48 (net of a bunch of non cash charges) vs $0.52 expected ~ conclusion: learn how to better guide the Street on volumes.
  • EBITDA of $193 mm vs $202 mm expected.

Guidance:

  • Range revised downward by 3 Bcf to 182 to 192 Bcfe to account for asset sales and 3rd pipeline issues experienced in the 3Q and I assume in the 4th quarter as well.
  • No 2010 volume guidance given
  • Cost guidance shows reductions:
    • LOE cut by 8%
    • G&A cut by 17%

Highlights:

  • Haynesville Shale:

    • Wells #3 and #4 in northwest Louisiana came in at 24 IPs of 21 and 15 MMcfepd, no other details provided. This compares to their first two wells which had initial production of --- and ---- MMcfepd.
  • Granite Wash:

    • FST's second horizontal well came it 30 MMcfepd (10 MMcfgpd, 1,300 bopd, and 2,000 bcpd---).
    • This ranks the well as the largest IP yet announced in the wash plays.
    • FST has a 94% interest in this well and has 93,000 net acres in the play; notably their acreage has largely been drilled on section corners (160 acre spacing) leaving horizontal downspacing potential.
    • Their first horizontal effort here IP'd at 17 MMcfepd.
    • FST has increased the rig count here from one last quarter to three at present; good to see after a long period of relative inactivity.
  • Balance Sheet. FST paid down $231 mm (9% of total) during the quarter via cash flow and asset sales.

Nutshell: Big wells vs a miss and weak looking near term guidance. This morning it looks like the later is going to win out vs the well results, which is sort of like driving using the rear view mirror but that's how the market sometimes works. Will listen to the call for clues as to the 2010 game plan.

Conference Call: Today, 2 pm EST.

 

Names of Interest Reporting For Wednesday:

WRES, DVN, LINE, SGY.

Odds & Ends

Analyst Watch:

  • (TS) upped to Buy at Jefferies. Drill pipe in demand.

 

167 Responses to “Tuesday Morning – Lots of Earnings”

  1. 1
    zman Says:

    BEXP had news out last night in the Bakken, details in a few

  2. 2
    elduque Says:

    you are not alone!!

  3. 3
    BirdsofpreyRcool Says:

    Good morning.

    Was totally out of touch (in the wilds of Flagstaff) for this latest mrkt correction. But agree with z, that is what this is, a correction, not a new Bear Market. So, can’t really short these things. Just keep some cash on the sidelines to take advantage of some pre-Christmas Sales.

    HeadTrader is laughing at the Bears… he loves this correction, as “back-and-fill” is required at this point.

    Will check in with TechTrader, to see what’s up for today.

  4. 4
    BirdsofpreyRcool Says:

    EXXI — found their “capable of 20k/day” comment to be a tad confusing. Don’t know the baseline production, to which to add all the Nov, Dec, and Feb incrementals. But figure that will be well covered in the 10am conf call.

  5. 5
    BirdsofpreyRcool Says:

    TechTrader out of the office today… no color there.

    BofEngland kicking the mrkt in the head this morning, with additional capital infusions to RBS and Lloyds. Warren Buffett’s purchase of BNI reversing a bit of that.

  6. 6
    BirdsofpreyRcool Says:

    Just to give some benchmark levels on Credit —

    IG13 110 (the tighest/highest on this was around 91 recently)

    HY13 92 (think we got to almost 96 on this about 2 weeks ago)

  7. 7
    BirdsofpreyRcool Says:

    TechTrader in with a 55/45 call for a LONG trade off the morning gap. However, the Buffett news may have changed the dynamics there. Will pass along any comments, if I get them.

  8. 8
    BirdsofpreyRcool Says:

    MB — any thoughts on EXXI this morning?

  9. 9
    zman Says:

    CHK call ongoing

    Welcome Back BOP! Thanks for the color.

    BEXP called higher on a 28 stage frac well announced last night, the BCD Farms well, 1,776 BOEpd IP. This is fairly distant from the previously announced 2,100 BOEpd well previously announced in the Rough Rider area. 2 more wells are approaching TD in Rough Rider. This may also be good for USEG but I’m not sure if they are in this well.

  10. 10
    zman Says:

    Crude down $1.40 now, dollar, weak equity market.

    CHK going to Q&A already.

  11. 11
    zman Says:

    FST going to be down on the open on the miss, big wells there, call late in the day, may be an opportunity in the afternoon.

    RBC actually raised their target on FST from $24 to $26 this morning (results backward looking, big wells forward looking).

  12. 12
    zman Says:

    NG going positive on CHK’s comments that declines are inevitable and that they aren’t hedging 2010 because they will get higher prices later.

  13. 13
    BirdsofpreyRcool Says:

    #9 read that the well was 13 miles away… so can’t draw any connections between the two wells. But, BEXP seems to have hit some pretty sweet spots, for sure!

  14. 14
    zman Says:

    More CHK comments:

    Why taking longer for it to show up. Same as in Canada years ago…uncompleted wells working through the system. He mentioned the YoY bottoming in gas production gains which I show at the bottom of the NG Supply Slide Show.

  15. 15
    zman Says:

    BOP – in my book, the further away the better, in proving up their 95,000 acres in this part of the Bakken.

  16. 16
    Jay Says:

    Good Morning All,

    If you have a moment here is my presentation as a “Technology Spotlight” at LAGCOE last week in Lafayette, LA.

    We were one of seven chosen for a Spotlight among 450 exhibitors. Had a lot of fun with the talk, had much less in the way of potential end users, much more in the way of international types looking for the “next new thing”.

    http://www.youtube.com/watch?v=dag1_YGL2Xk

    Regards,

    JR

  17. 17
    zman Says:

    Analyst Watch: RBC taking SM target from $32 to $37.

  18. 18
    john11 Says:

    Re 9 yes USEG is in that well:
    The BCD Farms 16-21 #1H well, which is operated by Brigham Exploration Company (NASDAQ: “BEXP”) (“Brigham” or “BEXP”), flowed at an initial 24-hour production test rate of approximately 1,553 barrels of oil and 1.34 MMCF of natural gas per day or 1,776 BOE/D. The well is located in the northwest portion of the Rough Rider acreage, and is located approximately 13 miles northwest of the Brad Olsen well. The well was completed with swell packers and 28 fracture stimulation stages. USE’s initial working interest in this well is approximately 45% (~35.55 net revenue interest), and sales from this well are expected to commence immediately.

  19. 19
    elijahwc Says:

    There was a second very interesting tidbit out on USEG last night:

    TORONTO (Dow Jones)–The geothermal sector could soon add one publicly
    traded company and lose another.
    Standard Steam Trust LLC is eying an initial public offering, according to
    market talk, while Sierra Geothermal Power Corp. (SRA.V) could soon be sold if
    a dissident shareholder group gains control of the company’s board.
    The geothermal sector, often referred to as the ugly sister of
    renewable-energies, is garnering increased interest thanks largely to the
    influx of U.S. stimulus funding. Last week, for instance, the U.S. Department
    of Energy announced US$338 million in grants for geothermal energy
    development.
    Geothermal power is derived from hot springs or geysers deep underground. It
    uses hot water to generate steam to turn electricity-generating turbines.
    Standard Steam is looking to raise a minimum of C$50 million, according to
    market talk. The Denver company, which declined to comment, has about 96,000
    acres of Bureau of Land Management, state, and fee leases in Idaho, Nevada and
    Utah. The company is 25%-owned by U.S. Energy Corp. (USEG), a diversified
    natural resources company based in Wyoming.
    If the IPO is successful, it would be the largest in the geothermal sector
    since Magma Energy Corp. (MXY.T) raised C$100 million in July. Magma commenced
    trading in July at C$1.50 and closed at C$1.81 in Toronto Monday.

    Ram Power Seen As Most Likely Buyer Of Sierra

    Sierra Geothermal has called a shareholder meeting for Jan. 26 at the behest
    of Exploration Partners 2005 Ltd. Exploration, which owns more than 5% of
    Sierra’s shares, is seeking board control and is expected to sell the company
    if it’s successful, according to market talk.
    Sierra is coveted by larger rivals because it has the largest land bank of
    geothermal-development properties in the U.S., including four properties fully
    permitted for drilling, sources said. The latter properties are particularly
    attractive because they could be eligible for hefty investment-tax
    credits/energy grants that cover 25%-30% of the capital costs if certain
    drilling milestones are reached in 2010.
    The most likely buyer for Sierra is Ram Power Corp. (RPG.T), formerly GTO
    Resources, sources said. That’s because Sierra is believed to have held talks
    with GTO during the summer about being part of a business combination that
    ultimately saw GTO acquire Polaris Geothermal Inc. and Western GeoPower Corp.
    Exploration Partners, a unit of Global Resource Investments Ltd., was a
    major shareholder of Polaris and Western GeoPower. Given its support for the
    acquisition of Polaris and Western GeoPower by Ram, sources believe Ram is the
    most likely candidate to buy Sierra if Exploration Partners wins board
    control. Ram and Sierra also have properties adjacent to each other in Nevada,
    sources said.
    Officials from Exploration Partners weren’t immediately available for
    comment.
    For its part, Sierra is refusing to publicly talk about the pending special
    meeting, but said it would act in the best interest of shareholders, even
    dissident ones, who have stakes in rival geothermal companies.
    While Ram is the most likely candidate to acquire Sierra, other geothermal
    companies, such as Magma or Ormat Technologies Inc. (ORA), are also potential
    bidders, sources said.

    -By Stuart Weinberg, Dow Jones Newswires; 416-306-2026;
    stuart.weinberg@dowjones.com

  20. 20
    zman Says:

    CHK saying its had some Haynesville wells come in at $6 mm, 29 days on a 4,500 foot lateral. You don’t need $6 gas for that to be economic with the IPs they have been seeing (high teens MM/d)

    Congrats Jay, will check it out after all these calls.

    Thanks John, I assumed so when I saw the bid there but hadn’t had a chance to check.

  21. 21
    zman Says:

    BOP – any chance you could run a question on the S&P chart by TT? Wondering if he thinks this sell down is just like the last two months ends and that if we see a couple days of turn, above the previous month end low, that we have a shot at a quick turn back higher. Thanks.

  22. 22
    zman Says:

    CHK commenting that they would get All of last year’s negative reserve revision for low prices at year end back at a price of $5.50. This year it will be based on a backward looking 12 month average. A lot of people are going to look a lot cheaper on a TEV/Mcfe basis at year end 2009.

  23. 23
    zman Says:

    Aubrey saying that we are transitioning from a period of too much gas and not enough pipeline to the reverse. Effect will be a continuance of the narrowing of differentials to Hub. He said differentials are now lowest in 3 years company wide.

  24. 24
    zman Says:

    APC call in 10 minutes, one of the few energy names in the green right now, that was a big beat. Group has rallied off the lows…feels like they want to go higher.

    We get Factory orders and car sales in 10 minutes as well.

  25. 25
    VTZ Says:

    Well, now that dollar broke above 76.30-76.40 range we might see a rally up.

    TLM announces that they are splitting into two units.

  26. 26
    BirdsofpreyRcool Says:

    #23 — that would set up the Golden Age for nat gas producers. That would be huge. So, is Aubrey largely unhedged at this point?

  27. 27
    zman Says:

    Thanks V – it’s Britain’s fault. On TLM, saw the blurb, didn’t see if both would be tradeable entities or if its just internal.

  28. 28
    zman Says:

    BOP – I think he’s 8% in some high priced swaps and 14% in some $6.75 collars, going on memory but, its low for them for this time of year, usually more like 65% hedged on next year’s volumes by this time of year.

  29. 29
    choices Says:

    Euro weak-down 0.0117, now @1.466

  30. 30
    zman Says:

    And agree, that would be huge, and you don’t need as high a price for your gas if you get more for it compared to hub. Also, can’t underestimate the impact of drilling faster, cheaper and growing volumes while reducing your op costs. Very powerful cash flow leverage when prices move up even modestly.

  31. 31
    BirdsofpreyRcool Says:

    z #28 — that’s what i wanted to hear… he is putting his hedges (or lack of them) where his mouth is. Bullish call.

  32. 32
    zman Says:

    BOP – he’s been a masterful hedger in the past. Taken a lot of heat for being over hedged for 2008 and 2009 back in 2007… he was right.

  33. 33
    VTZ Says:

    Oh you’re right it’s internal restructuring. I only read the headline and it sounded like a similar arrangement to Encana. It’s just a break into Shale and Conventional units.

  34. 34
    BirdsofpreyRcool Says:

    going to listen to the EXXI call… where will you be?

  35. 35
    BirdsofpreyRcool Says:

    z — agreed. He has gotten the hedging right since about 1999… that’s a pretty good run.

  36. 36
    zman Says:

    Thanks V, wasn’t sure.

    About to switch to APC call, would like to listen to SFY and SM and the rest but them’s the breaks, will listen later or read the transcripts.

  37. 37
    BirdsofpreyRcool Says:

    seeing comments that APC was a “blowout quarter”

    also, factory orders just came in a tad bettern expected

  38. 38
    zman Says:

    BOP – can you drop notes on the EXXI call on the site. Funny your comment about their production comment was the same as mine, lol. Makes some sense when you read their about to hit or just hit and didn’t affect the quarter numbers. Bet they don’t have much to say on Davy at this point. Shiller is a smart guy.

  39. 39
    zman Says:

    APC had a great quarter, no spinners in the Gulf helped along with better well performance in the Rockies.

  40. 40
    baylor3217 Says:

    What’s the best ticker to track the dollar on yahoo?

  41. 41
    baylor3217 Says:

    interesting that BRK does a huge acquisition and goes up. That’s a little unusual for the acquiring company isn’t it?

  42. 42
    zman Says:

    Factory orders up 0.9%, forecast was 0.6%

    Baylor – try UUP

  43. 43
    BirdsofpreyRcool Says:

    EXXI — that Main Pass Field is a doozie… wonder how many more wells they think they can sink there…

  44. 44
    BirdsofpreyRcool Says:

    baylor #41 — yes, unusual. But BRK already owned 23%… so, it’s considered an “insider buy.” Like seeing the CEO CFO, and COO buying their own shares.

  45. 45
    zman Says:

    BOP – Ironic that I’m listening to Hackett, Shiller’s old boss at Ocean at the same time. APC moving well now.

    FST coming green.

  46. 46
    BirdsofpreyRcool Says:

    EXXI — very positive… debt reduction WILL close by Nov 12th (SEC has been the drag here)… taking DJ now.

  47. 47
    BirdsofpreyRcool Says:

    “talking DJ”… not much said… just on track. Things coming in where they thought they would.

  48. 48
    BirdsofpreyRcool Says:

    EXXI — saying will avg 20k/d for FY10

  49. 49
    zman Says:

    BEXP bumping up to $10 again,

    WLL actually up today…shhhh

    WLT back to $60.

    Pretty much all moot unless you take profits/losses before Friday’s employment numbers in my book, unless those numbers come in ok.

  50. 50
    zman Says:

    APC – Venus – Sierra Leone

    Nothing new. Just saying its one bracket on a now 700 mile long Cretaceous fan play with the other end being Jubilee off Ghana.

  51. 51
    VTZ Says:

    The USD is hugging its 50-day

  52. 52
    BirdsofpreyRcool Says:

    EXXI — really focusing on oily production; drilling costs in MPass 20% less than AFE ==> well payback 2 mos (!!). Think service costs back to 1999/2000 levels.

  53. 53
    BirdsofpreyRcool Says:

    EXXI = 79 development drilling locations within current field locations… think 100% RoR with 2-month payout. wowsers.

  54. 54
    baylor3217 Says:

    Z, thoughts on averaging down on the WLT Nov 60 Calls?

  55. 55
    zman Says:

    Baylor – unlikely before Friday’s data.

  56. 56
    bill Says:

    EXXI- VOLUME TAKEAWAY QUESTION

    sounds like they will be above 20,000 k per day

    Fastball improvement
    Today 21,000 (if i heard right)
    Key is fast ball

    Duane asking good questions

    Davy Jones, bit ran out, had to run a casing log sounds like a month or 2

  57. 57
    bill Says:

    Correction on production

    said they did 19 last night

  58. 58
    BirdsofpreyRcool Says:

    thx bill… Duane gets it. Will forward his comments when i get them.

  59. 59
    choices Says:

    http://quotes.barchart.com/quote.asp?sym=dxz9

    http://www.nowandfutures.com/current.html

    Baylor, these sites may help-first site has futures and charts in upper left corner

    Second site has other commods as well as DX index.

  60. 60
    baylor3217 Says:

    Thoughts on ATPG on this recent pullback?

    Second time at or just below it’s low after the secondary.

  61. 61
    baylor3217 Says:

    Thanks Choices, I was looking for the dxy index and couldn’t get the ticker right in yahoo

  62. 62
    VTZ Says:

    gold flying… looking to make a new high.

  63. 63
    bloodystupidjohnson Says:

    Z, I know you are busy, but my mention of XCO (as a stock purchase not an option) question is based on the fact that the transforming moves they made a few months ago, the stock is almost back to the price they where at before the announcements.

  64. 64
    baylor3217 Says:

    I’m surprised the BRK deal isn’t having more of an affect on the coal stocks. Dollar seems to reign supreme at the moment.

  65. 65
    VTZ Says:

    Straight line up now to new highs.

  66. 66
    zman Says:

    APC call going well, sounds like 3 to 4 more months before they decide what to do off Sierra Leone. Either appraise the discovery at Venus or drill a new prospect…waiting on the seismic now.

    In the Gulf of Mexico, they did say the original producers at the Independence Hub (1 Bcfgpd capacity) in the deepwater are starting to decline. Had been running at 0.9 Bcfgpd this year prior to maintenance. Now running 0.7 Bcfgpd and they see it staying there for some time. That’s 1.4 Bcf per week not coming to market or like 10 average IPs in the Haynesville. Not a real big deal but everything helps with declines.

  67. 67
    oklahoma Says:

    dollar looks like it is giving it up…for now bring on the green

  68. 68
    zman Says:

    BSJ – I like it for the long term, I bought some options back around that deal and it ran afterwards. As a stock I just don’t have room for it in the portfolio right now and haven’t given it a lot of thought. Will do.

  69. 69
    zman Says:

    APC call went very well. Most of the call was covered by the 17 page ops update. They are going to get shalier in the States. They, unlike CHK are more cautious on natural gas prices going forward. They said they won’t just drill their hedges but will look at the cash price of gas before bumping drilling much more than they have. Didn’t have a lot to say on the Marcellus or E.F.S. but they will be ramping in both.

  70. 70
    zman Says:

    Baylor – The only thing holding me back there is their call and this market.

    Oklahoma – agreed with bring on the green, dollar still pretty high on the day though.

    BEXP through $10. I think that has a good shot at running higher through earnings.

    Crude just jumped positive without the market and without help from the dollar. Interesting.

    NG up a dime plus.

  71. 71
    BossmanG Says:

    Z, do you have any comments on HK?

  72. 72
    BirdsofpreyRcool Says:

    The elections being held today… I think if you see a move toward “fiscal conservative candidates” winning, mrkt will pick up the rally again tomorrow. Ahead of Friday’s Jobs Number.

  73. 73
    zman Says:

    Bossman – How much do you want?

  74. 74
    VTZ Says:

    1080 gold on the dollar weakness.

  75. 75
    BossmanG Says:

    Just about expectations on earnings this week, any sort of updates they might give that market will like?

  76. 76
    baylor3217 Says:

    Z, 70, holding you back where?

  77. 77
    oklahoma Says:

    z- it just seems to me that the heavier weight to the energy complex for right now is the dollar. Although earnings ar heavier weighted at times and the underlying commodity brings its weight the dollar is “married” to the performance of the complex currently. It will decouple at some point but until we get the weaker dollar to I think the other elements are limited. Would you agree? I guess Israel bombing Iran would be a game changer

  78. 78
    zman Says:

    HK

    – good chance they beat on 3Q volumes.

    – either way they will be able to say they topped 0.5 Bcfepd for the first time, up huge (like 60%) from 3Q08 levels.

    – probably a reiteration of the 30 to 40% growth in 2010 they’ve already talked about.

    – Everyone expects bigger wells from them in the Eagle Ford….would seem likely as they announced that JV with SFY that they have more reasons to go after acreage that way due to better returns.

    – Probably some Haynesville wells, look for drilling time to have fallen again and well costs to be down again. CHK saying some at $6mm now, last HK said was $8.5 mm.

    – Budget to stay largely the same.

    – NO DEAL

  79. 79
    zman Says:

    Baylor – Holding me back on ATPG, I later guessed you were asking Bill, not me.

  80. 80
    bloodystupidjohnson Says:

    Gee, this is a change, the Dow is down and most E&P are up. Man what is the world coming too?

  81. 81
    zman Says:

    Oklahoma – I think the dollar weighs on the broad market and oil and this weighs on the group. You can watch a tick chart of the S&P and don’t have to know if your stocks are up or down at the moment. This is normally the case over time but at present, the stocks seem uncommonly/overly linked to whatever the S&P is doing and it is one jumpy index right now.

    I am pleased to see good news having some effect on stocks, unlike in many sell offs. It’s more fleeting than you want but its not totally ignored. See BEXP today. APC should be doing better, in my way of looking at the world than it is at present.

    FST – those were big wells for them; I think the Granite Wash 30 MMcfepd well was the biggest announced to date. Will be an interesting call.

    Wow, even SD is moving. BOP, I took some profits on KOG (1/5th) to swap into SD yesterday.

  82. 82
    bloodystupidjohnson Says:

    Z, what is your view on FST management. They have always gave me the impression they are like the gang that could not shoot straight. They try but come up a dollar short. Sort of the my current Cleveland Browns.

  83. 83
    zman Says:

    BSJ – I think that’s SFY or maybe SGY, lol. On FST, good assets, I don’t know management, have heard much the same though. Right now they appear to be executing but it also appears from reading them back in time they could use some help in Street relations, from guidance to press release writing to presentations.

  84. 84
    kyleandy Says:

    bsj – that’s unfair to compare FST mgt w/ browns. nobody that bad – except my 0-7 bucs

  85. 85
    BirdsofpreyRcool Says:

    z — #81… KOG = always good to take profits. No push-back from me. Think KOG goes higher (especially as it remains an “acqtn target” and subject to rumors… which will eventually come true). But, there is so much cheap merchandise in energy these days, doesn’t hurt to jump around a bit.

    And take profits when you get them.

    Seems like this mrkt will give you a chance to put profits back to work on cheap buying days. Buy on down days, sell on up. Rinse, and repeat!

  86. 86
    bill Says:

    >Baylor – The only thing holding me back there is their call and this market.

    60 AND 70

    I concur with z comments

    I think the numbers will stink but i think mgt will put on a great show in cc (spin)

    the ceo can talk about the secondary,the paydown of debt, the covenant issue going away and the titan sail out happening.

    he will again talk about its oily assets and production doubling next year.

    Titan doesnt get hooked up until feb, so the money doesnt start flowing in until q2 and beyond

    The question is when do you want to jump in

    The market sucks and ep money seems to be flowing out of the sector

    Im bruised , battered and not sure i want to step in the ring again as im being counted out

    Probably means we go up soon

  87. 87
    zman Says:

    LINE reports tomorrow. Looking for solid numbers. Hints at upped dividend or the potential to if they find the right acquisition. Hints that they think people like CHK are insane not to hedge and that prices will remain low for a long time.

    Buffett calls $44 B “all in wager” on the economy.

    I see people saying they think the fed will tighten. Now that’s insane.

  88. 88
    bill Says:

    vq cc call on now

  89. 89
    zman Says:

    Thanks Bill, jumping on that one now.

  90. 90
    zman Says:

    Listening to the Q&A, missed the start, knew I missed a call I wanted to listen to today. My kingdom for someone to start a service to organize calls by sector for the industry so that they don’t get so stacked up.

  91. 91
    bill Says:

    chk without hedges is concerning

    Will Aubrey look like a genius

    Thinking out loud, they must be uncomfortable with level of hedges, the question is when would you pull the trigger with winter coming and perhaps another 914 report my show a dip

    Id might wait one more month to nibble at it or 7 bucks on the strip whichever comes first

  92. 92
    zman Says:

    Bill – CHK said they are good at hedging and the time isn’t right yet. Said they think there’s more to hedging than just going out and buying the hedge, said anyone can do that and many of their peers have. They said they think those guys are getting too low a price compared to what they can get. Also cast some dispersions, as usual on the 914 data. Said their model is better and that you will see the declines really show up in the 4Q (which means February for the 914 data) but that you are already seeing the declines in the weekly storage data. I think that’s part of what you are seeing there as we have seen smaller than expected end of season injections. But I think its also the physical amount of gas in storage that is suppressing injections. You see this every time we are high to average on peak injections. Anyway, Aubrey sounded more than a little confident that when he hedges it will be for higher prices and sounded very comfortable with the current level of hedges for what its worth.

  93. 93
    bloodystupidjohnson Says:

    CNBC rant: That windbag of windbags, Charlie Gasparino, has written a new book. So why whenever he comes on the any of the shows, must they hold up a copy of this book? Since he works for CNBC, is this in his contract?

  94. 94
    zman Says:

    BSJ – couldn’t agree more.

  95. 95
    VTZ Says:

    The idea that the Fed is goign to tighten is driving the strength in the dollar, the gold market knows otherwise.

    The verbage around tightening will be the key tomorrow. Both the dollar and gold are set up right at a place where they will make a big move if the Fed does not change the wording around tightening.

  96. 96
    bloodystupidjohnson Says:

    I feel a little more confident in CHK hedging if it was not for that knock out hedging fiasco awhile back.

  97. 97
    zman Says:

    Hearing Simmons liked the SM call, recommended buying on weakness.

  98. 98
    zman Says:

    BSJ – funny how you don’t even hear the term or the questions about it any more. I had almost purged that from my memory.

  99. 99
    zman Says:

    Energy seems to want to be strong here. If market goes green could be a turn in the group. Definitely has a different feel from the last 10 or 12 trading days.

  100. 100
    zman Says:

    WRES on the tape reaffirming borrowing base. Says it will resume drilling in 2010. Earnings out tomorrow for tomorrow’s call. They need to get their IR act together.

  101. 101
    zman Says:

    BBG call about to start, just keeping up with this Rockies gas producer, stock down on the numbers.

  102. 102
    West Says:

    Thx BOP & Z, Interesting link with some good information……http://www.apers.org/Inv%20Retreat%2020/All%20PDFS/CastleArk.pdf

  103. 103
    zman Says:

    BBG call – good call, bad numbers. Stock off, guidance going up slightly. They did mention that they see Rockies basis staying small for the foreseeable future. Costs coming down. Will be working something up here as this should be another good gas proxy trader.

  104. 104
    zman Says:

    Hey, even FST waking up. Was somewhat concerned that the market would only see the miss and not the ops update. Same thing may be happening with BBG now.

  105. 105
    zman Says:

    Crude back above $79. Strange action today, almost feels like its following gold higher.

  106. 106
    VTZ Says:

    Does anybody think they are going to change the wording on “extended period” of low rates tomorrow?

  107. 107
    BirdsofpreyRcool Says:

    VTZ — #106 I just don’t think “inflation” is an issue, on the foreseeable horizon. Based on that, don’t see why they would change the wording. That’s my take, anyway.

  108. 108
    VTZ Says:

    RE 105 – I don’t think people believe the move in the dollar as shown my gold.

  109. 109
    VTZ Says:

    Gold is actually trickling up higher again now… 1082

  110. 110
    zman Says:

    V – I’m torn on that. Think you have honed in on the issue of the day. Ben at a speech a couple of weeks bake jaw boned the dollar higher (to limited effect). Maybe he tries that more formally tomorrow. On the other hand, they’ve got to know how fragile the market is (and yeah, I do think they care about it) and that a weak dollar helps exports yada, yada, yada. So I’m torn. Anyone else, ELI, RMD, anyone?

  111. 111
    BirdsofpreyRcool Says:

    addendum to #107… not all the Fed Governors are brilliant, tho… which is why the debt mrkt found itself standing on the lip of the Abyss, a yr ago. Too many of them were watching/worrying about the wrong stuff and missed the forest fire raging behind them.

  112. 112
    zman Says:

    BOP – remember when Ben could only see inflation everywhere though? The guy seems to see it everywhere.

    S&P a go, go now.

  113. 113
    zman Says:

    How I hope the shorts have taken the last 10 days to double and triple down.

  114. 114
    BirdsofpreyRcool Says:

    The Darkest Days of my life… Ben was convinced that energy prices meant inflation. They didn’t. He obsessed… and the debt market blew up.

  115. 115
    oklahoma Says:

    z-amen

  116. 116
    VTZ Says:

    If the USD closes back 76.40 I would say that’s bearish because it would mean that it rejected the break above the 50 day and the previous support/resistance level.

    I don’t think Ben WANTS to jawbone the dollar higher.

  117. 117
    VTZ Says:

    If Ben does say anything about raising rates I bet that:
    -Market tanks
    -Economy isn’t getting any better but right now people are using the stock market as an indicator for the economy, including people in government. So when the market gets worse…
    -They remove the statement next time and say things are worse than expected
    -Back to printing money

  118. 118
    VTZ Says:

    The bottom line is they are going to continue printing money either way, it’s Bernanke’s modus operandi. Now or later, take your pick. Based on what Ben has said all along about wanting to be sure that he doesn’t need more stimulus and about Japan ending too early (and that being the one mistake he doesn’t want to make), I’m going to go with printing now.

  119. 119
    zman Says:

    V – Agreed, they have no choice if they want to try and support it.

  120. 120
    VTZ Says:

    On the other hand, if you think that they WANT a reason to inject a LOT more stimulus, they might want to raise rates to teach everyone a lesson.

  121. 121
    zman Says:

    Popeye were you able to log in?

  122. 122
    zman Says:

    Grabbing some lunch, be back in 30 minutes for the FST call. Keep group up for me.

  123. 123
    1520sbroad Says:

    Way off topic – made me laugh – particularly just off a trip to the west coast.

    http://www.theonion.com/content/news/united_airlines_exploring

  124. 124
    zman Says:

    FST call about to start, stock toying with $20.

    BEXP up $1. About time.

  125. 125
    zman Says:

    FST Call

    Volumes bottomed in the 3rd quarter, now heading back up.

    Gas differentials continue to narrow (recurring theme of recent calls)

    $232 mm dollar debt reduction during the quarter. These guys are sticking to their guns on restoring their balance sheet.

    3Q should mark beginning of new organic growth upswing.

  126. 126
    VTZ Says:

    If USD closes here it’s toast.

  127. 127
    zman Says:

    FST saying rig count becoming less relevant in tracking production. Can’t really disagree, still worth watching rig count but its a loser connection to supply now.

    Comments on call kind of remind me of PXD last quarter. Talking about their production being down due to their voluntary lack of drilling. Now they are starting to ramp activity. PXD did that too to conserve capital, that stock got a good reception when they went back to the drill bit.

  128. 128
    RMD Says:

    #110: without a great deal of confidence, I think the dollar is bottoming for a while (1-2 quarters), which would lead to an unwinding of the carry trade dejour. Also suspect long rates are headed up so considering the TBT and various shorts.

  129. 129
    oklahoma Says:

    If you look at where we broke out on the USD on 10/23 around 75.61 it now looks like we have retraced about 50% from the 76.82 high.

  130. 130
    oklahoma Says:

    #126 hope its burned toast

  131. 131
    zman Says:

    FST

    7 miles from first well
    $6.5 mm well cost
    4,300 foot lateral
    30 MMcfepd, 66% liquids
    Second best IP in the play, one of the best onshore wells drilled, based on IRR, this year in the U.S.

    another well 10 days from frac
    another drilling

  132. 132
    zman Says:

    # 131 is the granite wash well.

    Makes one wonder about the 7 NFX wells that have been drilled but not yet reported. Recall the first 7 NFX Granite Wash wells had an average IP of 22 MMcfepd.

  133. 133
    VTZ Says:

    RE 128 – I agree that at some point the TBT is going to get annihilated, don’t know when.

    I disagree that this carry trade is going to be a carry trade du jour. It lasted 20 years in Japan and you could easily argue that the circumstances around the USD are worse.

  134. 134
    elijahwc Says:

    VTZ – “I don’t think Ben WANTS to jawbone the dollar higher.” I agree and hope they are judicious enough to leave the language alone. There is no exit strategy and accordingly I’m long CEF, FCX, GDX, EGO & AEM and now you know why a generalist snoops in on this forum for his energy ideas. As another occasional contributor here has said, “now that I’ve been kind enough to do your homework for you”.

  135. 135
    jiveyjr Says:

    re: 128..I lost a bundle on TBT so much I had to give up. What I failed to understand is how big the banks excess reserves are and how much of them is being put into treasuries by the banks….once the banks prefer lending to buying treasuries then it will be a good trade, imho…but I think it is perhaps still too soon

  136. 136
    VTZ Says:

    As soon as they start raising rates the TBT is money because you won’t be able to make such a massive spread between the short and long end. It should make the long end less attractive. That and the dollar.

  137. 137
    bill Says:

    useg up 20 %

    I dont know if they are in the new bexp well but the stock is acting like it is

  138. 138
    zman Says:

    Bill – I was told they are, don’t know if they are in the next two or not that will be completed later this month.

  139. 139
    bill Says:

    i guess they are

    http://finance.yahoo.com/news/US-Energy-Corp-Announces-pz-1201271334.html?x=0&.v=1

    nice stock that jumps 20 % with every positve well result, lol

    i dont own any as i sold it on its last run up

  140. 140
    zman Says:

    FST call over, good call, on the granite wash they are being cagey about talking about which zone they went after (there are 7), two more wells in the near future it seems, maybe results on one before year end but I bet they save it for the 4Q call.

  141. 141
    VTZ Says:

    http://www.sprott.com/Docs/MarketsataGlance/MAAG_10_2009.pdf

    Eric Sprott worth a read.

  142. 142
    zman Says:

    Going to get on the SM replay now.

  143. 143
    zman Says:

    Nutbag watch:

    http://news.yahoo.com/s/ap/20091103/ap_on_re_as/as_koreas_nuclear

  144. 144
    RMD Says:

    VTZ and jive; yes and yes, I agree. To some extent it just feels like the dollar is down enough to rally here. Here is an old BOP link on bank reserves; thanks BOP.

    http://www.capmarkets.com/ViewFile.asp?ID1=315055&ID2=335422337&ssid=2&directory=11608&bm=0&filename=This_Is_Just_Like_The_Credit_Bull_Markets_Of_91-00_And_03-07_10-6-09.pdf

  145. 145
    bill Says:

    chk aubrey spent time to talk about them buying and fliping acreage and feels its overlooked ie (asset monetization)

    maybe his rationalition of them still making new investments

    Also, talked about hedging startegy…I had missed the call earlier

  146. 146
    zman Says:

    LINE reporting for its call tomorrow, stock hitting its annual high today.

  147. 147
    john11 Says:

    Btw..LINE is also ex-dividend tomorrow.

  148. 148
    zman Says:

    John – right, I’ve no plans to trade it, I just hold it and get paid to do so. It’s tough work but someone’s got to do it.

  149. 149
    BirdsofpreyRcool Says:

    so… what’s HeadTrader saying in here?? Glad you asked… here’s what he just sent me. A little Trading Desk humor…

    Pit is very slow and telling jokes.

    Whoop here it is….. I’m not as concerned about swine flu as I am the Chinese calendar. 3 years ago, the Chinese calendar was the year of the cow. We had Mad Cow disease. 2 years ago, the Chinese calendar was the year of the bird. We had Avian flu. This year, the Chinese calendar is year of the pig We have Swine flu.

    Next year is the year of the rooster.

  150. 150
    zman Says:

    SM – couldn’t test their Marcellus well due to an endangered snake.

  151. 151
    zman Says:

    BOP = so glad to have you back.

  152. 152
    reefguy Says:

    150- I believe that is Chuckus shumeroski. He is an endangered snakel

  153. 153
    zman Says:

    SM getting a little more interesting around year end, couple of first Bakken wells due, Marcellus well data due, and more Eagle Ford data.

    Reef – glad to hear he’s on the list. Did you listen to EXXI?

  154. 154
    zman Says:

    Anyone see a reporting date for GMXR?

    Also, will someone please post API after the close? Thanks much.

  155. 155
    Alhambra Says:

    a bit off and don’t mean this to scare but fyi – my doctor buddy saw two people die last week from swine flu (after battling pneumonia in the ICU), ages 25 and 36. He said the younger generation seems less adept at fighting it compared to older generations; somehow youngins have never been exposed to anything like it before, whereas people 40+ seem to have better defense

  156. 156
    reefguy Says:

    Missed, but transcript confirms thoughts on Davy Jones…

  157. 157
    zman Says:

    Reef – on a different topic, any insight on BB Hill?

  158. 158
    reefguy Says:

    Jim Bob is over in Fort Worth today, He is not being as jovial, waiting on logs at BB

  159. 159
    BirdsofpreyRcool Says:

    reef — is that 1st B for “Black” or “Blue”?

  160. 160
    BirdsofpreyRcool Says:

    IBM sold 2 yr notes today at only 4 bps over LIBOR.

    People, that is FREE MONEY!! LIBOR is .278… so IBM borrowed for 2 yrs at 0.32% interest. (NB: it’s tied to LIBOR, so it’s floating rate… but still…)

    P&G, on the other hand, had to pay a whopping 1.35% to get their 2-yr money.

    This is why monetary policy works to (eventually) help turn a recession around.

  161. 161
    jat Says:

    APIS

    Crude: 3.2mn barrel draw. Refinery utilization down to 81% from 82$; imports drop 156kpd WoW.

    Gasoline: Build .5mn barrels.

    Distill. Fuels: Build 1.7mn barrels.

  162. 162
    PackMan Says:

    BOP; and when rates finally do go up; it will be good night Irene for EPS as companies will get toasted on borrowing costs.

  163. 163
    BirdsofpreyRcool Says:

    PackMan — I’ve seen this cycle now, several times. Some companies — the ones who take on too much floating rate debt at what is a great level at the time — will get toasted. You’re right. But, you also have to average out the interest rate over the life of the bond + view the debt as a type of “balance sheet / income statement hedge.”

    Take IBM, first of all, it’s only 2 yrs… 2ndly, interest rates will stay low until the economy improves… so, right now, IBM’s business level of activity is lower and it’s good to have lower interest expense (b/c IBM also has lower income). Even if business activity activity picks up a lot, before the bonds mature, the higher interest rate will be met with (presumably) more business activity (cash flow and expanded margins). Also, the AVERAGE interest rate over the life of the bond may turn out to be better than issuing a straight, 2 yr bond, like P&G did. Even if picking a floating rate bond (over a fixed rate one), turns out to be a bad idea, IBM will be in a better place to be able to make higher interest payments.

    So, issue 2-yr, floating-rate debt at 0.32% and take the risk that it will go up (knowing it will) at some point…. or issue fixed-rate debt for 2 yrs at 1.35%. If you do the math, LIBOR+4bps will probably end up being lower overall, than fixed debt, over the next two years.

    Where IBM would get royally screwed, is if interest rates skyrocket and business activity stays low. “Stagflation.” That is about the worst corner a country can back itself into. Let us “hope” we don’t go there….

  164. 164
    VTZ Says:

    I thought we were almost there already

  165. 165
    BirdsofpreyRcool Says:

    Following is (in my opinion) A Very Good Commentary on where we are, what we are watching, and what many of us missed today. I said this morning (offline in a pre-mrkt comment to z) that Buffett was a tad early with his investment in GS… but he was right; ignore his actions today and you will miss out on a great opportunity to make money.

    The mantle of (market) leadership has passed from the financials (who are no longer leading, but will still rally with the market) to the cyclicals. This is GREAT news for us energy investors. Do not underestimate the significance of what happened today… and read this summary by a strategist at an institutional-only broker dealer. It’s a good read.

    ======================================

    If you give them a trend, they will trade it.
    They will trade it over, and over and over, until it is taken to an extreme and finally implodes. In the market, perception is reality, and when a catalyst has worked for an extended time, it is believed to be the dominant catalyst trumping all others. That is usually the pinnacle of the correlation and investors should be looking elsewhere or even preparing for the relationship to reverse. We love a good market pattern just as much as the next market watcher. It makes things easier to discern, but when it gets too easy, you have a problem.

    Market Myopia
    As you might have guessed, we are referring to the uber-catalyst du jour, the Dollar. This morning, investors woke up to the greatest investor of the past half century placing the biggest bet of his career. Was it received with fanfare? Not really. The media liked the story, but we have also seen them pay more attention to the annual lunch that Buffett auctions off for charity. The acquisition could not even get the S&P futures into positive territory.
    Futures were too busy doing their daily dance with the dollar. For the past 30 trading days, the Dollar Index has
    hovered on either side of the 76 level. It has been in a 3% range over that time period. One can simply look at the chart showing the Dollar Index’s historical volatility over the past year and see the manner in which it has declined as the Dollar has settled into its pre-Lehman levels.

    As we noted last night, we can understand investor jitters as everyone believes this to be the long awaited correction following the S&P 500’s 65% rally from the March low. We would also note this high level of jitters is a positive, because it is keeping the bulls honest and testing their conviction. The action certainly is not that which is consistent with signs of “irrational exuberance” and “bubbles” that are often used to characterize the current environment. In the same respect, disregarding Buffet putting his money where his mouth is in order to take signals from a currency that has gone nowhere for a month and a half, certainly does not seem like investing. It does seem like a recipe for whipping oneself around and running up commissions.

    Buffett is not a market timer, but this is as good as it gets.
    Since Buffett’s NY Times Op-Ed in the Fall of last year failed to provide the instant gratification investors want today, and resulted in some real intermediate term pain, the market under-reacted to today’s news. The interesting aspect about Buffet’s move is that Buffett and Berkshire, while pushing the theme that the time is right to invest for the long term, have been very staid with their comments regarding the economy. As recently as last week, David Sokol, who is widely viewed as Buffett’s heir apparent, was talking about how “they” still haven’t seen “Green Shoots.” They went from no Green Shoots last week to spending $33 Billion on a railroad this week. This is a far better signal for investors to receive from Buffett, than his NY Times Op-Ed. Aside from the fact that we are not in the midst of a financial meltdown, this is not Buffett’s personal pocket change. It is part of his legacy, which is a much bigger bet. Buffett is buying on the way up and of course, a railroad is in extricably linked to the economy.

  166. 166
    RMD Says:

    Thoughtful piece, BOP. Thanks.

  167. 167
    proxy solicitation calls Says:

    corporate proxy solicitation rules would apply to which of the following

    Tuesday Morning – Lots of Earnings | Zman

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