TomB16 investing blog

The Saudi / Russian oil production cut is said to be upon us. If true, that is great news for a couple of my positions.

I'm not confident in the announcement. It would make more sense for Russia to hold prices down for a longer time but I hope it holds.

This is big news.

 

We can see what happened. They made adjustments to keep the price around 20 dollars ppb for WTI.

Sending prices to $0 will hurt Saudi/Russia without having much detrimental effect on the US. America is already shutting down it's oil industry.

This is one front of the most aggressive economic war imaginable.

 

Status:

We are at about 18% cash and haven't executed a transaction in about two weeks.

Our portfolio has recovered a lot. We aren't down much. Our PSQ is down a bit. Two other stocks are down a lot. Mostly, we are cruising along fine... for now.

We may pick up more PSQ for the next crash. That has not yet been decided.

 

Here are a few details from our tracking spreadsheets.

Tags: spreadsheet automated googlefinance yahoo finance


googlefinance("GOOG","price")

IMPORTXML(concatenate(concatenate("https://finance.yahoo.com/quote/", "GOOG"), "/"), <XPath>)

XPath Yield --> "//*[@id="quote-summary"]/div[2]/table/tbody/tr[6]/td[2]"
XPath EX-date --> "//*[@id="quote-summary"]/div[2]/table/tbody/tr[7]/td[2]"
XPath earnings date --> "{//*[@id="quote-summary"]/div[2]/table/tbody/tr[5]/td[2]"


Reference:

Google finance --> https://support.google.com/docs/answer/3093281?hl=en

Yahoo finance --> Any reference I've found is out of date and only partially working. I use Google, where possible, and augment Google with the above three XPaths.

 

I spent the last two days pouring over a formidable ream of numbers. Here is a stratospheric view of that piece of land.

- Our net worth is currently equal to what it was in late October of 2019. At the low, our net worth was about the same as mid 2017. I don't know why the market has irrationally recovered as much as it has but... thank you.

- Our net worth is equal to 6 months ago but our position is much different. We hold a lot more shares today than we did then. If valuations return to previous levels, we will do extremely well.

- Our distribution income has gone up 45%. I expect two of our smaller companies (which are struggling) to discontinue their dividend, leaving us still quite a bit above previous distribution highs in March.

- Having a bias toward distributing companies is a massive benefit, at times like this. 10 years ago, as we got closer to retirement, I started allocating money into distributing companies. In retrospect, I wish I had been doing that all along.

If, in October 2019, I had the opportunity to swap our position of the time with this current April 2020 position, I would have undoubtedly done so. While not a massive step forward, it is a significant step.

These days, I focus on ownership of companies, more than anything gauged in dollars. If you own a reasonable amount of a good company, you will do very well regardless of the volatility to your net worth due to market fluctuations.

 

Are there any Russian sanctions that still have teeth? Many have been gutted by Trump. Russia is operating unabated.

The first production cut was as lame as we expected. Now there is talk of a second cut.

It seems to me, their goal is not to restore the price of oil but to bring it up a bit where the Saudi and Russia can operate but America cannot. I'm not sure about Russia's cost of production but the Saudis are under $10. In the US, it's closer to $40, varying on the lease.

 

Not much to say. Most of my drama has happened, by now. I don't expect to post much for the next while.

I'm expecting a second crash when people realize a small but real portion of North American operations will not be profitable through the depression that is coming. Not all businesses will survive.

Speaking of depressions, I speculate it will be brief by depression standards. Perhaps 24 months based on a complete guess.

A lot of money remains on the sidelines so I expect this will be a culling of the herd, followed by feverish re-investment. Again, that is wild speculation based on real, but insufficient, information.

The long term investor's axiom applies to the current situation: When unsure of what to do, do nothing.

That's what I'm doing, these days. Nothing.

 

The US unemployment rate now passes 20% while we are in the worst quarter for the economy in generations.

 

Of course. Any friend of yours is a friend of mine.

 

I'm not sure this belongs in an investment blog but I'm going to share it.

It is important to me that my wife and I are positive members of Earth. We want to leave it better than we found it.

I have no interest in aggrandizing our contribution but I will say I'm very proud of my wife for what she has done in her life and doubly so, with her contribution during this crisis. For my part, I try to keep up.

However....

We have met people going so far beyond what we are doing, it's humbling. What's more, these people appear to be far, far less able to give than we are. In this sense, we are almost parasites. lol!

I know a woman who is making meals for truck drivers. She could barely support herself before the pandemic. She makes about 40 meals every day and takes them to a transport hub that is over-run with heavy truck activity.

Let's be clear, I don't think this is wise. I admire it but feel she would be better off with longer term thinking.

Suffice to say, this diminishes my assessment of our own contributions. We are giving a comfortable amount, despite being in a pretty solid position that would allow us to do more.

As things return closer to normal, over the next few months, we're going to need people to return to activities and spending, as much as possible. Hopefully, we still have a few bucks left for that phase.

I hope this isn't just a case of me being a money hoarder. These are great times for self evaluation.

 

I watched Cathie Wood's podcast, this morning. She discussed positive signs, a V shape recovery, and corporations "trying to salvage profit for the quarter."

I found myself wondering what she is smoking. What business can take a 45 day shut down and not have a nightmarish quarterly earnings report? What business can take a 45 day shut down and stay in business?

It's tough to imagine anything other than blood in the streets when Q2 earning reports come out.

A handful of businesses will do very well. Disney. Netflix. UPS. Etc.

 

I don't know how official the Disney restart time is. All I know is that it's down and I have also read where they don't believe they can re-open in 2020.

Thanks for pointing out the theme park shut-down. I should have written Disney+, with regard to companies that will do well. It's the Disney theme parks that are in trouble.

 

Diamond Offshore (DO) files for bankruptcy.

Several articles on it cite DO as part of the "first wave" of oil industry bankruptcies.

The blood bath has not yet begun.