The Bull Case For Oil

This is a great hour long discussion on oil Q3 2019 hedge fund letters, conferences and more lalabell68 / Pixabay We here at ValuePlays have been bullish on oil for the past year or so. Much of the reasoning we’ve given is also in this presentation (plus a lot more).

Not All Markets Are Equal

“Davidson” submits: Q3 2019 hedge fund letters, conferences and more Not all markets are equal. Advisors typically recommend that investors balance portfolios globally. Now that sufficient history is available one needs to question this routine recommendation. Market history from 2008’s ‘Great Recession’ is instructive. Intl Markets as represented by the MSCI...

S&P 500 Intrinsic Value Index Update

“Davidson” submits: Q3 2019 hedge fund letters, conferences and more The Dallas Fed reported the 12mo Trimmed Mean PCE at 2.00%, revised lower from the 2.06% Oct report. Inflation has remained close to or at 2% since 2011. The SP500 priced at $3,150 this morning reflects a premium of 32% to...

You Can Ignore The Rig Count Decline

When rig counts have fallen ~25% and your still producing record amounts of oil, a weekly decline of a few rigs is meaningless Q3 2019 hedge fund letters, conferences and more “Davidson” submits: In the face of a 25% fall in the Baker Hughes/GE Rig Count, US Crude Production rises to 12.9mil...

Chemical Barometer Revised Higher

“Davidson” submits: Q3 2019 hedge fund letters, conferences and more The Chemical Activity Barometer(CAB) reported 122.45 with positive revisions for past 3mos. The CAB reflects industrial weakness due to recent strong US$ as capital leaves China in response to US tariff initiatives. Job Openings indicate that this series is more closely...

Mortgage Lending Continues to Evolve

“Davidson submits: Q3 2019 hedge fund letters, conferences and more Identifying the evolving policy shifts with the US Housing market is important in anticipating the impact to economic activity. The MCAI Index(Mortgage Credit Availability Index) introduced in 2012 with inception date of Jan 2004 captures the impact of the Sub-prime lending...

S&P Intrinsic Value Index

“Davidson” submits: Q3 2019 hedge fund letters, conferences and more US Household Survey reported a rise of 241,000 while vehicle sales estimates appear to be holding steady. Real Personal Income recorded a new high. The Dallas Fed reported the 12mo Trimmed Mean PCE at 2.06% which showed a revised and slightly...

PG&E Liquidation Value

So, I got a question on PG&E on today’s podcast and gave my two cents on it. Q3 2019 hedge fund letters, conferences and more I am also attending the Distressed Investing Conference on December 2nd in NYC that Peter Chapman is putting on. annca / Pixabay These conferences are amazing and the...

Inverted No More

“Davidson” submits: Q3 2019 hedge fund letters, conferences and more Daily details matter, especially during periods of shifting market psychology. Inversion in the T-Bill/10yr Treasury rates occurred May 2019 after a tumultuous period of rapidly falling 10yr Treasury rates beginning Nov 2018 with the onset of the Chinese attempt to take...

People Don’t Recognize De-Regulation IS Fiscal Stimulus

“Davidson” submits: Q3 2019 hedge fund letters, conferences and more Follow up-many call for fiscal stimulus, i.e. govt spending on infrastructure. Not recognized is that regulation reduction costs nothing and has a significant positive fiscal stimulus that lasts years. Economic indicators continue to confound those expecting a recession simply because we have...

Household Survey Employment Adds 391,000, Vehicle SAAR 17.23M Units

“Davidson” submits: Q2 hedge fund letters, conference, scoops etc The Household Survey Employment adds 391,000 and Light Weight Vehicle SAAR is reported to be 17.23 mil units. CNBC called this “…terrible” and “…a mealy peach of a report, not great”. The data shows continuation of the employment trend since 2009. With...

S&P 500 Intrinsic Value Index Update

“Davidson” submits: Q2 hedge fund letters, conference, scoops etc It is useful to note that the Value Investor Index does not adjust  w/rates. It is based on long-term SP500 EPS and the Natural Rate(based on long-term economic fundamentals). The Natural Rate is based on the long-term Real Private GDP trend and...

Data vs Perception

“Davidson” submits: Q2 hedge fund letters, conference, scoops etc Investing is the task of separating misperception from fact and market psychology from business and economic fundamentals. The goal is to ascertain when the market psychology of a misinformed consensus differs enough from economic and business trends to provide investment opportunity. The...

Rate Cut? History suggests no cut!

“Davidson” submits: Q2 hedge fund letters, conference, scoops etc A rate cut from the Fed is widely expected. Many believe the US has entered a recession and that rate action by the Fed is required. History suggests no cut!. The first observation one can make is that the Fed’s history of rate...

PMI (Sentiment) vs CAB (Data): The Impact Of Market Psychology

“Davidson” submits: Q2 hedge fund letters, conference, scoops etc Many take the PMI as a measure of manufacturing activity when it is in fact a survey of manufacturer psychology. The CAB is mostly hard data measures of economic activity but does include chemical producer equity prices which shift with market psychology....

Employment, Vehicle Sales, Real Personal Income & The S&P Value Index

“Davidson” submits: Q2 hedge fund letters, conference, scoops etc Household Survey Employment grew 590,000, far above the 130,000 reported by the Establishment Survey. The Household report, a statistical survey, covers self-employed while the Establishment report, from established payrolls, does not. What matters most is the trend. The Establishment reports are routinely...

Higher Oil = Higher Equity Prices

“Davidson” submits: Q2 hedge fund letters, conference, scoops etc Highlights: US Crude Inventories 25.7mil BBL below 5yr mov avg. Tied to algorithms and believed to be a sign of economic strength/weakness, current trend suggest a marked shift to positive market psychology. Economic strength has continued on trend since 2009 with the...

Recession Caterwauling Increases

“Davidson” submits: Q2 hedge fund letters, conference, scoops etc You may have noticed that it seems that every pundit is forecasting recession claiming to see all the signs of economic weakness. It seems they have ignored record employment, record retail sales and record personal income with no changes in trends from...

E&P Activity At A High, E&P Efficiency Slows

The new pipeline capacity will cause WTI to rise as shipping costs are lowered materially. Q2 hedge fund letters, conference, scoops etc Davidson submits: E&P Activity at a high, E&P Efficiency stalls a little. The data for these indices have a 2mo lag. Key to this data is the recent stall in...

Wealth Shaming

“Davidson” submits: Q2 hedge fund letters, conference, scoops etc Maklay62 / Pixabay These are some thoughts on a topic I have been learning the past couple of years. We have developed a political class in this country that has acted to give away wealth and in the process made themselves wealthy. The...

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