Pages

Wednesday, November 23, 2022

Word For The Day: Drupe -- November 23, 2022

Nigeria, from Breitbart:

President Muhammadu Buhari of Nigeria announced on Tuesday [November 22, 2022] the discovery of a massive oil reserve in the north of the country that may hold over a billion barrels of crude.
Buhari said the Kolmani area in which the oil was found is estimated to hold over one billion barrels and another 500 billion cubic feet of natural gas.”

This discovery has been described as a massive untapped reserve.

Let's put that in perspective.

From The Oil & Gas Journal, December 17, 2021:

USGS reports that Williston basin’s Bakken and Three Forks formations within Montana and North Dakota include 4.3 billion bbl of unconventional oil and 4.9 tcf of unconventional natural gas, both reduced from its 2013 assessment.
The US Geological Survey (USGS) reports that Williston basin’s Bakken and Three Forks formations within Montana and North Dakota include 4.3 billion bbl of unconventional oil and 4.9 tcf of unconventional natural gas.
This assessment is for undiscovered, technically recoverable resources and updates a 2013 USGS assessment of Williston basin which found that undiscovered reserves totaled 7.4 billion bbl for Bakken and 6.7 tcf for Three Forks.
Since the 2013 assessment, more than 6,400 additional wells have been drilled in the Bakken formation, and about 4,100 wells have been drilled in the underlying Three Forks formation, resulting in both more production and more knowledge of the basin’s resources.
To date, more than 17,500 total wells have been drilled into Bakken and Three Forks formations, and about 4 billion bbl oil have been produced from these units.

The Bakken boom began in Montana in 2000 and in North Dakota in 2007.

******************************
Word for the day: drupe.

Link here.

The olive is a fruit from the olive tree, also known as Olea europaea. The parent family of this tree species is Oleaceae, which includes the flowering trees lilac, jasmine & forsythia.

The olive tree produces a type of fruit called a drupe. A drupe is a fruit with a fleshy outer part and a single, hard seed on the interior. Some other common drupes include peach, plum, cherry and mango.

Not all drupes are juicy and sweet right off the tree. The drupe classification also includes fruits like coffee and pistachio, both of which are cultivated primarily for their seeds.

*********************
The Archeology Page

From The New Yorker:

Around forty-three hundred years ago, in a region that we now call Iraq, a sculptor chiselled into a white limestone disk the image of a woman presiding over a temple ritual. She wears a long ceremonial robe and a headdress. There are two male attendants behind her, and one in front, pouring a libation on an altar. On the back of the disk, an inscription identifies her as Enheduanna, a high priestess and the daughter of King Sargon.

Some scholars believe that the priestess was also the world’s first recorded author.
A clay tablet preserves the words of a long narrative poem: “I took up my place in the sanctuary dwelling, / I was high priestess, I, Enheduanna.”
In Sumer, the ancient civilization of southern Mesopotamia where writing originated, texts were anonymous. If Enheduanna wrote those words, then she marks the beginning of authorship, the beginning of rhetoric, even the beginning of autobiography.
To put her precedence in perspective, she lived fifteen hundred years before Homer, seventeen hundred years before Sappho, and two thousand years before Aristotle, who is traditionally credited as the father of the rhetorical tradition.

A Thought Experiment From A Naive Capitalist -- November 23, 2022

On buying a house, these are my observations for folks in my socioeconomic demographic:

  • the price of the house is of little importance (don't take that out of context):
  • the house bought is based on the monthly outlay (principal, interest, insurance, property taxes, etc)

With "free money" or interest rates at zero percent:

  • folks will buy a $400,000 house for $600,000;

With "expensive money" or interest rates at twelve percent:

  • folks will buy a $600,000 house for $400,000.

Experts / realtors will tell folks to buy the "most" house they can afford

  • that they can afford = monthly cash outflow

Monthly cash outflow:

  • if folks think they can afford $3,000 / month, the realtor will convince the buyers they can come up with $4,000 / month
  • buyers will come up with $3,600 / month on their "back-of-the-envelope" budget
  • if they were able to budget $3,000 / month, they will do whatever it takes to come up with that extra $600 / month
  • buying a home becomes a way to force one to save

$600 / month =

  • $6 / day at Starbucks, five days a week, 20 days a month = $120
  • four nights / month out for dinner for a family of four, $100 x 4 = $400

The first two years will be incredibly tough, very painful for the family.

At the end of the first two years, the family will become used to meeting the monthly mortgage.

By the third year, the family may, in fact, have more disposable income than they did two years earlier

  • (pay raise; wife returns to work; second job; more overtime; bonuses; inheritance; family help; tax breaks with a big house)

Interest rates tend to cycle, fluctuate, change (not always, granted). 

If the family buys the $600,000-house for $400,000 with "expensive money" they will be in a very different place two years after they buy the house than if the family buys a $400,000-house for $600,000 with "free money.

Now, break, break. Where would you rather be two years from now: in a $400K house you bought for $600K with "free money" or in a $600K house you bought for $400K with "expensive money."

We're going to stop here and come back to this tomorrow. 

My thoughts may be very naive, but playing devil's advocate this is where I am right now in this thought experiment. 

I thought about this on November 5, 2022, just three weeks ago, and I posted a short note on the blog at the time.

Investing: best years of investing in front of us.

Consider the source, a goldbug, but I can't disagree. 

"Expect five years more of problematic inflation."

Two points:

  • the gap between investors and savers will widen immensely;
  • this year and next will be the best two years to buy a new house.

My thoughts have not changed. I think I'm right on this. It works in an interest rate environment between 0% and 6%. I'm not sure if it would work in a 14-percent environment like we had under the Carter administration.

This "thought experiment" came up again today with the release of the University of Michigan's monthly "Surveys of Consumers.

But for now, ask yourself where you would rather be in 2026:

  • owning a $400,000-house bought for $600,000 with "free money" in 2020 or,
  • owning a $600,000-house bought for $400,000 with "expensive money" in 2023 (or 2024)? 

If the "$400,000-house" and the "$600,000-house" analogy is confusing or doesn't make sense, substitute the phrase "the most house you can afford" for the dollar figure. 

And this whole thought experiment might not make any sense to anyone but me, but I'll come back to it tomorrow to see where my thinking is faulty. 

It should be fun.

Two New Permits, Thanksgiving Eve -- November 23, 2022

Active rigs: 39.

WTI: $77.39.

Natural gas: $7.337.

Two new permits, #39431 - #39432, inclusive:

  • Operator: Grayson Mill
  • Field: Spring Creek (McKenzie)
  • Spring Creek is a 4.5 section field one mile north of US Highway 85, about midway between Alexander and Arnegard. 
  • Comments:
    • Grayson Mill has permits for two Margaret wells, lot 4 section 5-150-100; 
      • one to be sited 289 FNL and 1065 FWL, and the other to be sited 319 FNL and 1063 FWL;

Dry hole:

  • 38364, dry, Petro-Hunt, Boss 154-99-18C-21-1HS, Stockyard Creek, Williams County; sounds like foreign object fell into hole while drilling; unable to fish out; elected to plug and abandon; sister well on 2-well pad: #23298
  • 23298, 1,352, Petro-Hunt, Boss 154-99-18C-17-4H, Stockyard Creek, t12/13; cum 210K 9/22; off line for a very short period back in September, 2021; producing about 1,000 bbls/month;

EIA's Weekly Petroleum Report -- November 23, 2022

Weekly Petroleum Report:

  • US crude oil inventories are only five percent below the five-year average; the average -- only five percent lower; should we be worried? Some would have us believe that we should.
  • for the archives, commercial crude oil inventories dropped 3.7 million bbls; perhaps due to increased refinery activity -- now running at an incredibly impressive 93.9% -- that's almost 94% or rounding up, we get 95%; awful close to 100% of their operable capacity?
  • still plenty of diesel / heating oil but we will focus on distillate products still being 13% below the five-year average;
  • propane, the other fuel farmers depend on? An incredible 10% above the five-year average; has the price of propane dropped proportionately? Oh, yeah, most recently $2.70 / gallon compared to $1.80 in 2019, just before the pandemic; crude oil at the time, under $60 / bbl;
  • jet fuel supplied: was down 2.4%

********************
Gasoline Demand

With regard to the EIA data below, from social media:

Gasoline demand:


Some readers will attribute the decreased demand to EV penetration. I don't.

Demand "destruction":
  • work from home "movement";
  • high cost of gasoline: US consumer has learned how to conserve.

Before I Step Away From The Keyboard, Let's Look At How Mainstream Media Spun The Most Recent Unemployment Claims Numbers -- November 23, 2022

Updates

Later, mostly from social media and/or links to mainstream media:


Original Post 

Headlines, first time unemployment claims:

  • "highest since August"
  • "sharp increase"
  • "claims surge"
  • "exceed forecast"

So, what were the numbers?

  • that sharp increase?
    • up 17,000 from 222,000 to 240,000 (source? CNN. Who does their math?)
  • exceed forecast?
    • forecast: 225,000
    • actual: 240,000
    • forecast practically on the mark, if you ask me
    • 350 million Americans and "actual" number was off by 15,000?
  • calendar?
    • since ....
    • since August 13, 2022 -- about three months ago
  • so, simply background noise?
  • or are the powers that be -- are they trying to put pressure on the Fed to pivot with claims of surging unemployment?

China -- Covid -- November 23, 2022

Before we get to China, let's go to Cincinnati:

  • in fact: decided on a "technicality" as it were -- the issue was considered moot by the court -- there was no federal money available, so there was no case. 
  • one justice recused himself from the case because the governor being sued was his father; can't make this stuff up.

Now, China, beyond hope without an effective vaccine:

Let's look at a few other countries, while we are at it.

Remember New Zealand? Closed their country for upwards of two years. No cases. Looked great. At some point the country would have to re-open. Now, one of the worse. Compare with Hong Kong (population: 7.5 million) and New Zealand (5 million):



 And then look at this. Per capita, New Zealand much worse than the USA for total cases, almost 400,000 cases / million (New Zealand) and 300,000 cases / million (USA).


Is New Zealand vaccinating? Yup. With the Pfizer vaccine and Novavax.

Absolutely fascinating. Fascinating.

China: four deaths / million population and they lock down the country. The US: 125 deaths each day from Covid-19 right now.

DE -- Wow, Wow, Wow -- November 23, 2022

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.

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them

Many thanks to the reader who recommended DE to me more than once, starting more than a year ago.

I assume the folks on CNBC will still be talking about GE and DIS.


Let's See If The "New" CEO Rolls Back Prices -- November 23, 2022

My hunch: no but I won't be unhappy if he does. There are probably ways to get a headline suggesting prices have been lowered but the fine print and additional details will remind folks how good Disney is at "working" price points.

For example: cut the price of the four-day pass so significantly it would make Mickey's head spin.

Link here.

*******************************
Great News

Even as a physician I was confused by the various pneumococcal vaccines and their recommended schedule. 

Medicare and Part D insurance plans will "cover" immunizations if recommended by various agencies. Without that recommendation, one must get a "prescription" from a provider that is covered by Medicare. At least something along that line: I don't know the details. 

But I have no need to visit a physician simply to get a prescription for an immunization, so this is great news

This recommendation was made in October, 2021, after consideration and debate during the height of Covid-19. My hunch is that this might have happened eventually, but the recommendation was expedited due to Covid-19, complications from Covid-19, and difficulty of patients getting appointments with physicians during the pandemic. 

Along with the pneumococcal vaccine and a tetanus shot -- once I get those in January, 2023 -- I will be the most vaccinated and "all caught up" since I left the military.  I will also be getting the second of the two-series "shingles vaccine."

I think Joe Biden was president during this time (need to fact-check).


In This Part Of The Country, Buc-ee's Is A Destination -- November 23, 2022

Link here.

Christmas shopping is a blast here, and, of course, that goes for shopping year-round also. Hard to find gifts, clever gifts, high-end gifts at reasonable prices, including jewelry and Montana Silversmiths.

Deere -- November 23, 2022

For the archives for the grandchildren. I assume some day, one of them may be curious what I was doing with regard to investing at this time of my life.

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.

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.

Screenshots:




My "new money allocation"

  • new purchases since this summer
  • all with new money; none from sales of any current holdings
    • with one exception: T
    • T was paying a huge dividend; shares were bought to "park" money until enough cash build to be able to buy DE and CAT
  • I have to thank a reader for encouraging me to do this -- having a plan, a very specific plan and sticking to it -- this is one of the reasons for posting this -- to let that reader what I've been up to
  • I have a 30-year horizon, so timing of the market is something I don't do
  • I invest during the first and third weeks of each month
  • lots of DE and CAT: entirely new positions in my portfolio
  • recommendations for AVGO, DE, and CAT came from different readers.

Date

Buffet like

Tech / beaten down infrastructure

Permian oil

mRNA

June 30, 2022

BRK-B

TSM

DVN



UNP

NVDA

EOG



SRE

AAPL

MPC



AAPL

TSM

DVN







July 30, 2022

BRK-B

TSM

DVN


GOOG split July 15,  2022

CAT

TSM

DVN



CAT

AVGO

EOG



DE

AVGO

EOG







August 30, 2022

DE

TSM

DVN



UNP

AVGO

EOG



DE

TSM

MPC



DE

TSM

DVN




 





 



September 30, 2022

 

AVGO




DE

 




UNP





 

 

DVN



 


EOG



 

 

ENB


October 10, 2022

 

 

 




 

DVN



UNP


 



PFE





DE






AVGO



10/18/2022



 



DE






AVGO






DVN







Add to early November investment







SCCO






DVN



 

 

 

PFE


AAPL

 

 


 





Mid-November 2022

DE





CAT

AVGO

EOG

PFE






Mid-November 2022, after AAPL Div






ABBV

TSM

EOG

 






End-of-November 





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.

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.  

MPC was something I would never considered without this plan. I'm still very cautious with refiners.