Author Topic: Best Ideas For 2019  (Read 18742 times)

SharperDingaan

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Re: Best Ideas For 2019
« Reply #20 on: December 26, 2018, 10:50:55 AM »
Heresy ... but pretty much any intermediate in the WCSB (WCP, OBE, PD, etc).
With pipeline/rail capacity coming back by 2019 year-end, it's pretty hard to see how some of these do not at least double.

SD

SD sorry for my ignorance but whatís the capacity thatís coming back?

Enbridge Line 3 replacement comes on-line at the end of 2019 (760,000 bpd), and the first of Alta's rail-car fleet starts arriving (120,000 bpd by mid-2020). The existing aged Line 3 does roughly 380,000 bpd. With 600,000 bpd of net new capacity becoming available, the current shut-in will end, differentials should further decline, and o/g properties currently listed for sale should start to move again. Then add to it that at current valuations it's far smarter for new money to simply buy P2P reserves at cents on the dollar, versus drill for them.

Yet the oil-patch isn't talking about it?
Our own view is that it's being 'squashed' until Alta's 2019 election gets going ;)   

https://ca.reuters.com/article/domesticNews/idCAKBN1O203A-OCADN
https://www.enbridge.com/projects-and-infrastructure/projects/line-3-replacement-program-us
https://www.mprnews.org/story/2018/11/19/line-3-oil-pipeline-moves-closer-to-construction-in-northern-minnesota

SD
« Last Edit: December 26, 2018, 01:56:47 PM by SharperDingaan »


petec

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Re: Best Ideas For 2019
« Reply #21 on: December 27, 2018, 08:58:43 AM »
Heresy ... but pretty much any intermediate in the WCSB (WCP, OBE, PD, etc).
With pipeline/rail capacity coming back by 2019 year-end, it's pretty hard to see how some of these do not at least double.

SD

SD sorry for my ignorance but whatís the capacity thatís coming back?

Enbridge Line 3 replacement comes on-line at the end of 2019 (760,000 bpd), and the first of Alta's rail-car fleet starts arriving (120,000 bpd by mid-2020). The existing aged Line 3 does roughly 380,000 bpd. With 600,000 bpd of net new capacity becoming available, the current shut-in will end, differentials should further decline, and o/g properties currently listed for sale should start to move again. Then add to it that at current valuations it's far smarter for new money to simply buy P2P reserves at cents on the dollar, versus drill for them.

Yet the oil-patch isn't talking about it?
Our own view is that it's being 'squashed' until Alta's 2019 election gets going ;)   

https://ca.reuters.com/article/domesticNews/idCAKBN1O203A-OCADN
https://www.enbridge.com/projects-and-infrastructure/projects/line-3-replacement-program-us
https://www.mprnews.org/story/2018/11/19/line-3-oil-pipeline-moves-closer-to-construction-in-northern-minnesota

SD

Thanks. Thatís all oil not gas, correct?

Aberhound

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Re: Best Ideas For 2019
« Reply #22 on: December 27, 2018, 11:42:50 AM »
Heresy ... but pretty much any intermediate in the WCSB (WCP, OBE, PD, etc).
With pipeline/rail capacity coming back by 2019 year-end, it's pretty hard to see how some of these do not at least double.

SD

SD sorry for my ignorance but whatís the capacity thatís coming back?

Enbridge Line 3 replacement comes on-line at the end of 2019 (760,000 bpd), and the first of Alta's rail-car fleet starts arriving (120,000 bpd by mid-2020). The existing aged Line 3 does roughly 380,000 bpd. With 600,000 bpd of net new capacity becoming available, the current shut-in will end, differentials should further decline, and o/g properties currently listed for sale should start to move again. Then add to it that at current valuations it's far smarter for new money to simply buy P2P reserves at cents on the dollar, versus drill for them.

Yet the oil-patch isn't talking about it?
Our own view is that it's being 'squashed' until Alta's 2019 election gets going ;)   

https://ca.reuters.com/article/domesticNews/idCAKBN1O203A-OCADN
https://www.enbridge.com/projects-and-infrastructure/projects/line-3-replacement-program-us
https://www.mprnews.org/story/2018/11/19/line-3-oil-pipeline-moves-closer-to-construction-in-northern-minnesota

SD

Sharper, is there any prospect of a tax or Federal ban or allocation regulations ie a forced auction of "air barrels", to force majors with an interest in low oil prices to increase the profitability of their refineries? Any info on the scale of that problem and whether the new capacity might result in more air not more oil shipped? Is there any hope of the Feds being nice enough to Russia to coax the Russians to license to Canadians their better catalysts for lightening heavy oil to make it easier to ship and refine in cold climates? As I doubt the Russians are the only ones with these catalysts any chance of these being developed here and brought to market or is the technology just being shelved? My ex-NASA friend living in Alaska tells me of massive recent oil finds in the North Slope. Any chance the Feds will leverage the US need for an oil pipeline to Alaska in exchange for pre-building now the links for these future lines from Alberta and Saskatchewan to the Gulf? Will the ding-dong feds help save the killer whales by shipping the Transmountain pipeline to Anacortes so the 145,000 bpd Shell refinery start using oil sands oil again instead of shipping it in from Alaska and also start shipping out the oil from Anacortes instead of Vancouver so less killer whales are impacted and so the bigger oil tankers can be used to better reduce the tanker miles which are impacting the killer whale populations? There has been no live births for the Southern resident killer whales for some years so extinction is imminent.Will the Feds lift the gag order on the Health Canada employees imposed by the Harper government in 2011 when the milk became sufficiently radioactive to start killing children? (I learned this as I happened to be defending a client selling humic and fulvic products both which help against radiation the former by protecting cells and the latter by helping the body transmute and eliminate the radio-nucleides and the two Health Canada employees sent to seize the products told my client that their job was testing the milk and the alarm went off in spring 2011 and repeatedly thereafter and they were gagged. Now if we could somehow figure out how to get these products into the killer whales, for instance by putting all the leaves gathered in Vancouver on land beside the Fraser river so they decay and release fulvic and humic into the river like used to happen when there were more trees right up to the waterline everywhere. Notice how the BC hospital statistics for newborn deaths became hard to get after 2011.

http://www.fossilfuelconnections.org/anacortes-oil/

My best ideas for 2019 is Lisbon real estate (focusing on buildings with fiber optic connections and lots of power) to take advantage of their being future Silk Road ports and the increased demand for data. Portugal will also get Irish corporate tax rates when Ireland joins the UK in Brexit.  I also think Central banks will cease to be independent very soon as the Leviathan State take them over to allow continued growth. Those Space forces are expensive much like the oil battleship construction expense pre-WW1. I think US will be rolling out their electro-gravitic technology so the transition will be expensive. Remember those $2B each B2 bombers? Lockheed Martin is how I am playing that bet. Any related suggestions are welcome. I am thinking Boeing but I am not sure if Boeing will finally be allowed to use their ion engines on their commercial jets. Paul Laviolette's book as available for loan on archive.org if anyone is sceptical about the technology.

Spekulatius

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Re: Best Ideas For 2019
« Reply #23 on: December 27, 2018, 01:42:25 PM »
My best value ideas (risk adjusted) are preferred and selected bonds. You can buy lower grade investment quality or high grade junk with good coverage and pot. forcredit upgrades with around 9% yield. Upside potential is about 20% plus whatever you earn in interest until they recover.
To be a realist, one has to believe in miracles.

thepupil

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Re: Best Ideas For 2019
« Reply #24 on: December 27, 2018, 01:51:03 PM »
My best value ideas (risk adjusted) are preferred and selected bonds. You can buy lower grade investment quality or high grade junk with good coverage and pot. forcredit upgrades with around 9% yield. Upside potential is about 20% plus whatever you earn in interest until they recover.
Which issuers/CUSIPs fit your description?

Gregmal

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Re: Best Ideas For 2019
« Reply #25 on: December 27, 2018, 01:55:05 PM »
Long time favorite MSG. Whether Silver Lake gets serious w/ Dolan or not, it won't matter. With split occurring and $1B cash heading to the entertainment company, this leaves the sports teams and other assets floating at about a $4B valuation. Which won't last long. $325(~7.5B total asset value) is probably my worst case y/e target.

shalab

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Re: Best Ideas For 2019
« Reply #26 on: December 27, 2018, 03:09:21 PM »
I would also consider PDH run by Sanjeev and MPIC funds. I think if Sanjeev writes more often about the business and the investment thesis, I am certain more people will consider it.

I'm still doing my DD on these companies, but given the massive losses they've taken in just the last 2 months, I think that US Natural Gas upstream producers are undervalued. I'm bullish on NatGas breaking out of its 2.50-3.00 long term range to $4+ in 2019 or 2020, which would be a significant tailwind for these companies. And right now most of them look as cheap as they've ever been.

Biglari Holdings (BH, BH/A) is currently trading at 0.7x book value, but owns close to 50% of its own shares, so its really closer to 0.35x book. Of course its trading down there because Sardar Biglari controls over 50% of the voting stock and I might be the only living person remaining that still believes he will deliver long term out-performance.

Still, the value of the shares are significantly less than the value of their CBRL stake, a stake Biglari has started monetizing over the past few weeks.

Note that Biglari has been buying BH and BH/A shares in his personal accounts recently.

wescobrk

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Re: Best Ideas For 2019
« Reply #27 on: December 27, 2018, 03:16:43 PM »
"Note that Biglari has been buying BH and BH/A shares in his personal accounts recentl"

Are you sure they are in his "personal" accounts? I thought the filing showed it was from Lion Fund 2 which is owned by BH shareholders.

SharperDingaan

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Re: Best Ideas For 2019
« Reply #28 on: December 27, 2018, 03:30:13 PM »
The 600,000 bpd is oil, not gas.

Like any miner, oil-sand profitability is primarily driven by through-put; to drive the fixed cost/unit down as low as possible. Hence the bigger you are the lower your cost/unit, and the more 'clout' you can apply over allocated pipeline space. If you also refine (IMO), whatever you 'lose' on the upstream you make back on the downstream refining. Your growing monopoly/oligopoly can be 'controlled' a number of different ways; but ultimately there will need to be a new 'arrangement' - once pipeline constraints ease.

There's lots of o/g in NA, and no need to develop the Alaskan North-Shore any time soon. Alberta bitumen will be pelletized and shipped west in open railcars well before Alaskan oil starts to flow. Japan and China also have material reserves of near-shore methyl-hydrates (substitute for natural gas), severely limiting what the North-Shore could export.
https://www.theglobeandmail.com/business/article-cn-pushes-ahead-with-puck-sized-bitumen-for-rail-transport/
https://www.scientificamerican.com/article/should-the-world-tap-undersea-methane-hydrates-for-energy/

Politicians will do whatever neccessary to get, & stay, elected - for the least amount of ongoing effort. Sadly, until the Alberta 2019 elections are over, we aren't likely to see any significant 'change on-the-ground'. Lots of kissing babies, and stealing lolly-pops, but no new pipeline construction.

Alberta has tremendous long-term opportunities, and the forced 're-set' has been a long time coming.
But it will be to Albertans to decide. Nothing wrong in that.

SD


« Last Edit: December 27, 2018, 03:34:26 PM by SharperDingaan »

rolling

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Re: Best Ideas For 2019
« Reply #29 on: December 28, 2018, 01:57:12 AM »


My best ideas for 2019 is Lisbon real estate (focusing on buildings with fiber optic connections and lots of power) to take advantage of their being future Silk Road ports and the increased demand for data. Portugal will also get Irish corporate tax rates when Ireland joins the UK in Brexit. 
Could you please explain better this point? I am portuguese and never heard anything of it (as far as I know Lisbon real estate is in a quite bubbly territory). Didn't understand also the irish part: maybe there is some irony in your post I didn't catch?
Thank you
My usual portfolio: Highly concentrated (up to 3 or 4 positions) in smallcaps and microcaps.