Thursday, January 2, 2020

Off The Net -- Traveling -- January 2, 2020

I won't get to comments, e-mail, news, etc., today like I usually do. Maybe every couple of hours a quick look at the news when we stop for coffee.

South of Ft Worth right now; on our way to south Texas.

I'm curious to see what north side of San Antonio looks like after all these years.


Iran: "He can't do a damn thing."
Trump: "Here, hold my sugary drink."

Notes From All Over, Part 2 -- January 2, 2020

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.

  • May, 2018: $188/share
  • January, 2020: $$295/sahre
  • P/E then: about 18 if I recall
  • P/E now: about 25
  • Amazon's P/E: at $1,867/share, a P/E of about 80 -- yeah, no kidding, a P/E of 80
  • FB? at $206, a P/E of over 30
  • TSLA: well, one needs an "E" greater than zero to have a "P/E"; LOL 
  • so, if the shares are selling for $300 and the P/E is 25, that suggests earnings of $12/share
  • Paul Meeks, tech analyst, says AAPL, based on his model, is worth about $170
  • so, we'll see

Notes From All Over, Part 1 -- January 2, 2020

Market, early morning, first trading day of the new year.
  • Dow futures up 151 points (6:09 a.m. CT, January 2, 2020)
  • NASDAQ: could open up 57 points
  • S&P 500: could open up 16 points
  • AAPL: up $2.19; could open above $295; P/E of almost 25
  • EW: down $2.18
  • T: up half a percent
What's going on? Actually quite a lot. We've discussed sixteen reasons in the past. But today's story line: "China stimulated its economy." Huge headline but if that's all it takes to move the Dow almost 200 points, I must be missing something. China simply cut the amount of money banks would be required to have on hand, starting this week. I assume the fact that we don't have Iranian-held US hostages in Iraq and that the "protest" ended in less than 48 hours had some effect. The NY Times called the Iranian-backed militia, "mourners," and the WSJ called them "protesters." Someone noted that the attack on Fort Sumter, back in 1861, by the South Carolina militia, using the same analogy, was simply a "protest movement." 

By the way, is it "protestors" or "protesters"? Answer here.  Or here.
Disclaimer: this is not an investment site.  Do not make any investment, financial, career, travel, job, or relationship decisions based on what you read here or think you may have read here.

Bowl games: other than for the schools themselves, the college bowl games seemed to have lost all relevancy now that we have the championship playoff system. I noted that about a year ago but had not heard that view expressed elsewhere (I'm sure it had; I just missed it). But last night after the close game at the Rose Bowl -- Oregon, 28 - Wisconsin, 27 -- one of the presenters even mentioned it -- that folks no longer consider the bowl games relevant. He suggested that doesn't mean the games are any less exciting. But there's a difference between "relevancy" and "exciting." Was is a mistake for college football to go the route of the NFL with a championship playoff format? I don't know, but growing up in Williston, ND, I always looked forward to the final AP rankings after the bowl games were played. The rankings always provided several days of discussion. Now we go through the motion of playing the bowl games -- perhaps to fill the void until the championship games some two weeks into the new year.

Transition: recent chatter about the irrelevancy of the aircraft carrier in the 21st century. Maybe, maybe not. Depends. Probably not particularly cost effective. Maybe the answer is just fewer carrier groups. I don't know. But there may be a shift. I completely missed this story back on December 3, 2019, but came across it in the process of looking for something else. This was completely off my radar scope and the fact I didn't see widespread coverage, it makes me think a lot of folks missed it. The data points are staggering:
  • early in December, 2019, the US Navy awarded its most expensive shipbuilding contract ever 
  • $22.2 billion
  • "massive contract"
  • nine nuclear-powered Virginia class attack submarines
  • said to be in response to China's nuclear submarine buildup
  • Virginia class submarines
  • 18 already in the fleet
  • another 10 in various stages of construction
  • the 9 new subs: substantial upgrades
  • option for a 10th submarine; would bring final contract to $24 billion
  • bigger, longer, heavier
  • 40 Tomahawk cruise missiles vs current 12 on the current ships
  • wow, that needs repeating -- from 12 to 40 Tomahawk cruise missiles on each submarine
  • can generate their own water, oxygen; can stay submerged for months at a time
  • prime contractor: General Dynamics Electric Boat, Groton, CT
  • subcontractor: Huntington Ingalls Industries
  • would ensure a stable workload for the 4,000 workers at an Electric Boat shipyard in Rhode Island for years to come
  • scheduled for delivery between 2025 and 2029 

Five Wells Should Come Off Confidential List Today -- NGLs Come To The Rescue In The Bakken -- RBN Energy -- January 2, 2020

China-US trade war: now that it appears to be coming to an end, CNBC wraps it up in six charts 

Recession-proof? Is Goldman Sachs suggesting that the economy is nearly recession-proof? Again, from CNBC.

Economic expansion could continue for years

Boom! Shanghai stocks pop on the first day of trading in 2020.

US Navy: orders $22 billion worth of new submarines.

US natural gas reserves:

Back to the Bakken

Active rigs:

Active Rigs5566523960

Wells coming off confidential list today:

Thursday, January 2, 2019: 5 for the month; 5 for the quarter; 5 for the year:
35781, conf, Hess, EN-Farhart-156-93-0409H-5,
34384, conf, BR, Veeder 3A MBH, 

Wednesday, January 1, 2019: 3 for the month; 3 for the quarter; 3 for the year:
35877, conf, Whiting, Domaskin31-20HU, 
35876, conf, Whiting, Domaskin 24-17TFHU,
35571, conf, Whiting, Anderson 41-7TFH,

RBN Energy: top 10 RBN Energy prognostications for 2020. Archived.
Negative Permian gas prices. Wall Street sours on all things energy. E&Ps and midstreamers forced by capital markets to tighten their belts. Infrastructure coming online just as production growth is slowing. Oil, gas and NGLs totally dependent on export markets to balance. The list goes on. Just as producers and midstreamers came to terms with a new normal for oil and gas prices, this new round of challenges hit the market in 2019. And it is going to get a lot more complicated as we enter the new decade. There is just no way to predict what is going to happen next, right? Nah. All we need to do is stick our collective RBN necks out one more time, peer into our crystal ball, and see what 2020 has in store for us.
RBN posted ten.

Here is #4:
NGLs are coming to the rescue in the Bakken. The past couple of years have been difficult for Bakken producers. Crude prices are down and the economics of drilling and completion are tough to make work outside the four “core” counties in North Dakota. And in those counties, producers have faced a shortfall in natural gas processing and NGL takeaway capacity, which has resulted in more flaring and fewer well completions. But relief has arrived!
[ONEOK's new Elk Creek NGL pipeline is archived here.] New processing plants are coming online and ONEOK’s new Elk Creek y-grade pipeline has just started up — it should resolve the y-grade takeaway issue for a long time to come. Also, by allowing additional ethane to be recovered rather than rejected into the gas stream, the new facilities will also reduce the Btu content for gas flowing into Northern Border, the largest gas takeaway pipe out of the Bakken. Northern Border has been struggling with Btu content issues and is reported to be considering a new, tight Btu spec. All in all, it is a good-news story for the Bakken.