Tuesday, November 24, 2020

Notes From All Over -- The Early Evening Edition -- November 24, 2020

First things first. Futures don't mean anythings but after a 700-jump over two days, what do futures show this evening?

  • Dow: up another 100 points; later: up 133 points;
  • NASDAQ: up another 65 points; later: up 72 points;
  • S&P 500: up another 15 points; later, up 17 points;

US savings rates soaring; multiple sources; here's one --

  • folks not traveling; saving on air fare
  • folks not dining out;
  • parents of college students saving on room and board, as students stay at home;
  • New York white collar workers working from home; instead of an expensive lunch downtown, getting by on a frozen burrito from their freezer (me? I prefer tuna fish on white bread)

Buffett's company buybacks: what it means, Investopedia;

Investing in Disney: update, Investopedia;


Mark Perry: giving thanks for the magic of the marketplace, the invisible hand of strangers, and no turkey czars. 

No New Permits; CLR Reports Two DUCs -- November 24, 2020

Active rigs:

Active Rigs1457625337

No new permits.

Two producing wells (DUCs) reported as completed:

  • 36205, SI/A, CLR, Polk Federal 8-33H1, Banks, no production data,
  • 32415, SI/A, CLR, Polk Federal 4-33H1, Banks, no production data,

Five permit renewals:

  • Newfield (4): four Kestrel permits in McKenzie County;
  • Hunt Oil: one Palermo permit in Mountrail County;

Warpspeed? Nope, Now That The Election Is Over, It's Hyper-Warp Speed -- November 24, 2020

Now that the election is over: warpspeed becomes hyper-warpspeed --

  • vaccine sent to states for distribution
  • vaccine will provide lifelong vaccine protection
  • Regeneron cocktail is failsafe Plan B
  • herd immunity around the corner
  • unicorns will be the number one Christmas gift this year

Link here. And here.


BREAK -- BREAK -- BREAK -- 10:40 A.M. CT -- November 24, 2020

DOW JUST CROSSED 30,000 --  as soon as AAPL turned green -- Dow crossed 30,000.

I'm not watching CNBC -- I assume they all have their 30,000 - MAGA caps on. 

New number to watch: 30,116.

Tell me again why we "urgently need a new stimulus bill."

Original Post

Number to watch today: 30,000.

Hydrogen: the new boy on campus. I have added a new page at the top of the blog

AstraZeneca: vaccine initially reported about 60% effective; then went to 90% effective. But that's not the story: the real story was how the effectiveness jumped from 60% to 90%. But not only that, how did that happen. Fascinating story. Actually two stories. When I get caught up, I will post the two stories. 

Actually, I'm going to quit blogging for now. Too much happening. 

College football:

  • college "committee" of thirteen now meeting in my town, Grapevine, TX, to select teams and college bowl games;
  • and meeting in person, not via Zoom or Webex

The Market -- The 12th Hour -- November 24, 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.

Dow: up 435 points; trading at 30,026
NASDAQ: up 120 points -- holy mackerel, I had not seen that until now
S&P 500: up 53 points; the 10:1 ratio remains in play

IMUX: wow, down over 12%; down $2.40, trading at $17.47
AAPL: finally, in the green; I don't think folks are talking about the real story here -- why AAPL stumbled;

ENB: up 4%; over $31
EPD: up over 4%; over $20

BRK-B: finally showing life --- only after AAPL turned green -- up over $5/share -- could likely hit 52-week high today;

DFS: up almost 3.5%; gains almost $3/share today;

UNP: up over 1.5%; up over $3/share; 3 cents away from 52-week high

SRE: my favorite company, right now; well below it's 52-week high; up 1.5% today; up $2/share; trading at $133/share; I consider this a $124/share stock.

Corky's Cousin Piggy With Sophia
Corky Still Traveling

Reading Much Better Than I Ever Did At Same Age

There are many reasons why Sophia is reading at a much higher level than I did at her age, but one thing that has definitely propelled her further than anyone could have expected: adult "powerpoint" slides tasking her daily remote learning assignments. Those slides are meant for her adult mentor but when the adult mentor is not there, she has to read these very complicated slides for herself.

The second thing that has propelled her further than anyone could have expected: better teachers. Sophia's teachers are no longer satisfied with Sophia being able to read "at her level."

This is what her teachers demand of her:

  • "seed stories" that she must write herself; Sophia has written three stories so far this year
  • they stop her while reading and ask her to explain what she just read
  • an understanding of linguistics ("glued sounds" for example; something I had never heard of until working with Sophia and her reading")
  • break-out sessions in which a "reading teacher" meets with one to three students three times a week for 30 to 60 minutes

One Well Coming Off Confidential List -- Apparently Not Even Drilled Yet, Waiver -- November 24, 2020

Active rigs:

Active Rigs1457625337

One well coming off confidential list today -- Tuesday, November 24: 26 for the month; 50 for the quarter, 715 for the year

  • 32426, loc/NCW, BR, Cleetwood 21-27MBH-A, Elidah (NCW = not completed; waiver)

RBN Energy: could US propane demand plus exports drawn down inventories enough to spike prices?

Like everything else in 2020, the propane market has been exceedingly difficult to navigate. So far this year, we’ve seen Mont Belvieu propane prices down to 24 cents/gallon (c/gal) and up to 57 cents. Exports continue to increase, but stocks seem to be reasonably healthy, partly thanks to November so far being one of the warmest on record. Propane production was projected to dip in the fourth quarter but has held up pretty well. 
During the spring there was considerable concern about the possibility of a tight supply-demand situation this winter, but so far, market conditions seem relatively benign. Does that mean we are in the clear for winter 2020-21? 
Unfortunately, there may be a few gotchas still out there. As always, a lot depends on the weather. But there are other factors at work that could surprise us because some of the statistics we’ve relied on in the past to gauge what’s ahead are not what they used to be. In today’s blog, we begin a series looking at those factors.

Propane shortage, northern Michigan: Reuters, November 23, 2020. Line 5. Implications. 

Number To Watch Today: 29,934 — November 24, 2020

Later: 29,940 — 9:01 a.m. CT.


The next thing to watch? If AAPL turns green.

Later: 29,961 -- 9:33 a.m. CT.

AAPL remains in the red, down 0.32%. 

Let's see, 30,000 - 29,961 = 39 points.

Because of its 4 - 1 split earlier this, AAPL has a much smaller effect on the Dow. Prior to the split, AAPL was at the top of the list of those stock affecting the Dow. After the split, AAPL was expected to fall to 16th or 17th place.

 Later: AAPL just turned green. Up only 33 cents, but it's green. Whoo-hoo! 9:54 a.m. CT.

Notes From All Over -- The Early Morning Edition -- November 24, 2020

Iraq: cash-strapped. Seeks $2 billion up-front for crude oil contract. This will be behind a paywall, but the headline tells the story which will start to be re-told over the next few days.

South Dakota basketball tournament: cancels plans for fans. WSJ. Irony: sponsored/hosted by Sanford Health.

Echo: "Sidewalk" coming to this device. Apparently the "app" will download automatically on Echo devices later this year but one can disable the app at any time. From CNET, October 7, 2020. Amazon alerted me to this new feature in an e-mail received overnight. All of a sudden AWS has gotten my attention, especially after noting its record-setting chip. Posted yesterday.

Chinese flu:

  • damaged sense of smell; WSJ: absolutely fascinating; maybe more on this later;
  • herd immunity: people still don't get it; remove the outliers and the USA leads the world in Covid-19 penetration, and yet, the penetration in the US is still below 4%; herd immunity is said to require 70% (although I'm not so sure); one leading financial analyst says herd immunity won't be reached until 4Q21;

Warren Buffett: after the customary SEC-approved delay, Warren's 3Q20 purchases are starting to be reported; here's the first I found, in US News: eight stocks Warren Buffett just bought:

  • Abbvie
  • Merck & Co
  • Bristol-Myers Squibb Co
  • Snowflake: 2.2% ownership in this company; 6.1 million shares; currently worth about $1.6 billion
  • T-Mobile US: this is quite a story; #2 among US telecoms; and of the three, clearly in a league of its own;
  • Pfizer
  • Bank of America
  • General Motors: BRK holds 80 million shares of GM, currently worth $3.4 billion;

Biden's economy: could be huge, absolutely huge; already the Fed is telegraphing that there will be no rate hikes until late 2023, maybe 2024.

Green hydrogen, from SeekingAlpha. Disclaimer: SRE absolutely fascinates me. I am not adding to my current position any time soon.

  • Sempra Energy says its California utilities Southern California Gas and San Diego Gas & Electric are developing a program to use surplus renewable electricity generated in the middle of the day to produce green hydrogen that can be injected into the natural gas grid to help cut carbon emissions.
  • SoCalGas and SDG&E are planning multiple hydrogen blending projects throughout their respective service territories, with the first proposed project expected to blend hydrogen into an isolated section of primarily polyethylene plastic distribution system in SoCalGas' service territory; the initial hydrogen blend level is planned at 1% and may increase to as much as 20%. 
  • In addition to the hydrogen blending projects, SDG&E announced last month that it plans to pilot two hydrogen projects by 2022 as part its sustainability strategy to advance carbon neutrality.

Glued sounds: this is what Sophia, six-years-old, first grade is being taught -- 

  • Welded or Glued Sounds- these are sounds that when they are together they do not say their normal sounds, but rather create a slightly different sound. The welded sounds are the following: all, am, an, ang, ing, ong, ung, ank, ink, onk, unk.
  • At first I thought it was ridiculous, but it is amazing. It seemed this was linguistics for college students, but now I get it. Pretty impressive that teachers are teaching this to first graders.
  • which word does not belong in this group: bat, cat, fat, mat, fall -- if you "guess" correctly, you will understand the concept of "glued sounds"

Iraq and Russia: for the archives. Link to Simon Watkins. This will be an interesting story to re-visit after Biden has been president for a year or so. The tea leaves suggest "everything" will change in the Mideast under a new US administration. Should be fascinating to watch.

The Old Man Was Right: The IPO Was A Really, Really Bad Idea -- November 24, 2020

The old man: the king of Saudi Arabia. It's my understanding he was against this idea from the very beginning and only accepted it after imposing harsh conditions. Those harsh conditions are now costing the kingdom billions. At least that's my take.

Now, read what Simon Watkins has to say about the IPO.

Link here

The lede:

The initial public offering (IPO) of Saudi Aramco that was heralded by Crown Prince Mohammed bin Salman (MbS) as being a showcase flotation for raising massive new capital for the Kingdom and anchoring a major expansion of its international equities market presence has proven only to put Aramco into a debt spiral and highlighted a myriad of problems in Saudi Arabia to international investors. Now, Aramco is digging itself further into serious debt through bond issuances simply to pay for the huge dividend payments promised by MbS that were absolutely required to persuade anyone to buy into the omni-toxic IPO. At this rate, the debt taken on by Aramco and other Saudi bond offerings to pay for the dividends will be far more than the amount of money raised in the IPO. As a direct result of MbS deciding to go ahead with yet another oil price war at the same time as the COVID-19 pandemic was gathering pace and destroying demand for oil, Aramco’s finances have suffered a massive hit. For the first half of this year, the company saw a 50 percent plunge in net profit and at the beginning of this month, it reported another massive drop in profits of 44.6 percent for the third quarter, falling to SAR44.21 billion (US$11.79 billion) from SAR79.84 billion in the same period last year. On the other side of the balance sheet, though, is the stark fact that because the company’s IPO was so toxic on so many levels was that it was shunned by Western investors and had to be off-loaded to buyers who were either bullied or bribed into buying the stock Aramco is left having to pay massive guaranteed dividend payments for the foreseeable future to those shareholders. 

This huge guaranteed dividend payment of US$18.75 billion per quarter - US$75 billion for a full year – will have to be paid for through budget cuts over and above the US$15 billion in Aramco’s annual capital spending alluded to by Aramco’s chief executive officer, Amin Nasser, just after the first half profits figures were unveiled. This will take the total down from around US$40 billion to around US$25 billion. Further reports have stated that even this US$25 billion figure is set to be reduced by another US$5 billion, taking the total capital spending in this year from US$25 billion to US$20 billion. 

Whatever the cuts, it remains the case that the first two dividends together for the first two quarters of this year – US$37.5 billion – far outstripped Aramco’s total free cash flow of US$21.1 billion for the same period. The latest profits number for the third quarter, meanwhile, covers just 62.88 percent of the dividend payment, never mind any other expenses or investment for projects ongoing or planned that Aramco may have had in mind. To put this even more clearly: Aramco’s entire profit for the third quarter cannot even cover the dividend it owes for the same quarter, not even two-thirds of it!