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3M is down over the past 5 years and below it's COVID low. Do you see value in MMM at current prices?
P.S. I don't follow MMM closely (yet), is the decline due to the pending earplug lawsuits?
Asking outloud, inflation is being seen across many areas but precious metals are not one of those. Any thoughts why?
https://finviz.com/futures_charts.ashx?t=METALS&p=w1
I think GRFS is not particularly cheap at this price, and frankly I don't understand why it was valued significantly higher. The business seems sustainable - but commodity is a good word.
Grifols:
Dew I was stalking old Grifols tweets and saw you talking about them back in 2013, I think. Do you follow this company still? Trading at 5 year lows.
I've long dreamed of a drone transport over the Long Island Sound to and from Stamford to LI. Less than 10 miles as a crow flies. If the trip cost the same as a Lyft or Uber I would be a happy customer.
Do you think EDP-938 (RSV) has blockbuster (billion plus) commercial prospects?
All things considered PCVX did alright valuation wise. Still pre-clinical and valued at 1.2 billion. If PCVX can prove out VAX-24 safety and efficacy and quickly follow up with VAX-30+, PCVX may have a better strategic position. Thanks for the PCVX discussion.
After you do extensive due diligence and decide a company is worthy of a large position size, what percentage of the portfolio does that make up? - That is one way to ask it.
If you don't mind the ask Dew, how do you think about position sizing, other than "large"?
If taken at face value, which sectors would most benefit from the transition? Electricity generation, EV essential metals are an easy answer.
You're right, this may have the effect of further balancing the oil market.
By operator // acreage tier
— The Commodities Guy (@CommoditiesGuy) January 25, 2021
Time stamped mid sept (pre-mergers)
📷 cred: $bmo pic.twitter.com/rtcOmYW3nV
Diamond (back) (off shore)? Perhaps a third I am unaware of? Which one bio? T.i.a
These orders are making oil and gas investing a field full of land mines - even move than normal :).
Within North America 2 subsectors of operators have been impacted so far. First, Canadian oil sands companies, which I favored heavily during 2020, with the blockage of Keystone XL. Two, the operators effected by possible ban on federal lands. DVN, EOG, COP, MRO, CXO, MTDR, XEC, OXY, and WPX have greater than 20% of their total acreage leases on Federal land. A 20% write down of value is a large risk.
I don't know how to quantify the impact of XL on WTI/WCS differentials. If anyone has an idea I would like to see it.
Have heard March liquids contracts are trading around $10. No one expects prices in the 30's to last.
Does the Q3 results change your opinion at all?
https://www.cnrl.com/upload/media_element/1307/02/1105-q320-front-end.pdf
It is hard to consider XOM competitive currently. CNQ is fully funded including sustaining CapEx plus dividend at $31 oil, and has a 8% yield.
AXGT: I was one of the sellers. It does seem excessive, especially since the press releases mentioned batches were already being tested. So why did I sell if I thought the drop was excessive?
Lost trust in management. Decided to PR an n=1 update in the same month as their R&D day, start an ATM, but didn't decided to PR a CMC issue.
Imho I agree Dew. I find quality investment candidates harder to determine. Shale is a treadmill and any company with federal lands has too much black swan risk at the moment. Leaves me to choose between oil sands, which I own, and royalty companies. I do not own TPL, VNOM or PSK.to though I am currently toying with the idea. Decent upside leverage without the capital burden of e&p companies. If anyone has an opinion on the royalty co's I would be happy to listen.
P.S. There seems to be a similar bullish skew on US NG and NGL prices for the next 12 months. I struggle to find a NG company I want to own.
Pioneer Natural Resources Is in Talks to Buy Parsley Energy
https://www.wsj.com/articles/pioneer-natural-resources-is-in-talks-to-buy-parsley-energy-11603153466
This energy patch consolidation looks to be healthy.
Thanks Dew, eom.
Vaccine payment rates?
Does anyone have an idea of the typical payment CVS or Walgreens gets on a flu shot, assuming insurance? I have seen estimates range from $10 - $50. The thesis is potentially that pharmacy chains may benefit as a toll taker on increased vaccine volume. CVS is guiding to substantial flu vaccine increases YOY, and I would estimate an addition 300 million COVID vaccine doses administered in the next couple years.
this is a thorough and in a normal world devastating take down https://t.co/T4QPWowiU3
— modest proposal (@modestproposal1) September 10, 2020
Re: latency and power consumption
I will throw this out here with the expectation that it will fall flat. But given your recent mention of working with the Cray 1, I figured I would mention. I have some familiarity with the technology / company in the below link. On occasion I wonder about using this technology in EV's but I am not the right person to connect the dots. A 90% savings in power consumption would potentially create a massive competitive advantage in EV's.
https://www.datavortex.com/performance/
Is the challenge of AV at this point more software or hardware related at this point?
Quite the contrast to CNQ placing 1.1 billion worth of notes at ~2.5% today.
https://www.cnrl.com/upload/media_element/1298/03/0622-prices-notes.pdf
A question I have only seen partial answers to is the following:
If a company is unhedged and selling at "spot" what price does the company receive? When does a company selling at spot lock in prices?
My assumption is "real cut" equates to agreed upon terms of the 2 year period. Any addition idled production is obviously real, but outside of the terms of agreement. Being outside the terms of agreement is cause for the phrasing "real cut" vs "idled production", I think.
Re: OTIS
Fundsmith had a favorable mention of OTIS in their annual shareholders meeting.
Details may have changed - but my understanding is that the cuts are in place for 2 years. During that period there is a gradual return towards baseline. From a practical standpoint, idled production may have the ability and incentive to come back online before the "real cuts" come back on line.
Re OTIS:
Looked through the OTIS investor day presentation this morning. ~3% annual growth and ~3-4% FCF yield is a rather firm price. Good for them for getting that valuation in this environment. To your direct question, my answer is I don't know :). I suspect the valuation is such that investors think OTIS's market will look similar decades from now as it does today. And that, in a sense, responds to the long term appeal.
Has any of the recent events, or trends that have emerged from social distancing changed your views with regards to natural resources/global demographic tailwind?
P.S. Could not find a presentation for Carrier, or easy to find financial information. If you have seen a Carrier presentation please send the link.
I do. Here is why:
Look at a 15 year chart on CNQ or SU. On either chart there are clear share price drops in 2008 and again in 2014. Both drops were due to legitimate reasons regarding oil supply and demand at the time. The narrative at that point in time was similar to the current state of the market. Essentially, supply and demand are out of balance for reason x, y or z.
I want to be clear, there are most certainly legitimate fundamental reasons why oil is trading at $20 a barrel. I just as strongly believe that at some point in the next 24 months there will be just as legitimate reasons for oil to trade higher. The narrative will change for reason xx, yy, or zz. It doesn't matter to correctly predict the next positive oil black swan only to recognize that one will happen. The middle east is still a powder keg, Russia is hemorrhaging money (but has resolve and solidarity), instability in south america. Something will shift the market from it's dismal current state.
In the past week, the Kremlin has twice commented (that I have seen) that it would like to see higher oil prices. Will Russia and Saudi make peace? Maybe, not for me to say. I sleep well at night knowing I bought best in breed, and that the best in breed is trading at a significant historical discount. It is painful to read oil may go negative and WCS is trading at $9 a barrel. But if it wasn't painful oil wouldn't be trading at $20 a barrel. The narrative is dismal currently. At some point in the future the narrative will change. It's really that simple in a market with as many volatile inputs as oil.
P.S.: I have the benefit of not having to look at my account often. My current strategy is to add when I have available funds and forget my password in between. That does not imply I have my head in the sand, but the daily swings I feel removed from.
P.S.S. I think we are in peak gloom for the overall market. I am turning slightly optimistic that a treatment is around the corner. If that is true the economy will turn back on and the amount of damage done could be less than predicted by some. At least I hope this is true. I feel terrible for small business and restaurant owners. This situation is completely unfair to them.
Re: Bullish on oil
I too am taking a long term bullish position on oil. The oil markets had two black swan events and justifiably tanked. The next move could be another leg down to $20 / barrel, not predicting anything short term.
Mid-long term I am happy to go on record saying oil will return to $45-60 / barrel. And as such, I think it is an opportunity to buy quality oil companies that 1) maintain sustaining capex + dividend at these prices and 2) have decently strong balance sheets 3) have low decline profiles. J
ust as seemingly random events created this crash, seemingly random events will create an upside narrative. Opec+ truce, Middle East unrest, COVID-19 demand rebound, who knows but it will happen in time.
CNQ and SU (no bios yet)
Insulin Resistance & Type 2 Diabetes: A new paradigm
Listened to The Drive Podcast, Peter Attia and Jason Fung on "Fasting as a potent antidote to obesity, insulin resistance, type 2 diabetes, and the many symptoms of metabolic illness".
https://peterattiamd.com/jasonfung/
Has your evaluation of the company changed since you made your bet? I'm not asking rhetorically.
What is the case for continuing to own ENTA as a stand alone company at this valuation, other than buy out vig?
Semi, any thoughts on how they can reduce the power consumption?
I think an understated component to this complexity is HIPPA requirements. (not to take away from all other components). It is impossible to be efficient due to the barriers HIPPA creates between health care entities.
No particular company. I have spent time investigating pre-public companies IP, which lead me to that question.
Does anyone here know of any examples of a company going public before the IP of it's lead drug is "patent approved" and still in the "patent application" period of the USPTO process? Vague and specific question, but I am hoping Dew has an example (if it exists) in his catalogue of posts.