Stories We'll Be Tallking About Tomorrow -- And Through The First Half 2024 -- January 10, 2024

Locator: 46514COMMENTARY.

Maybe it's the unusually warm weather in January that has put me in such a good mood, or perhaps it's the fact that EPD has raised its quarterly dividend. I don't know, but wow, these big stories are breaking (or continuing). 

Let's run through some of them:

• the Mideast is becoming more chaotic, with the Houthis (and Iran) and Hezbollah on thin ice;
• Great Britain is losing its patience
• US Navy is waiting, planning, eager to launch
  
• Hezbollah seems unsure what to do next
• the de-industrialization of Germany
  
• the southern surge: 
• states as far away from Texas as Maine are starting to feel the pain of the southern surge
• Democrat power brokers are starting to get anxious:
• power brokers to include Obama, both Clintons (the Epstein files turned out to be one big nothing-burger), Newsom,
• speaking of Newsom, big money and big taxpayers continue to flee California
  
• US LNG exports
• the numbers now, and those projected through 2030, are staggering
• the "greens" will try to slow things down
  
• Ozempic could have major impact on all the existing weight-loss scams (not yet being reported)
  
• but scams with regard to Ozempic are already being reported
  
• Social Security:
• upper middle class recipients surprised by how much lower their monthly payments are this year due to higher income two years ago
  
• Warren Buffett will celebrate his 94th birthday on April 30, 2024
• still chairman and CEO of Berkshire Hathaway
• "bailing out" OXY and buying OXY shares on the open market are two different things
• Buffett started buying OXY shares on the open market in early 2022, according to reports; 
• see OXY ticker below
  
• dividends: 
• a fair number of publicly traded energy companies are ready to announce an increase in their next quarterly dividend based on their history of dividend announcements
• EPD was the first (though its dividend tends to change every quarter)
• big ones to watch: CVX; COP
  
•  Amazon: ad-supported juggernaut
• Nvidia: just won't quit
• Apple: how bad could it get?
• Kroger-Albertson's-Tom Thumb 

GDPNow's latest estimate for 4Q23, released today: 2.2, unchanged from previous estimate.

OXY ticker: 

There's A Reason It's Called Amazon -- January 10, 2024

Locator: 46513AMZN.

Updates

January 11, 2024: link here.

Earlier Stories

From an earlier post, I wrote:

Finally, Amazon. I won't invest in Amazon. I don't think Jeff Bezos cares about his shareholders. Jeff Bezos seems only to care about his customers. He keeps adding more "product" and seldom raises prices. Some of his "products" are a la carte and cost extra, and if his prices / subscriptions ever get too high, one can start cutting back on some of the extras. Prime Video is awesome. Comes with the basic subscription. A music subscription costs a bit extra. Alexa is awesome though I don't ask her much. Amazon now charges a bit if one wants to watch Amazon Prime Video without ads. For me that was a no-brainer. I forget the cost, a couple of dollars a month and no commercials. Thursday Night Football (NFL) and Amazon introduced technology not used by the networks to watch the games. Pharmacy. Whole Foods.

Amazon. The customer service on delivery is incredible. Knock on wood, we have never, ever missed / lost a delivery. I don't even track deliveries any more. If something doesn't come I won't care. I'm very serious about that. I'll simply re-order. Inexpensive orders are dropped off at the door 14/7 -- between eight a.m. and ten p.m. every day of the week. If I order a high-value item, it is delivered to a locker about a mile down the road. 

Amazon. I have a number of non-perishable items delivered on a regular "subscription" basis, like K-cups (Starbuck coffee), generic Rogaine, anchovies. I will start adding more items like paper products. Every time a "subscription" item is ready to ship, Amazon asks if I still want the delivery. A simple one-click keeps the delivery as requested, or "skips" it.

Amazon. Yesterday, I went to order a book on Amazon. It turns out the book won't be published / released until August 14, 2024, or something like that. But if I pre-order it, which I did, Amazon guarantees the lowest price. Right now, the publisher says the book will be priced somewhere between $19.99 and $49.99. Quite a spread. I assume it will come out at $29.99 or $39.99 at a brick-and-mortar store (Barnes and Noble) or $19.99 at Amazon. If it comes out higher than $19.99, I still get it at the price I paid yesterday ($19.99) and if the price is lower upon publication, I will be refunded the difference.

Now this from The Hollywood Reporter: 

Mark your calendar: On Jan. 29, Amazon will unleash what one top advertising executive calls a “tornado” that will “upend” the streaming video landscape. The company will flip a switch and turn on ads for all of its Prime Video viewers. Users will have the option to pay $3 a month to remove the ads, but as the executive quips: “Almost no one will do that, are you kidding me?”

After all, people are paying Amazon for the fast shipping. Reacher and Thursday Night Football are thrown in for free. It’s a move that has marketers salivating and a few legacy media executives anxiously waiting to see what happens.

The move will instantly turn Amazon into a streaming-ad juggernaut, and the largest ad-supported subscription streaming platform in the marketplace with tens of millions of users, leapfrogging the likes of Netflix in the process.

Amazon, run by Andy Jassy, has always been coy about just how many Prime subscribers it has (the last official number, in 2021, was “more than 200 million”), but no one disputes that its reach is almost unrivaled. Consumer Intelligence Research Partners estimates that there are about 168 million Prime subs in the U.S. alone, as of 2023.

If just half those subs watch Prime Video content, it would be comparable to Netflix’s penetration in the U.S. (77 million) and significantly more subs than the likes of Hulu, Peacock or Paramount+.

Data from Nielsen reinforces that: While Netflix and YouTube take up the lion’s share of viewing time, Prime Video is extremely competitive. The latest Nielsen Gauge reported that 3.4 percent of TV viewing in November was Prime Video, compared to 2.7 percent for Hulu, 7.4 percent for Netflix and 9 percent for YouTube.

The Gauge certainly suggests that if Hulu has just shy of 50 million subscribers, as Disney has reported, then Amazon is at least in the same ballpark in terms of Prime subs that watch video content.

Most Netflix users, however, are not subscribing to the ad tier (the company said in November it had only 15 million “active users” of the tier), while some Hulu subcribers also opt out of ads.

That scale, in both subscriber reach and real viewership, has analysts thinking that Amazon will be able to quickly scoop up billions of ad dollars. Bank of America’s Justin Post estimated in a Januuary 3, 2024, note that the company will ultimately generate $3 billion in new ad revenue from the switch, and nearly $5 billion when accounting for users who opt to pay not to see ads. LightShed’s Rich Greenfield estimates that the company will hit $2 billion in ad revenue this year. Both analysts assume that the overwhelming majority of users will opt not to pay extra to remove the ads.

Let's post today's ticker and check back in on it a year from now:

A p/e of 80. And they say APPL is expensive at 30x earnings.

Rambling -- Price Of Oil, US Secretary Of Defense -- January 10, 2024

Locator: 46512COMMENTARY.

Historical price of oil: link here.

This chart and the current price of oil "blows me away." Consider the "inflation story" for the past two years, and crude oil hardly "participated." Much could be said, but I'll let the professional analysts write about it.

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Secretary of Defense

Lessons learned.

My knee-jerk reaction was similar to what others opined with regard to the recent hospitalization and medical issues involving the Secretary of Defense.

But then, something happened. Mostly the passage of time -- 48 hours after President Biden spoke.  I didn't listen to his remarks and did not read them. All I know is that for the moment, the president is sticking by his Secretary of Defense.

I really, really admire President Biden's decision. On so many levels.

It is coincidental that I was reading / studying Shakespeare's The Merchant of Venus where the phrase "pound of flesh" was prominent. 

Maybe more later.

But this speaks volumes about President Biden, the man.

At The Close Today -- January 10, 2024

Locator: 46511INV.

Gasoline demand, link here: 

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US Markets

It's all about the NASDAQ and tech.

NVDA / OXY:

The market:

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Back to the Bakken

Active rigs: 40.

WTI: $71.28.

One new permit, #40447:

• Operator: Phoenix Operating
• Field: Burg (Divide)
• Comments:
• Phoenix has a permit for a Daniele well, NENW 26-160-99, to be sited 520 FNL and 2538 FWL:

Two permits renewed:

• Whiting: a Larson permit, Corinth oil field, Williams County;
• Hunt: a Palermo permit, Ross oil field, Mountrail County;

Two permits canceled:

• 28687, Whiting, a Pronghorn State Federal permit, Billings County;
• 35961, Liberty Resources, a Tucson permit, Mountrail County;

ESG: What A Difference A Year Makes -- January 10, 2024

Locator: 46510ESG.

Tag: woke.

Link here.

From the linked article:

Following years of simmering investor backlash, political pressure and legal threats over environmental, social and governance efforts, a number of business leaders are now making a conscious effort to avoid the once widely used acronym for such initiatives.

On earnings calls, many chief executives now employ new approaches. Some companies, including Coca-Cola, are rebranding corporate reports and committees, stripping ESG from titles. Advisers are coaching executives on alternative ways to describe their efforts, proposing new terms like “responsible business.” On Wall Street, meanwhile, some firms are closing once-popular ESG funds as interest fades.

The shift in messaging reflects a reality: “ESG is complicated,” said Daryl Brewster, a former Kraft Foods and Nabisco executive who now heads Chief Executives for Corporate Purpose, a nonprofit of more than 200 companies focused on social impact.The movement to bake accountability into business decisions stretches back centuries; the term ESG gained momentum after the United Nations used it about 20 years ago. Over time, the effort became divisive—derided by some state officials as “woke capitalism,” and criticized by others for putting too much focus on measurement and disclosure requirements.

Many CEOs stress that they continue to follow sustainability commitments made years ago—even if they are no longer talking about them as often publicly. A December survey by the advisory firm Teneo found that about 8% of CEOs are ramping down their ESG programs; the rest are staying the course but often making changes to how they handle them.

Many leaders are more closely examining disclosures, wanting to avoid regulatory scrutiny or political criticism. In lieu of lofty pronouncements, advisers are telling CEOs to be more precise and to set goals that can be achieved. Saying as little as possible is recommended.

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The Book Page

I'm back in my Shakespeare phase. In the last couple of weeks I've focused on three Shakespeare plays:

• The Winter's Tale;
• The Tempest;
• The Merchant of Venice.

Now, for the fourth play: Measure for Measure.

 The books this week. Focus on Measure for Measure.

• William Shakespeare, Harold Bloom, editor, c. 2004.
• "Measure for Measure": The Flesh Made Word, Ronald R. MacDonald, p. 343
• Shakespeare's First Folio: Four Centuries of an Iconic Book, Emma Smith, c. 2016, from the local library, looks and feels brand new!
• Shakespeare's Guide to Italy: Retracing the Bard's Unknown travels, Richard Paul Roe, c. 2011, in personal library.

Most rewarding: I think I. have "discovered" something in The Merchant of Venice not mentioned in any of the several sources regarding the play. 

My hunch: Antonio, Bassanio, and Portio represented a threesome of sorts, though not altogether at once. My hunch: Antonio and Bassanio were more than close friends. For staging, one might consider a "Johnny Depp" as Antonio. Portia? Carey Mullilgan. Bassanio, perhaps Antonio Banderas. Or perhaps, better yet, Antonio Banderas as Antonio the merchant, and Johnny Depp as Bassanio.

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The Art Page

Snowmen.

The Norman Rockwell version, by Levi:

The Picasso version, by Judah:

The Importance Of Reading 10-Ks -- Nvidia, Oxy -- January 10, 2024

Locator: 46509INV.

Tell me again, how much we aren't going to like global warming.

Today, in north Texas:

Barron's today, link here:

Tickers:

EV Headlines -- Outlook: Yellow -- January 10, 2024

Locator: 46508B.

Surfing the news today, outlook for EVs on a green - yellow - red scale: yellow.

Theme, 2024, link here:

• EV shake-out.

Theme, 2024, link here:

• EVs: have lost their luster
• 2024 was to have been the break-out year for EVs
• high interest rates and the long UAW strike will push this transition out at least another three years (2027)
• it's obvious that EVs are luxury cars, and Americans are subsidizing rich folks to buy luxury cars
• state governments will realize that lost gasoline tax revenue is a huge problem for highway maintenance, much less new highways

Tesla / Hertz, link here: 

BMW: all in.

Tesla Model 3 upgrade, rave reviews, appears, as a lease, may qualify for tax credit, link here:

Tesla Model 3 update, range:

• base: about 275 miles
• high end: about 350 miles

That range is perfect for a driver like me. I would only need to re-charge every 30 days or so:

One Well Coming Off Confidential List Today -- January 10, 2024

Locator: 46507B.

Weekly EIA report, link here. API suggested a huge crude oil draw; the EAI says crude oil in storage increased:

• crude oil in storage: increased by 1.3 million bbls; at 432.4 milllion bbls; 2% below 5-year average
• imports: up 8.2% y/y
• refiners: 92.9%
• distillate fuel inventories: 4% below average -- wow, wow, wow --what a turnaround after several years;
• jet fuel supplied up 3.6% y/y

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Back to the Bakken

WTI: $72.25.

Thursday, January 11, 2024: 12 for the month; 12 for the quarter, 12 for the year
39721, conf, Falcon Midstream Services, Cheryl 3,
38302, conf, Whiting, Bigfoot 23 7H,

Wednesday, January 10, 2024: 10 for the month; 10 for the quarter, 10 for the year
39997, conf, Ragnar Exploration, Francisco 2-20H,

RBN Energy: consolidation trend expands to the gas compression services sector.

There’s been a lot of M&A activity the past couple of years among oil and gas producers — midstreamers too. That makes sense. Joining forces can provide all kinds of opportunities: for synergy, economies of scale, and expansion within (or into) key production areas, to name just a few. Well, energy-industry consolidation isn’t limited to E&Ps and midstream companies. Just recently, two major providers of contract compression services — critical to the gathering and processing of natural gas in the Permian and other plays — announced that they will be combining to form what they say will be the largest firm in that space. In today’s RBN blog, we’ll look at the gas compression services sector and the plan by Kodiak Gas Services to acquire CSI Compressco LP.