The sweepstakes continue as we eagerly await the next marriage proposal. Oil is $42, gas is stubbornly not moving, and companies are running out of runway. Witness SM’s stock performance today after announcing their Q2 update. “Cost control” means crushing service companies and laying off staff. “Change in working capital” means a reduction in accruals due to dramatically lower spending, expanding the time to pay payables and receiving all the receivables. But when you don’t do things, your production declines,...

Do you remember when Exxon was the world’s largest publicly listed company? Can you imagine how your stock portfolio would have done if you’d sold it all and invested in AAPL? Or AMZN? Or MSFT? Those companies now have market caps of $1.5 T. Exxon was briefly over $500 B in 2007. It’s now $187 B. And thus begins our discussion on ESG. Commodity businesses rely on a global price driven by all sorts of supply-demand factors and when supply...

The earnings onslaught continued yesterday and into this morning, and I think some of the writers in IR should train doctors on bedside manner. With the exception of TAFKAEncana, the glorious writing highlighting accomplishments made it hard to think that anything bad had happened. Reading some of the upgrade analyst reports, you would say “wow, these companies have really turned it around.” But that’s the advantage of putting your money where your mouth is. Seeing where some of the companies...

The artist formerly known as Encana announced its Q2 earnings and I give them some credit.  Sure, they went with the “Q2 was unprecedented, we are in this together, so proud of everyone, yada yada yada...” but, they also said this: The Company recorded a net loss in the second quarter of $4.4 billion. Results were impacted by the following items: A non-cash ceiling test impairment of $3,250 million, before-tax, primarily related to the decline in 12-month average trailing commodity...

I remember early in my career, post the Pan Canadian / AEC merger in 2002, some investment bankers said “You should let investors choose whether they want oil or gas exposure. You should be a pure play!” (I’m not sure of the exact wording but I know the fees were high for such sage advice). Thus, Encana and Cenovus were born, one ring to rule the gas world and one to rule the oil. Oops. NG prices crashed very...

This is a big week for earnings in oil and gas land. And sure, if you follow companies outside of E&P, earnings don’t seem to matter, free cash flow isn’t really a thing and stocks go up and to the right everyday (partly because the USD was depreciated 4% in July alone and there is literally no safe place to put your money as inflation eats the value). But, in the world of E&P, where the top line is solely...

Today, I am joined by Harris Kupperman, hedge fund manager and author of the newsletter “Adventures in Capitalism”.  And boy.... are they adventures. Tesla? Home builders? Sectors we both wish we’d never heard of and tankers.  Plus - what advice he’d give himself after graduating with a history degree. If you liked the Josh Young and Billy Bailey episodes, you aren’t going to want to miss this one. #hottakeoftheday podcast Episode 58 w/Harris Kupperman https://youtu.be/fK6Bhur9gBI   Audio Podcast   About Kuppy Harris Kupperman is the founder...

“If the school is closed, the money should follow the student so the parents and families are in control of their own decisions,” Trump said. “So I would like the money to go to the parents of the student.” It’s the best idea I’ve heard. I strongly support public schools but I support students more. They are the future. And if school administrators are electing that children should stay home, the money that usually follows kids into schools should follow...

What if I told you a family (a mother and three children) went down to Pepsi center to get the coronavirus test, checked in but 3 hours later still didn’t have the test and said “F this, curiosity is neat but this is super dumb” and left without taking the test? Amazingly, the entire family got the lab results: positive for the coronavirus... yes, it was pointed out they never actually took the test. What if I told you that...

The inflation trade is on. Silver up 7% today and 15% this week. Platinum up 4%. Gold another 2%. Oil - even after bearish gasoline, distillate and inventory report, is flat and should be down in the 30's. The market is up. Interest rates are 0, and there has never been such a disconnect between employment, wages, real inflation and Wall Street. It’s hard to watch because the decision has been made by politicians (many in their 70s) to inflate house...