Sunday, May 31, 2015

Drinks with the Dragon, Session 2

Hey, how are you guys doing? No, I didn’t forget about you. I couldn’t really think of anything to write, so I decided to just do another “Drinks with the Dragon” post just to shoot the shit on some investing as well as personal stuff. I’ve been tied up trying to write a professional report (no using of the word bitch, fuck, shit, cunt or Mexican sticky balls) on Northern Oil & Gas, one of the Greedy Dragon portfolio’s positions. I plan to use that report to showcase my ability as an analyst to my potential employers. Hopefully the person in charge of reviewing the job applications actually bothers to read my work. I thought of just putting a link to my blog in my CV, but I think my blog is a little too gangsta for the corporate world. I will post my research on some document sharing site when I’m done so that you guys can check it out, if you want. I know I’ve mentioned that I wanted to get a job for quite some time now, but the fucking wound under my foot took fucking forever to heal up. The wound is much better now. It stopped discharging pus, so I don’t have to worry stinking up the office. I plan to send out my job applications at the end of June. I still have a lot of fat to work off. After all, one reason I wanted to get a job is to get out of the house and find a nice girl to date. I can’t really do that if I look morbidly obese. A Grand Prix for a card game I play (Magic: The Gathering) is also taking place in Singapore at the end of June, and I want to get my geek on and have a fucking good time before starting work.

Update on the Greedy Dragon portfolio: I recently added to my position in Natural Resource Partners. Please do your own research before investing in anything.   

Shale oil stocks have taken an absolute beating recently because of a presentation by David Einhorn (in my opinion, one of the best investors in the world) and horrendous Q1 earnings reports. I can’t really remember all of what Einhorn said, so I won’t try to refute him. The points I’m going to make isn’t directed at him, I’m just saying stuff just to say stuff. I don’t think you can just look at the depletion, depreciation and amortization numbers of shale oil producers and conclude they’re not viable investments. The cost of drilling wells has come down significantly and the estimated ultimate recovery of new wells has gone up significantly as well. Investors should of, of course, exercise prudence when attempting to figure out a shale oil company’s cost to develop its reserves. Shale oil producers may have also overpaid to lease acreage in the past, but that should be treated as a sunken cost. I will admit that my oil investments seem riskier than I initially thought after reading their Q1 results. I should really reevaluate those positions soon.


Coal stocks have also been hit pretty badly recently. I invested in a coal stock which I knew from the start would be one of my riskier investments. Now, I don’t regret investing in it as I knew that I could make a lot of money if it survived this downturn. Where I fucked up is investing too much money in this stock. I had an unspoken rule to never allocate more than 5% of my portfolio to riskier investments. I went full retard and put about 15% of my portfolio in investments that I deemed to be riskier. I believe my investment in one of these positions has already been permanently impaired (not the coal company, although it might if coal prices remain weak for a prolonged period of time). I will try to de-risk my portfolio whenever I can find the opportunity to do so. Maybe even realize some losses, which I fully deserve. Anyway, thank you for reading. Take care and stay rational. 

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