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  • Re: Business, Economics, and Taxes: Capitalism. Yay? >=(

    Playing the Futures was how Southwest made their mark. If I remember the story they bought when oil was undervalued and bought in such quantity that they could fly for years on cheaper prices. They hedged and bought contracts in the $50 range and as prices spiked and everyone else was paying nearer to market value they were cleaning up. That was how they were able to keep prices down.
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    • Re: Business, Economics, and Taxes: Capitalism. Yay? >=(

      Originally posted by Handyman View Post
      Playing the Futures was how Southwest made their mark.
      That was the corporate strategy. The marketing strategy was a little different...

      Comment


      • Re: Business, Economics, and Taxes: Capitalism. Yay? >=(

        That sound you hear is Alaska’s economy going fully into the tank...
        U-A-A!!!Go!Go!GreenandGold!
        Applejack Tells You How UAA Is Doing...
        I spell Failure with UAF

        Originally posted by UAFIceAngel
        But let's be real...There are 40 some other teams and only two alaskan teams...the day one of us wins something big will be the day I transfer to UAA
        Originally posted by Doyle Woody
        Best sign by a visting Seawolf fan Friday went to a young man who held up a piece of white poster board that read: "YOU CAN'T SPELL FAILURE WITHOUT UAF."

        Comment


        • Re: Business, Economics, and Taxes: Capitalism. Yay? >=(

          Originally posted by Jimjamesak View Post
          That sound you hear is Alaska’s economy going fully into the tank...
          Dunleavy is going to end up cutting both of your programs.

          Comment


          • Re: Business, Economics, and Taxes: Capitalism. Yay? >=(

            Originally posted by FadeToBlack&Gold View Post
            Dunleavy is going to end up cutting both of your programs.
            At this point I'm more concerned if my daughter will actually have a teacher.
            U-A-A!!!Go!Go!GreenandGold!
            Applejack Tells You How UAA Is Doing...
            I spell Failure with UAF

            Originally posted by UAFIceAngel
            But let's be real...There are 40 some other teams and only two alaskan teams...the day one of us wins something big will be the day I transfer to UAA
            Originally posted by Doyle Woody
            Best sign by a visting Seawolf fan Friday went to a young man who held up a piece of white poster board that read: "YOU CAN'T SPELL FAILURE WITHOUT UAF."

            Comment


            • Re: Business, Economics, and Taxes: Capitalism. Yay? >=(

              Originally posted by dxmnkd316 View Post
              It took me a few moments to see what you did there. Interesting play. I was talking over stocks with Mrs. 316 yesterday wondering if there's other plays out there. Take tire companies. 2020 might be fine for them, but consider the fact that automobile transportation is down what? probably somewhere between 20-75% depending on how you look at it. I can't imagine they're going to have a good 2021.

              Jim Cramer, yeah I know, once made an interesting comment about how to look for opportunities. I can't remember exactly when it was (03-06, or near peak in 08) he said that you shouldn't be looking at the oil companies for stocks. You should be looking at companies that manufacture railcars and the railroad companies themselves. Look for secondary and tertiary plays. You'll get beat by the good traders, but you'll be out in front of the average person looking to make a buck.

              And to bring it full circle, I know Buffet bought huge stakes in the rail companies a while back. I remember reading something that indicated he was making a play on mineral rights since the railroads own most of the mineral rights in the nation. I'm not sure if mineral rights include oil, but that could be an interesting combo for Berkshire.
              I know dx knows who I work for, we had a minor dip (less than 10% in the past couple months) and now we're back to the early March level.

              I'd look at the slow growth companies that are selling all the stuff that the front-liners/businesses need to operate. There is no quick buck to be made there, but it's a solid investment long-term.
              Never really developed a taste for tequila. Kind of hard to understand how you make a drink out of something that sharp, inhospitable. Now, bourbon is easy to understand.
              Tastes like a warm summer day. -Raylan Givens

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              • Re: Business, Economics, and Taxes: Capitalism. Yay? >=(

                Originally posted by Jimjamesak View Post
                That sound you hear is Alaska’s economy going fully into the tank...
                June oil was still in the 20s. I know that’s not ideal, but it’s not a disaster, yet. There’s some worry about he value of the oil, but no ones sure how May will play out.
                Code:
                As of 9/21/10:         As of 9/13/10:
                College Hockey 6       College Football 0
                BTHC 4                 WCHA FC:  1
                Originally posted by SanTropez
                May your paint thinner run dry and the fleas of a thousand camels infest your dead deer.
                Originally posted by bigblue_dl
                I don't even know how to classify magic vagina smoke babies..
                Originally posted by Kepler
                When the giraffes start building radio telescopes they can join too.
                He's probably going to be a superstar but that man has more baggage than North West

                Comment


                • Re: Business, Economics, and Taxes: Capitalism. Yay? >=(

                  Originally posted by dxmnkd316 View Post
                  June oil was still in the 20s. I know that’s not ideal, but it’s not a disaster, yet. There’s some worry about he value of the oil, but no ones sure how May will play out.
                  Interesting that while the May contracts sh-t the bed the June contracts didn't slip a bit.

                  It isn't as if this is going to be over by June.
                  Cornell University
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                  • Originally posted by dxmnkd316 View Post
                    June oil was still in the 20s. I know that’s not ideal, but it’s not a disaster, yet. There’s some worry about he value of the oil, but no ones sure how May will play out.
                    Well, the other problem of this is that some North Slope oilfields are shutting down because of the virus so production is already down.
                    U-A-A!!!Go!Go!GreenandGold!
                    Applejack Tells You How UAA Is Doing...
                    I spell Failure with UAF

                    Originally posted by UAFIceAngel
                    But let's be real...There are 40 some other teams and only two alaskan teams...the day one of us wins something big will be the day I transfer to UAA
                    Originally posted by Doyle Woody
                    Best sign by a visting Seawolf fan Friday went to a young man who held up a piece of white poster board that read: "YOU CAN'T SPELL FAILURE WITHOUT UAF."

                    Comment


                    • Originally posted by The Rube View Post
                      I know dx knows who I work for, we had a minor dip (less than 10% in the past couple months) and now we're back to the early March level.

                      I'd look at the slow growth companies that are selling all the stuff that the front-liners/businesses need to operate. There is no quick buck to be made there, but it's a solid investment long-term.
                      This is what CNBC said, and it seems pretty obvious. To ride this roller coaster out, they recommend long term investing in the experienced companies that sell what people need AND have solid ledger books that will get them through this. Johnson and Johnson. Proctor and Gamble. Those types. The "old money" companies.
                      “Demolish the bridges behind you… then there is no choice but to build again.”

                      Live Radio from 100.3

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                      • Originally posted by Kepler View Post
                        Interesting that while the May contracts sh-t the bed the June contracts didn't slip a bit.

                        It isn't as if this is going to be over by June.
                        Spoke too soon. June contract shi**ing the bed currently.
                        “Demolish the bridges behind you… then there is no choice but to build again.”

                        Live Radio from 100.3

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                        • Re: Business, Economics, and Taxes: Capitalism. Yay? >=(

                          May expires today and is up to -4 for now.
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                          1966, 1986, 2007

                          Go Tigers, Go Packers, Go Red Wings, Go Pistons

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                          • Re: Business, Economics, and Taxes: Capitalism. Yay? >=(

                            Originally posted by Kepler View Post
                            Interesting that while the May contracts sh-t the bed the June contracts didn't slip a bit.

                            It isn't as if this is going to be over by June.
                            It's because it's localized to Cushing. There's no storage in Cushing to rent and other storage locations around the nation (and world!) are filling up. There's no place to store it. So in order to store it, you'd be forced to build a new API-certified tank with permits in a month. That would cost approximately $infinity so people are willing to dump the contract for anything less than that. (Joking aside, the cost would be transporting to another storage facility with "vacancy" and then paying the lease costs. I'm guessing that would have cost around, just ballparking, $35/barrel.) So people were basically required to dump the oil contracts so they didn't have to find a way to store the oil.

                            If you, Kepler, had a means to hook up, take delivery, transport, and store that oil, you could have sold it (even ignoring the delay until May 20) for about $20-$25/barrel and made $55-$60/barrel in the transaction. Taking out the pretend costs for transport and storage, you could have netted $20-$25/barrel.

                            From what I've read, a typical contract holder rolls the contract over to the next month. They usually do this by selling the oil contract to someone who can take delivery and then they take that money and buy the next month's contract. Usually this spread is measured in dimes. Yesterday it was measured in dollars. So that squeeze made it really hard to dump and roll over. Compounding that, the people who hold these contracts for most of the life are using it as a hedge (airlines, for example, buy these contracts to protect themselves against the cost of high fuel) or trying to make a profit (traders, hedge funds, etc.) Since hedge funds aren't known for their oil capital equipment, they were really eager to dump.
                            Code:
                            As of 9/21/10:         As of 9/13/10:
                            College Hockey 6       College Football 0
                            BTHC 4                 WCHA FC:  1
                            Originally posted by SanTropez
                            May your paint thinner run dry and the fleas of a thousand camels infest your dead deer.
                            Originally posted by bigblue_dl
                            I don't even know how to classify magic vagina smoke babies..
                            Originally posted by Kepler
                            When the giraffes start building radio telescopes they can join too.
                            He's probably going to be a superstar but that man has more baggage than North West

                            Comment


                            • Re: Business, Economics, and Taxes: Capitalism. Yay? >=(

                              Originally posted by Spartanforlife4 View Post
                              May expires today and is up to -4 for now.
                              That's creativity I'm guessing. Someone found creative ways to take delivery. Watch the news carefully for new oil spills. I wouldn't be shocked if someone literally burned it in one of the red states. Tinfoil hat rumors floating around that oil "spills" are going to dramatically increase as it's more profitable to take delivery and just dump it in the ocean.
                              Code:
                              As of 9/21/10:         As of 9/13/10:
                              College Hockey 6       College Football 0
                              BTHC 4                 WCHA FC:  1
                              Originally posted by SanTropez
                              May your paint thinner run dry and the fleas of a thousand camels infest your dead deer.
                              Originally posted by bigblue_dl
                              I don't even know how to classify magic vagina smoke babies..
                              Originally posted by Kepler
                              When the giraffes start building radio telescopes they can join too.
                              He's probably going to be a superstar but that man has more baggage than North West

                              Comment


                              • Re: Business, Economics, and Taxes: Capitalism. Yay? >=(

                                Originally posted by dxmnkd316 View Post
                                It's because it's localized to Cushing. There's no storage in Cushing to rent and other storage locations around the nation (and world!) are filling up. There's no place to store it. So in order to store it, you'd be forced to build a new API-certified tank with permits in a month. That would cost approximately $infinity so people are willing to dump the contract for anything less than that. (Joking aside, the cost would be transporting to another storage facility with "vacancy" and then paying the lease costs. I'm guessing that would have cost around, just ballparking, $35/barrel.) So people were basically required to dump the oil contracts so they didn't have to find a way to store the oil.

                                If you, Kepler, had a means to hook up, take delivery, transport, and store that oil, you could have sold it (even ignoring the delay until May 20) for about $20-$25/barrel and made $55-$60/barrel in the transaction. Taking out the pretend costs for transport and storage, you could have netted $20-$25/barrel.

                                From what I've read, a typical contract holder rolls the contract over to the next month. They usually do this by selling the oil contract to someone who can take delivery and then they take that money and buy the next month's contract. Usually this spread is measured in dimes. Yesterday it was measured in dollars. So that squeeze made it really hard to dump and roll over. Compounding that, the people who hold these contracts for most of the life are using it as a hedge (airlines, for example, buy these contracts to protect themselves against the cost of high fuel) or trying to make a profit (traders, hedge funds, etc.) Since hedge funds aren't known for their oil capital equipment, they were really eager to dump.
                                This whole explanation is fantastic. Thank you.

                                Also: consider being an econ professor. As a class, they are incapable of explaining anything, and you just nailed a difficult phenomenon in plain English with humor and brevity.
                                Cornell University
                                National Champion 1967, 1970
                                ECAC Champion 1967, 1968, 1969, 1970, 1973, 1980, 1986, 1996, 1997, 2003, 2005, 2010
                                Ivy League Champion 1966, 1967, 1968, 1969, 1970, 1971, 1972, 1973, 1977, 1978, 1983, 1984, 1985, 1996, 1997, 2002, 2003, 2004, 2005, 2012, 2014, 2018, 2019, 2020

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