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Doing a lot of work on Nickel as we continue to see opportunity in the lithium-ion battery space for raw materials.  An overlay chart of Nickel and Cobalt reveals that the two metals traded virtually lock-step with one another until recently, with cobalt prices tripling from $10-$30 while Nickel was largely unchanged.  Take a look.  Our firm is playing a few names in the space (mostly juniors that I won't mention), but I'm personally looking at JJN (iPath® Bloomberg Nickel Subindex Total Return) - $14.14 currently.  Not a lot of volume, but to the extent I believe Nickel closes the gap on Cobalt, this stock should head higher from here.  It's up 26% over the last 3 months, so it's been running.  

From our Q3 letter to LPs:
 

The proliferation of electrification both for transport and energy storage will continue, but those technologies which prevail and those that will fail is a less easy task to identify.  We feel confident that the basic materials which are the foundation of all these technologies is more easily handicapped, which brings us to a new opportunity…

Going forward, we have become captivated by the attached chart below.  The price of nickel and cobalt have decidedly more than rhymed since 2002, and have only recently parted company, with cobalt  ascending while nickel languishes.  We have always considered despair, disdain, and disgust as a triumvirate of opportunity, and nickel is no exception.  We anticipate EV battery chemistry becoming more and more nickel centric in the years ahead, which will meaningfully bump demand for class I nickel.
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That's all I got.  

 
General Malaise said:
Doing a lot of work on Nickel as we continue to see opportunity in the lithium-ion battery space for raw materials.  An overlay chart of Nickel and Cobalt reveals that the two metals traded virtually lock-step with one another until recently, with cobalt prices tripling from $10-$30 while Nickel was largely unchanged.  Take a look.  Our firm is playing a few names in the space (mostly juniors that I won't mention), but I'm personally looking at JJN (iPath® Bloomberg Nickel Subindex Total Return) - $14.14 currently.  Not a lot of volume, but to the extent I believe Nickel closes the gap on Cobalt, this stock should head higher from here.  It's up 26% over the last 3 months, so it's been running.  

From our Q3 letter to LPs:
 

That's all I got.  
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I'm already looking forward to not being able to buy this, since I like the strategy so much.

 
General Malaise said:
Pretty sure that's the only game in town.  I use PGE.  There's no other option for power/electricity that I'm aware of.
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Just some data points.  After the 2007 fires mentioned in that article, the stock tanked 25%.  And it recovered just fine. After the 2015 fires, the stock really didn't appear to be all that negatively effected.

It's fallen 16% in two days....perhaps a few more days of riding some lows then a buy opportunity?

 
Tiger Fan said:
Just some data points.  After the 2007 fires mentioned in that article, the stock tanked 25%.  And it recovered just fine. After the 2015 fires, the stock really didn't appear to be all that negatively effected.

It's fallen 16% in two days....perhaps a few more days of riding some lows then a buy opportunity?
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I tend to agree.  

 
https://www.cnbc.com/2017/10/13/tesla-fires-hundreds-of-employees-report.html

I mean wtf? 11k X's recalled... that's what percentage of those that have been sold?

700 employees fired? During a ramp up (and this company never tells the truth, I'd bet the numbers were even higher), I don't care what roles they were in.

The market will look at this as a plus, cost savings I bet. 

Why does this company have more rope than any company in the history of the world?

 
fantasycurse42 said:
https://www.cnbc.com/2017/10/13/tesla-fires-hundreds-of-employees-report.html

I mean wtf? 11k X's recalled... that's what percentage of those that have been sold?

700 employees fired? During a ramp up (and this company never tells the truth, I'd bet the numbers were even higher), I don't care what roles they were in.

The market will look at this as a plus, cost savings I bet. 

Why does this company have more rope than any company in the history of the world?
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Maybe it was the legal team?

 
Netflix earnings tonight.  It has been run up so much I don't see how it does anything but go down.  Of course I'm a stupid ####### idiot.

 
I had a crazy TVIX dream last week... I was sitting at an outdoor restaurant in the middle of nowhere with my laptop in front of me. I decided to take on a huge TVIX purchase of like 100,000 shares (it was trading at $2.25) and almost instantly after I bought it, it starts rocketing up like nothing else... It just flew from like $2.25 to in the $8's in seconds when all of the sudden I was struggling to breathe - appears a nuclear bomb was dropped and then I woke up. 

 
fantasycurse42 said:
I had a crazy TVIX dream last week... I was sitting at an outdoor restaurant in the middle of nowhere with my laptop in front of me. I decided to take on a huge TVIX purchase of like 100,000 shares (it was trading at $2.25) and almost instantly after I bought it, it starts rocketing up like nothing else... It just flew from like $2.25 to in the $8's in seconds when all of the sudden I was struggling to breathe - appears a nuclear bomb was dropped and then I woke up. 
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Hope to God that never happens.

 
St. Louis Bob said:
I could but then I couldn't take advantage of the tax write off.
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Sure you could. Even if you bought/sold within 30 days you don't "lose" the losses, you just wouldn't be able take them all until you sold all of your shares (any disallowed losses due to the wash sale increase the cost basis of your remaining shares so you get it back that way). It really only effects the timing, not the amount (and if you sold them all the timing would be the same).

ETA- read the "What happens to your loss?" section here.

 
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Tiger Fan said:
Just some data points.  After the 2007 fires mentioned in that article, the stock tanked 25%.  And it recovered just fine. After the 2015 fires, the stock really didn't appear to be all that negatively effected.

It's fallen 16% in two days....perhaps a few more days of riding some lows then a buy opportunity?
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Yeah.  Somebody in the Napa fires thread mentioned being pissed that they might have caused this and will likely compensate by screwing the public with another 15% rate hike (I believe they said, "like they did in '15").

 
Bob Sacamano said:
Yeah.  Somebody in the Napa fires thread mentioned being pissed that they might have caused this and will likely compensate by screwing the public with another 15% rate hike (I believe they said, "like they did in '15").
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:thumbup:

20 shares purchased at opening this AM for $55.70 each

 
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Intrigued by PCG too, but I don't know enough.

NFLX price action is interesting to me. Are they not going up bc of content costs? Could the market be waking up to insane valuations (I doubt that)? 

 
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Tesla is a great company, unannounced non-performance related layoffs (most likely no severance packages) during a high growth time - this is def the kind of PR that brings in the top talent, which I'd think is a necessity in a very crowded space. 

Re NFLX: my debt theories above apply here too - I'm convinced the market loves debt (until it doesn't, then #### goes downhill fast), the more the better.  @Sand Are you sure about that $21B number? Where'd you get it from? I just read through their financials trying to get a better understanding.

So their net income this quarter was $129MM and their total net income for the year will be roughly $500MM. At 0% interest, with no more rising costs, they can be debt free by the year 2059 :excited:  This screams buy to me and the 200 P/E will absolutely be justified within the next 30-40 years (assuming no interest, no recessions, and everything goes perfectly). Time Warner Cable on the other hand, with a P/E of 18 was purchased at a slight multiple of 20 P/E by AT&T. 

I've already greatly reduced my exposure and have a healthy amount of cash parked, I'm debating moving to all cash... Sure, I can miss out on 2 more years of madness and overpaying, but the crash will be epic whenever we do get our next black swan. 

 
fantasycurse42 said:
Re NFLX: my debt theories above apply here too - I'm convinced the market loves debt (until it doesn't, then #### goes downhill fast), the more the better.  @Sand Are you sure about that $21B number? Where'd you get it from? I just read through their financials trying to get a better understanding.
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Heard it on CNBC this morning.  That's the number I remember, anyway.

 
Walking Boot said:
:nerd:

TWC was bought by Spectrum (Charter Communications). Turner/Time-Warner is the broadcaster/movie studio in the midst of acquisition by AT&T. The cable company was spun off of AOL/Turner/Time-Warner some time ago.

I don't really get Netflix. They're valued higher than FOX, CBS, and Viacom combined. Of course, I'm just bitter that I sold waaaay to early.
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Sorry, this was the acquisition I was referring to.

 
General Malaise said:
We had a meeting this morning to discuss the new article we were writing for a global newsletter publication on cobalt and nickel; would have been our fourth article about lithium-ion battery materials and the penetration of EVs to the global auto market.  Would have been our 15th article since 2004, back when we were pimping uranium.  Has been a great source of marketing for us.  Note the past tense here.  See below.  What the mother ####, Faber????
 

Anybody know a newsletter service with global distribution that might want a timely article on raw materials for the lithium-ion battery space?  Asking for a friend.... :oldunsure:
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I would, um, like to subscribe?  To your... news... letter.  I guess. 

Seems RL has caught up to art and sarcasm around here.  Probably really time to shut it down.

 
General Malaise said:
We had a meeting this morning to discuss the new article we were writing for a global newsletter publication on cobalt and nickel; would have been our fourth article about lithium-ion battery materials and the penetration of EVs to the global auto market.  Would have been our 15th article since 2004, back when we were pimping uranium.  Has been a great source of marketing for us.  Note the past tense here.  See below.  What the mother ####, Faber????
 

Anybody know a newsletter service with global distribution that might want a timely article on raw materials for the lithium-ion battery space?  Asking for a friend.... :oldunsure:
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I wonder if Faber didn't know or just forgot that Zimbabwe was one of the richest African countries until Mugabe gutted the place?  The same can be said for Venezuela.

Anyway, back onto stocks I'm :excited:  about CVX.  Broke 120!  Hadn't been there in quite a while.

 
fantasycurse42 said:
Tesla is a great company, unannounced non-performance related layoffs (most likely no severance packages) during a high growth time - this is def the kind of PR that brings in the top talent, which I'd think is a necessity in a very crowded space. 

Re NFLX: my debt theories above apply here too - I'm convinced the market loves debt (until it doesn't, then #### goes downhill fast), the more the better.  @Sand Are you sure about that $21B number? Where'd you get it from? I just read through their financials trying to get a better understanding.

So their net income this quarter was $129MM and their total net income for the year will be roughly $500MM. At 0% interest, with no more rising costs, they can be debt free by the year 2059 :excited:  This screams buy to me and the 200 P/E will absolutely be justified within the next 30-40 years (assuming no interest, no recessions, and everything goes perfectly). Time Warner Cable on the other hand, with a P/E of 18 was purchased at a slight multiple of 20 P/E by AT&T. 

I've already greatly reduced my exposure and have a healthy amount of cash parked, I'm debating moving to all cash... Sure, I can miss out on 2 more years of madness and overpaying, but the crash will be epic whenever we do get our next black swan. 
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They only have $4bn+ in debt. They have another $17bn in streaming obligations so they were probably adding those two numbers up. Add on the $7-$8bn or content spend next year. 

Its a self fulfilling prophecy at this point until it's not. Equity holders love that they can raise debt. Debt holders love the equity cushion. 

There may be an m&a floor here but there's a long way to fall for equity holders in that case. 

 
fantasycurse42 said:
Reading about a suspected arsonist in the California fires, anyone have details? Looking to buy afterhours heavy if I can find some.
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Breitbart and Infowars blaming an undocumented immigrant.  Sooooo, make of that what you will.

http://www.sacbee.com/news/state/california/fires/article179322896.html

The websites cited a story in the Santa Rosa Press Democrat about the arrest. That story does not link Gonzalez to any of the fires that broke out in the middle of the night on Oct. 8, some of them hours away in Mendocino and Yuba counties.

Gonzales was arrested at Maxwell Farms Regional Park in Sonoma on Sunday afternoon after he was seen leaving a creek bed with a plume of smoke rising behind him, Giordano said.

The fire was so small a responding sheriff’s deputy was able to mostly put it out before firefighters arrived, according to the Press Democrat. Gonzales, who was reportedly wearing a trench coat, was carrying a lighter and fire extinguisher, Giordano said.

Gonzalez often sleeps in the park and is well-known to law enforcement, Giordano said.

“They asked him if he started the fire, and he said he started the fire to warm himself up,” Giordano said.

There’s no evidence linking him to any other fires, whose cause remains under investigation, Giordano said.
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So budget and tax reform voting starts soon. I feel like Trump's tax plan is already baked into valuations so I'm not expecting a bump if it passes. On the flip side, a failure (and Trump seems to be good at failing) could be the catalyst for the correction many are expecting so I'm taking some money out of the market. Anyone else share this philosophy or am I all wet? I've been wrong a lot about this market, skeptical since day 1 of his reign, so you may want to do the opposite.

 
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pecorino said:
So budget and tax reform voting starts soon. I feel like Trump's tax plan is already baked into valuations so I'm not expecting a bump if it passes. On the flip side, a failure (and Trump seems to be good at failing) could be the catalyst for the correction many are expecting so I'm taking some money out of the market. Anyone else share this philosophy or am I all wet? I've been wrong a lot about this market, skeptical since day 1 of his reign, so you may want to do the opposite.
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I feel like every imaginable piece of good news is baked into this market (and absolutely no negative possibilities are being considered), however that doesn't mean it can't stay irrational. 

Every new milestone (like 23k today), I shift more to cash... The bull can keep running for who knows how long, but the death of this bull will be super ugly.

 
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