***Official*** 2016 Stock Market Thread

[FelixDeCat]

I think it would be nice to have some metals as part of an overall balance portfolio. A relative of mine has been "stacking" silver rounds since 2011 when it was $50 an ounce. He now has about $5,000 worth. The only problem with that is the more of the metal you physically have, the greater chance you have of becoming a victim of robbery - unless you have a safe, keep your mouth closed and/or pay for a safe deposit box.

I've traded the SLV Silver Trust before, just be aware that the following year you will have to fill out a separate Schedule 8949, with Box "B" checked, as trades in trusts (even exchange traded) and notes (like the UBS bank note MORL 2X REIT) cost basis is NOT reported to the IRS.

 

[Imp]

I think it would be nice to have some metals as part of an overall balance portfolio. A relative of mine has been "stacking" silver rounds since 2011 when it was $50 an ounce. He now has about $5,000 worth. The only problem with that is the more of the metal you physically have, the greater chance you have of becoming a victim of robbery - unless you have a safe, keep your mouth closed and/or pay for a safe deposit box.

His $50/oz silver is now $14/oz...

I agree, I'd love some gold as part of my portfolio, but I want real end-of-civilization gold, not certificates or bank held stuff. For that, I feel the need for a gun or two. Not being 'Murican in the land of the free, I have to join a gun club to get a restricted gun license (restricted ~= man-hunting pieces) and I don't feel like paying any dues or licensing fees...

P.S. Keeping mouth shut won't do much good. If a gold/silver seller gets haxx0r3d, the shipping addresses of buyers will make a nice break + enter list. Or if you get it from a bank, the near minimum wage teller or relatively low paid bank employee may do it him/herself.

 

[Charmonium]

His $50/oz silver is now $14/oz...

Well, more like $15 and change but yeah. If he dollar cost averaged, he might only be down 50% but I'm guessing it's more than that.

But if you're a prepper, you might care more about quantity rather than the current spot price.

 

[Imp]

Well, more like $15 and change but yeah. If he dollar cost averaged, he might only be down 50% but I'm guessing it's more than that.

But if you're a prepper, you might care more about quantity rather than the current spot price.

K, I haven't checked the price in a while.

Is there a point in diversifying your "prepper portfolio?" I mean, gold is the end all and be all. It'll even pay your fare to hell. And clearly, its value density is way larger than silver. Why have poverty silver when you can go all in on gold in preparation for the end of days?

 

[Charmonium]

K, I haven't checked the price in a while.

Is there a point in diversifying your "prepper portfolio?" I mean, gold is the end all and be all. It'll even pay your fare to hell. And clearly, its value density is way larger than silver. Why have poverty silver when you can go all in on gold in preparation for the end of days?

I don't know but my guess is that although silver is bulkier per unit of value, it's easier to divide. You might have a bunch of 1oz gold coins, but what happens if you want to trade for something that's only worth a fraction of that.

Honestly, I would go with the Walking Dead mentality myself and go with canned goods or MREs. Precious metals I think necessarily imply that after the apocalypse there will still be some sort of social organization such that you can use place holders like gold and silver for actual goods. I don't think that would be the case.

 

[FelixDeCat]

Iran says production cuts were just a joke.

LOL!

 

[Udgnim]

it'll go down below $30 and then OPEC will say something to get it back above $30

 

[Imp]

it'll go down below $30 and then OPEC will say something to get it back above $30

No, no, no. OPEC doesn't have to say anything. A "report" just has to say OPEC allegedly said something.

Then all the algos monitoring social media will react, then humANs will react, and we'll be back at $35 within a week. Then the rumors will be dispelled, rinse, repeat.

And if this bullshit keeps going for a few more months, storage will reach capacity, then no one wins. Rumor is that Cushing may be turning away shipments because they're at 80% capacity.

 

[StrangerGuy]

I don't know but my guess is that although silver is bulkier per unit of value, it's easier to divide. You might have a bunch of 1oz gold coins, but what happens if you want to trade for something that's only worth a fraction of that.

Honestly, I would go with the Walking Dead mentality myself and go with canned goods or MREs. Precious metals I think necessarily imply that after the apocalypse there will still be some sort of social organization such that you can use place holders like gold and silver for actual goods. I don't think that would be the case.

Yeah, I am baffled with the gold hoarders myself when there really isn't a middle ground between a great depression-esque world where T-bills + cash still rules the day and a Mad Max one where there is a complete breakdown in social order.

 

[Imp]

Saudi oil minister summarized what they're doing pretty simply and believably...

http://www.cbc.ca/news/business/saudi-oil-minister-in-houston-1.3459539

Sounds like they saw the oil glut in 2014, asked non-OPEC what they were doing, felt like they got the finger, and went "no, fuck you."

That over-supply through the summer of 2014, led to a meeting between OPEC and non-OPEC producers.

"We met with non-OPEC producers, we asked 'what are you going to do?' They said nothing. We said the meeting is over."

Man, I should have paid more attention to what was going on then. Wouldn't have bought the shit that was Canadian Oil Sands for $19 -- sold around $10, now around $9 after being acquired.

 

[Imp]

Hahahaha.... hahahahaha.

I know the API oil report was way off compared to the EIA report last week, but the API one that came out today said last week saw a 7.1 million barrel crude build. Distillates went down a bit though.

 

[Charmonium]

Saudi oil minister summarized what they're doing pretty simply and believably...

http://www.cbc.ca/news/business/saudi-oil-minister-in-houston-1.3459539

Sounds like they saw the oil glut in 2014, asked non-OPEC what they were doing, felt like they got the finger, and went "no, fuck you."



Man, I should have paid more attention to what was going on then. Wouldn't have bought the shit that was Canadian Oil Sands for $19 -- sold around $10, now around $9 after being acquired.

What I think is interesting about that story is the implication that the Saudis thought that there was the possibility of another response. OPEC itself has never shown a great deal of solidarity, at least not since it became more than a club of mid-east producers. So you can't really expect much more from NOPEC.

The rest of the world was always going to take the typical capitalist approach which is to look for short term gain rather than long term stability. I think the only reason the Saudis even made the attempt was because they knew how much pain would be generated by opening up the tap and trying to put the high cost producers out of business.

 

[11thHour]

Too many oil producing countries hurting for money to cut production imo.

 

[StrangerGuy]

Hahahaha.... hahahahaha.

I know the API oil report was way off compared to the EIA report last week, but the API one that came out today said last week saw a 7.1 million barrel crude build. Distillates went down a bit though.

It's like there is a pattern whenever oil gets a slight rally there comes the downer news next.

 

[Charmonium]

I saw a chart on Bloomberg yesterday that showed global demand and supply for the next several years. It was plotted again changes in oil inventory.

Bottom line was that supply will exceed demand until 2017 most likely. At that point, inventories will gradually start to decline in 2018 and beyond.

Of course these are projections and no one really knows. So I figure the margin of error is probably at least one year in either direction.

 

[ponyo]

http://www.reuters.com/article/us-usa-fed-lacker-idUSKCN0VX1J1

I find it interesting oil is down and the Fed has been talking about raising the interest rate for the past two days and yet gold bounced off support at $1200 and is up the past two days. In the past, any chatter of possible rate hike and oil price decline would've taken gold price down with it. I guess the market doesn't believe rate hike will happen and is betting on NIRP.

 

[theeedude]

Fed doesn't mind deflating the bubble before it gets too out of hand, while the economy is still doing OK.

 

[Charmonium]

Esther George, president of the Kansas City fed, recently became a voting member of the FOMC. I forget how this works but all of the regional heads are part of the FOMC but voting rights rotate. Anyway, I believe that she is considered a bit of a hawk on monetary policy so the probability of a rate increase probably just went up.

 

[turtile]

http://www.reuters.com/article/us-usa-fed-lacker-idUSKCN0VX1J1

I find it interesting oil is down and the Fed has been talking about raising the interest rate for the past two days and yet gold bounced off support at $1200 and is up the past two days. In the past, any chatter of possible rate hike and oil price decline would've taken gold price down with it. I guess the market doesn't believe rate hike will happen and is betting on NIRP.

I think it will happen. It has to happen before everything gets out of hand. Housing is way overpriced yet again and companies will become dependent on low cost money.

 

[FelixDeCat]

So apparently Chesapeake (CHK) will NOT go bankrupt. They have enough cash to meet debt payments, announced a smaller than expected loss and sold some assets recently. Current price is $2.60.

I bought 200 shares at $2.55 for the ride to $5.00. If not, well I guess I will lose money. Thankfully I sold my puts on CHK before the big jump last week, but did not see the wisdom in buying calls.

Chesapeake said it has signed deals to divest $700 million in gas fields and other assets, well above its $200 million-$300 million target, and plans to sell $500 million-$1 billion in additional assets this year. Shares jumped 24.7%, as the asset sales allow it to pay off debt coming due in three weeks.

Markets have been worried that Chesapeake may default on its debts or even seek bankruptcy protection. In January, the oil and natural gas producer suspended dividends on its preferred shares in a move to conserve cash and pay down its debt.

Management said Wednesday it purchased $240 million in senior notes due next month at a 5% average discount and has been buying bonds that mature in 2017 at an average discount of 45%.

Chesapeake will also cut 2016 capital spending by 57% to $1.3 billion-$1.8 billion and sees production falling by as much as 5% excluding asset sales.
Fourth-quarter results swung to a loss of 16 cents per share from a profit of 11 cents per share in the year-ago quarter. Analysts polled by Thomson Reuters were expecting a 17-cent per-share loss.

Revenue fell 47.5% to $2.65 billion, slightly above views for $2.63 billion. The company had an average rig count of 14 rigs operating in Q4, down from 67 a year ago, and plans to average four to seven this year.

 

[MomentsofSanity]

Friendly reminder that on Friday, Feb 26, the NYSE will stop accepting stop and GTC orders entered directly with the exchange. ANy open orders would be cancelled.

Most people will be unaffected as brokers don't typically route orders directly through the NYSE but it may get some attention so thought I'd throw that out there.

 

[Imp]

I saw a chart on Bloomberg yesterday that showed global demand and supply for the next several years. It was plotted again changes in oil inventory.

Bottom line was that supply will exceed demand until 2017 most likely. At that point, inventories will gradually start to decline in 2018 and beyond.

Of course these are projections and no one really knows. So I figure the margin of error is probably at least one year in either direction.

Best case scenario: supply balances out with demand in 2017. Last I heard, a large number of smaller oil companies won't make it to the end of 2016.

That's assuming the projections are accurate... Supply is probably easier to project than demand, especially in a world that appears to be slowing down. If China goes, that demand curve will probably look a bit different.

Regardless, the lack of investment now probably means a shortage in supply within the next decade and the next oil boom.

 

[JEDI]

So apparently Chesapeake (CHK) will NOT go bankrupt. They have enough cash to meet debt payments, announced a smaller than expected loss and sold some assets recently. Current price is $2.60.

I bought 200 shares at $2.55 for the ride to $5.00. If not, well I guess I will lose money. Thankfully I sold my puts on CHK before the big jump last week, but did not see the wisdom in buying calls.

chk went up 22% today.
but why didn't my utilities mutual fund (FUTY) spike?

 

[FelixDeCat]

chk went up 22% today.
but why didn't my utilities mutual fund (FUTY) spike?

Im not sure, but FUTY sounds too much like footy so I guess the market got a whiff of that fund and sold.

 

[Imp]

And 20% job cuts by Encana (oil & gas):
http://www.cbc.ca/news/canada/calgary/encana-cuts-20-percent-downsize-1.3461568

Add that to the ~3000 layoffs announced by Bombardier to be happening over the next year or two.

But hey, Canada's doing great... especially with $15+ billion federal gubment projected deficits over the next two years.