My natural gas & LNG presentation at 2012 Vail ValueX Conference

Embedded below is my presentation at Vail ValueX on some aspects of the North American natural gas market and how LNG (liquefied natural gas) exports may close the worldwide pricing differential.

Dislaimer: I do discuss some economic winners and losers in this presentation. I own a few of them but I'm not going to tell you which ones.  As an investor you should make your own decisions about what to own and I don't know your risk profile or need for current income, etc.


The topics of natural gas and LNG exports are very large and compressing it down to 15 minutes was a challenge.  I could only present the major factors I see driving price differentials.

The full list of presentations can be found at the Vail ValueX hosts' Scribd site: http://www.scribd.com/VitaliyKatsenelson


ValueXVail 2012 - Greg Merrill

Jim Chanos' notes from 2012 Vail ValueX Conference

I had the pleasure of attending the 2012 Vail ValueX conference hosted by Vitaliy Katsenelson http://contrarianedge.com/valuex-vail/
While I will write more about my impressions here's a link to Jim Chanos'  notes.

VALUExVail 2012 - James Chanos


The rest of the presentations are available here -  http://www.scribd.com/VitaliyKatsenelson

Chinese slowdown hits iron ore prices

Getting accurate data regarding economic activity in the Middle Kingdom is always difficult. I've blogged about it before and have grown to look at circumstantial indicators for clues as to what's happening in there. Mr Chovanec and Soberlook are two blogs who've been writing about evidence of a slowdown for some time now.  

One of those indicators is sliding back down again and is close to the panic lows of last fall. Iron Ore prices did not bounce much from the October lows and are now inching downward again.

News of the Chinese refusing to purchase previously ordered cargoes of Iron Ore and Coal is additional data supporting the slowdown thesis.  A serious slowdown in China would not bode well for the world economy considering Europe's problems as well.  Keep an eye on Iron prices. If they fall through the October floor I'd be cautious.

Thou shalt not use market orders. Example #12,538

Repeat after me, thou shalt not use market orders.  

Today the equity markets are a bit queasy and US Treasury bonds are rising.  As I scanned my list of holdings to see how the markets are responding I notice something unusual.  VGIT, the Vanguard 5-10 year Treasury bond ETF shot up more than 40% right at the open and then fell back down to nearly the previous day's close.

Instant massive loss on a 'safe' investment, most likely from putting in a market order right before the opening bell.

VGIT is a less liquid ETF but this is ridiculous.  Less than 900 shares traded on this massive spike upward; it doesn't take a lot of volume to move a thinly traded stock or ETF and yes, even ETF's can go illiquid..

A very bad day for someone. 

Please don't use market orders when placing orders!    Look at the current bid/ask and the shares available at those prices.   Limit orders are a much safer way to go even if you really need to move a position in or out.  If you don't know the difference between a market and limit order please find out before you do any more transactions..

Disclosure: Long VGIT in some client accounts


Wikipedia entry on order types

edit: Upon re-reading I failed to accentuate when you don't use market orders.
Please don't use market orders when placing orders on thinly traded stocks or at the open
If you are buying 100 shares of Apple it's not going to make a difference. If selling something near the opening bell, wait a few seconds and see what the market looks like. 


edit 2: The price action on Facebook's opening day is another good example of incorrectly using market orders. The blog entry here: http://www.ritholtz.com/blog/2012/05/this-is-why-you-use-a-limit-order/ shows the brutal reality of those who all bought Facebook at the open immediately losing money.

This post deserves a rewrite as I flubbed up my point but regulators freak out when you 'change something' without proper documentation of the original.  I'll let my errors stand as a reminder to myself and I'm not going to expend the effort of keeping a copy of the original stored someplace for eternity.

A free file sharing virtual hard drive on the cloud -- Dropbox

While there are other competing services out there from Microsoft and Google I like this companies' offering for its simplicity and ability to share folders and files with specific friends or the public at large.

In short, you download a program and create a folder (originally called Dropbox, but you can change the name and location) on your hard drive. Anything you place in this folder is uploaded to the cloud and stored in a virtual location. Now comes the fun part. You download the software on another machine and kaboom, Dropbox automatically syncs the two folders. You place a file in the Dropbox folder on your home machine and it is automatically synced with your work machine.  You can control the bandwidth allocated to the Dropbox app if you are concerned about it hogging all your resources if needed.

It gets better:

• You can share certain sub directories with specific people and there is also a Public directory so you can share files with the general public.  Their blog reports they are rolling out an auto archive capability of all your photos and video on your smart phone.
• They keep revisions of all your files for 30 days. If someone screws up a file or mis crops a photo, no problem, roll back the file! 
• It's free with 2GB of storage. They sell very large plans (up to Terabyte + sized!) if you are needing something more. 

You can download the free software here.
(I get an increase in my free storage space allocation if you use their software through that link, but that is the extent of my compensation from Dropbox)

I don't put my business data on Dropbox as I'm a bit concerned about security but for pictures, company research I'm doing at home, etc it is a great way to move files about. Several years ago I spent a lot of time and effort maintaining something similar at a small business and it was a pain in the ass that never quite worked right.

 It's a testament to the blinding pace of technological progress that a company now provides the same service in a much faster and easier format, for free.

Natural Gas followup

A few days ago I blogged about natural gas and how we could have problems storing it all. The WSJ recently posted a video on this very topic:

Chesapeake Energy (CHK) would not be in the news as much if the price of natural gas wasn't so low.  Amazing how you only find out about the problems after the crisis occurs.... hmmmm

Considering the drubbing stocks have taken in this sector I am researching this area. These low nat gas prices will not last forever.

Hugh Hendry coming out of hibernation -- Video at recent conference

Mr. Hugh Hendry of Eclectica appears to have come out of his self imposed social hibernation. Below is a video from the Milken Institute conference where he is part of a panel discussing Europe's problems.  It is a long video but I suggest you watch it.

While Mr. Hendry appears to be still very bearish about Europe I do agree with the person on his right that now is the time to start looking for opportunities. (note, I said LOOK)  With all their problems and low stock prices there must be some incredible buys amongst all the wreckage that European austerity is creating. I'm not suggesting you buy now but start doing your homework.  Anyone have any ideas? I'm open to suggestions.




Thanks Ft.com Alphaville blog

edit: Here's the details on the panel speakers
http://www.milkeninstitute.org/events/gcprogram.taf?function=detail&eventid=gc12&EvID=3566