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Jake Berzon's Comments Stream Stats
- 53 Comments, 24
, 2 
- Total Comment Stream rating - = 22
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Grey Wolf Is Sent to the Doghouse
Your analysis is a bit "puzzling," but I like the cartoons...
After the election deadline passed, GW shares fell to slightly above their expected value equivalent of 0.4225 of PDS share per share of GW.
Prior to the deadline, they were trading at a slight discount to their expected blended value equivalent based on $5 plus 0.188 PDS shares per share of GW.
This is efficient markets at work. What happened is exactly what should have happened based on facts well known far ahead of time and had nothing to do with any institutional realizations.
We are also in great disagreement as far as PDS's future, which I believe to be much better than for many larger drillers. PDS has very efficient equipment for land drilling and low operating costs. They do not participate in offshore drilling, which is riskier, more expensive and even unprofitable, when oil prices are low. They were also smart to acquire GW, because getting oil out in Texas is much cheaper than in Alberta.
There is, of course, the issue of PDS paying more than GW was worth at the currently depressed driller market values and paying for this acquisition with rather expensive debt, but I believe PDS has the strength to overcome these issues. I wrote extensively about PDS last Thursday seekingalpha.com/artic... and also a year ago stockvalues.org/new-in...
What's Driving Precision Drilling Trust Into the Ground?
> another self serving article.too many on this site.i own this stock.
Too few people read this blog for entries within it to be considered self serving. I thank you for being among this elite.
On Dec 19 02:12 PM User 19554 wrote:
> The key question here is why didn't you buy Grey Wolf stock?
The reasons that I did not purchase GW instead are many and complicated. Here they are, breifly:
1. Taxes on the cash portion of the distribution.
2. Discount over buying PDS directly would have only been about 3%.
3. If for some strange reason this deal does not close, GW stock would fall at least 50%.
4. I would need to be sure that the distribution instructions were received by the following day, or seriously risk getting screwed by only receiving PDS shares and not the cash.
On Dec 19 03:33 PM BLITZ wrote:
> Are you sure about the ceo they sometimes do crazy things at buyout time ala
> KEN FISHER @bank Of America, time warner-aol to name a couple.
I guess, you can never be sure, but I did get myself somewhat familiar with this fellow. He appeared to be very apt and a straight shooter, which is what you want under such circumstances. I didn’t get the connection between Ken and either Bank of America or AOL Time Warner
On Dec 19 04:15 PM turb0kat wrote:
> I think to say that it is the acquisition which torpedoed this stock
> misses the truth: the stock torpedoed because of the convergence
> of (a) impending payments on debt (b) expected slash in dividend
> (c) $100 drop in oil prices.
You are absolutely right – many factors are sinking this stock and some of these are macro. I was simply trying to say that PDS would be trading much higher, if it was not for factors tied to the GW acquisition.
On Dec 19 05:02 PM NanooGeek wrote:
> PDS recently announced an "in-kind" distribution, 'xplained as truing
> up the shares, or somesuch... which is likely to have tax consequences
> for ALL unitholders.
This is a very good point and you are absolutely right. They do these organizational distributions every year, as I recall, and those of us in the US who buy PDS, instead of the PD.UN on the Toronto Exchange get a little screwed by paying taxes to Canada for nothing. On the bright side though, these taxes are tiny and are also deductible on your US return.
The Manipulation of Gold Prices
As we speak, every country around the globe that matters (with perhaps short-term exceptions of Germany and Canada) are passing one bailout after another. They are all financing it with debt (what else?) and this is mega inflationary!
If all this bailout bonanza accomplishes its goal of getting the world out of a recession by spending money that nobody has on more goods that nobody needs, the question will not be "which currency will weaken?" but "which one will weaken more?" Inevitably, they will err on the side of overcorrecting and cause inflation.
Intermediate term this is bullish for gold, of course. But it is also bullish for every other "hard" asset, including precious and semiprecious metals, ag commodities, oil and equities of profitable companies.
Generic Drug Price War Ramps Up
Value vs. Price: Trade in Your Gold for Oil and Agriculture Futures
> 3) Realistically, we won't any serious transition to alternative
> energy for the next 30 to 40 yrs. So oil will only become more valuable
> for the next 10-20 yrs at least.
>
You may be right, but commercialization progress in alternative fuels will depend on subsidies from world governments. My guess is that best case we will start seeing new viable self sufficient green energy making a meaningful (5%) commercial impact on world wide supply in 10 years and that 30 years from now it will still only account for less than 40%. This is actually pretty scary, if you think about it...
On Dec 22 04:53 PM Rokjok777 wrote:
> what's a good ag futures ETF? or managed ag futures fund? would like
> futures, not equities
I like DBA, but I have not invested in it yet.
On Dec 22 05:20 PM greywacke wrote:
> Jake: Gold is not a depleting resource. All the gold that ever
> was is still here. Oil is a depleting resource. However, both are
> finite resources versus wheat which is renewable. Is this what you
> meant?
Yes, I meant finite (depleting mineral supply) resource, of course.
On Dec 22 07:18 PM Robert Nabloid wrote:
> Is the last 25 years the best data to use to find the average? What
> was the last 100 years like? I'm just wondering... it would be interesting
> to see if it is much different. The last few decades we've had a
> lot of cheap credit being flung around and I expect there have been
> some pretty big diversions from what the "real normal" would be...
> but I'm not sure.
>
> If you are bored one day, could you see how far back you can get
> data on the price of gold/oil/wheat and compare going back further
> than just 25 years? Only if you really want to - don't just do it
> for me, lol. Though that data might not matter - either way I'm
> bullish on agriculture, oil and gold... They can all appreciate in
> dollars proportionally and still stay in lockstep with each other...
I have seen data that indicates that over longer period of time (40+ years) the steady state value is even lower (under 16 barrels per ounce) and that the further out in time you go beyond that, the lower is the ratio. The older data was not quite as good, which is why I didn't want to use it, but it does make an even stronger point.
SuperValu: Super Stock Value
What's Driving Precision Drilling Trust Into the Ground?
SuperValu: Super Stock Value
In the good old times of the heyday of Luckys, I quite enjoyed shopping at my neighborhood Sunnyvale, CA store and was quite disappointed when Albertsons Inc. took it over. Years later, while living in LA's Mar Vista neighborhood, I had many nostalgic chances to shop the nearby revived Lucky in the Beverly Hills area. I found it to fully answer the needs of my discerning and semi-sophisticated pallet.
In conclusion, I would like to reemphasize that I bought SuperValu because of its incredibly low valuation, which can only go up. Had I had an opportunity to acquire WMT or KR stock at a similar discount, I would have surely opted to go for these sure bet equities instead. Alas, that is not possible and they were trading at at almost 3 times the relative valuations of SVU. Thereby my verdict: SVU had to go up, while its competitors would edge down. So far this is exactly what has happened.
Four Dying Silicon Valley Companies
As an example, please allow me to illustrate one problem, with Yahoo! First, consider that their Yahoo! finance is one of their profit centers that actually is a money maker. Yet, they never bothered to fix transaction portfolio login functionality, after they broke it while implementing unified login years ago. This, despite the fact that there are plenty of free QAs - people who report, complain and ask for a solution to this problem...
Walmart: The Perfect Anti-Brand for a Recession?
What's Driving Precision Drilling Trust Into the Ground?
Cramer's Stop Trading! General Electric Brings Bad Credit to Light (12/18/08)
I still like GE and know it will survive and even thrive eventually, but I still didn't want to ride it all the way down to $10 in 2009, so I sold it on December 4, 2008 at $18.08, a 43.9% loss (including dividends and excluding commissions): seekingalpha.com/user/... . I really do hope to get back into GE mid 2009, when I hope this bear market will find its true bottom.
The Long Case for Hanes: Buy What You Wear
GE: Nuclear Growth Galore
Time to Start Nibbling on Corning
On Nov 03 07:07 AM skwestorange wrote:
> This article could be strengthened with a discussion of expectations
> for revenue, earnings and and margins in the three businesses cited.
> The qualitative discussion does not provide any objective support
> for the contention that GLW is undervalued and could be bought here.
> Further the article itself lays out the case for margin compression.