ISO NE: link here.
- demand, unremarkable: 11,819 MW
- marginal fuel: natural gas
- renewables: 8%
- wind: 35% of renewables
- hydro: 14%
- price: yellow, 6th decile, $120 / MWh
Saturday, May 7, 2022
The Price They Pay For Natural Gas -- May 7, 2022
CVX — May 7, 2022
CVX: look at the 5-day.
Barron's estimates Warren Buffett holds 160 million shares of CVX.
- Monday, May 2, 2022: $155 / share
- Friday, May 6, 2022: $171 / share
- = (171 - 155) * 160 million = 2,560 million - $2.56 billion in one week
- plus the dividends
Note: I often make simple arithmetic errors. I often misread things.
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The Movie Page
Farewell, My Lovely.
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The Kentucky Derby Page
Huge upset. It will be reviewed. 80 - 1. The team is all wearing red baseball caps. The aerial replay reveals how incredible this horse really is or how incredible the jockey is.
This horse was not even expected to run.
Unrestricted capacity; no masks. After two years.
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Twitter
Putin's War -- May 7, 2022
Two observations up for debate coming out of Putin's War:
- this is not temporary. The sanctions will be around for a long, long time; and,
- will hasten "energy transition."
Link here. Hungary and Slovakia get two years to comply with sanctions. Two years.
Russia, post Putin's War
- The war: a race against time.
- Russian economy will implode summer of 2022.
- Inevitable decline of its oil industry.
- Putin's War will set back Russia fifty years.
Boeing Announces It Will Leave Chicago And Illinois -- A Double Whammy -- May 7, 2022
For investors, this past week, in a note to a reader:
There are a lot of scary charts out.What is most interesting, some blue chip, value, Fortune 500 companies took the same hit in 1Q22 as did ARKK. I think that's the bigger story.Another big story is Boeing moving out of Chicago.
In some ways, I think the Boeing story might be the biggest business story of the week.
Two surprises.
One: Boeing moved out of Chicago.
Two: Boeing moved to the wrong Arlington.
- Arlington, VA: a suburb of Washington (DC)
- Arlington, TX: a suburb of Dallas, TX
The move to Washington (DC) -- talk about a company now relying on government regulatory policies and hand-outs to survive.
From the linked article:
"Boeing’s decision to leave Illinois is incredibly disappointing -- every level of government in our state has worked to make Chicago and Illinois the perfect home for Boeing’s headquarters for the past 20 years,” U.S. Senator Dick Durbin of Illinois said. “We are working together to ensure Boeing leadership both understands how harmful this move will be and does everything possible to protect Illinois’s workers and jobs.”
[Threat in bold.]
Chicago has had other recent departures. United Airlines Holdings Inc. said in December that it will move as many as 1,300 workers from its Willis Tower headquarters to Arlington Heights, a suburb about 30 miles (48 kilometers) away that also is being considered by the Chicago Bears.
Chicago, the nation’s third-most populous city, has seen a rise in crime that prompted its richest resident, Citadel founder Ken Griffin, to say he’s likely to move his $38 billion hedge fund elsewhere. Chicago’s Magnificent Mile and State Street shopping districts, along with many restaurants in the downtown Loop, have yet to recover from the pandemic. Even the National Football League’s Bears franchise is considering an exit to the suburbs.
Disney needs to move its Florida theme park to Washington (DC).
Market Takeaway -- May 7, 2022
The takeaway from this past week based on two charts:
Wow, that market sell-off May 5 - 6, 2022, was just what we needed.
The charts:
Tesla
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EOG
Featured EV Of The Week -- Lucid -- May 7, 2022
Updates
May 7, 2022: another indication that "this" is not going to be easy. Link here. The share value of GM has dropped about as much as ARKK, and interestingly, money is continuing to flow into ARKK.
Original Post
A reader sent me this note.
Saudi Arabia will partner with Lucid to make luxury EV sedans for the ultra-rich.
Lucid is based in Mesa, AZ. The company says it will build a plant in the Saudi Arabia desert.
Market cap:
- GM: $57 billion
- F: $57 billion
- Stellantis: $43 billion
- Lucid: $30 billion -- 360 vehicles 1Q22
- Rivian: $25 billion
- Nikola: $2 billion -- has delivered eleven vehicles
Top ten owners of Lucid Group. Link here. And folks wonder who pays for all the anti-fracking lobbying.
News:
Chart:
Wager: Goldman Sachs --
- advised Prince Muhammad bin Salman on the partnership
- sold their shares to the prince on November 29, 2021
Other links:
- IBD: link here.
Lucid posted a far smaller-than-feared loss. Lucid stock rose as the EV startup reaffirmed its production target.
For Q1, Lucid posted nearly $58 million in revenue, driven by 360 EV deliveries during the quarter, the startup said in its late Thursday earnings release. That suggests a small ramp from 125 EV deliveries in Q4 2021 amid "global supply chain and logistics challenges, including Covid-related factory shutdowns in China," according to the company statement. Lucid began deliveries of the luxury Air electric sedan on Oct. 30 last year. Lucid reported 30,000 Air EV reservations as of May 5. That was up from 25,000 reservations in February and represents a total of $2.9 billion in potential sales.
One comment:
When multiple institutions own a stock, there's always a risk that they are in a "crowded trade."
When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth.
Think AAPL.
Takeaways from the past week regarding EVs:
- Short term, a lot of companies took a big hit investing in EVs (noteworth: F and AMZN). Ford shares went from $25 to $14.
- There's a reason companies are partnering in the EV business.
- Long term: this is going to be very expensive for EV companies going forward.
- EVs: luxury sedans for the ultra-rich.
- Investors: there is no need to rush in. If interested, buy a few shares every week.
- Saudi Arabia: Lucid. Jumping the shark.
- A big [fill in the blank] bank (Goldman Sachs) sold some [fill in the blank] (Saudi Arabia) their shares in Lucid; the former made a killing; the latter, killed. They just don't know it yet.
- We see this every time when there's an oil boom: Saudi Arabia spends money like a drunken [person]. No difference this time, spending $6 billion on Lucid when for that much money could have bought 10% of EOG. Or all of Nikola and Lordstown Motors.
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IPO Watch Next Week
- The biggest wildcard in the IPO market in the week ahead is the lockup expiration for Rivian Automotive.
- Close to 800M shares will be freed up to be sold by investors if they desire.
- That tally includes 100M shares of Rivian held by Ford (F) and 160M shares by Amazon (AMZN).
- The two companies own more than 28% of Rivian together and the fair market value of the electric vehicle maker is reported quarterly as part of their total profit or loss.
- In some cases, stocks rolling off a big IPO lockup rally over the following week with a major overhang removed.
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Tesla
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EOG