Money flows & 'kith & kin'
Firn you referred and I cite in part:
Quote:
His story has been repeated in recent times all over the developed world, where immigrants support their relatives living still in developing countries.
This economic aspect of 'kith & kin' has pooped up before; there is a thread on the population and political aspects of 'kith & kin' on:http://council.smallwarsjournal.com/...ead.php?t=8829
In the latest issue of the RUSI Journal Dr. Jonathan Eyal, a political analyst, has an article 'The EU's Alternative Futures' amidst the generally grim prose was this surprise:
Quote:
..the better educated from the poor EU states will migrate outside Europe altogether; the flow has already started from Spain to Latin America and from Portugal to its former colonies of Brazil, Angola and Mozambique.
The Portuguese aspect puzzled me, having visited a 'new town' built after 1974 in northern Portugal to accommodate the refugees from Angola and Mozambique. Given the manner in which those refugees left, it is noteworthy others are now prepared to return.
Developing profitable investment theses...
...is pretty tough. The market rewards and punishes and i have been on both sides of this type of education :D :eek:
Quote:
Originally Posted by
Firn
I do this stuff with small notes and mental number crunching, however I made four key prediction about YPF which all were dead wrong:
1) I believed that Kirchner&Co had learned from the poor performance of their nationalized Aerolneas Argentinas. If not:
2) Price controls and the weak peso created their negative energy balance, by reducing the incentives to invest and making imports more expensive, not Repsol per se. If not:
3) I assumed that they would pay for the shares like they did with Aerolinas. If not:
4) At least it would be only roughly 25% of YPF gone. It never crossed my mind that they would just take the shares from Repsol, leaving the other shareholders unharmed.
So it pretty much went perfectly wrong and the safety margin has completely gone :D
Thanks for sharing your investment thesis, good learning/practice for how to develop investment them.
The Spanish company Repsol YPF SA (company website) is familiar to me via my travels and through their sponsorship of "Doctor" Valentino Rossi (while puttering around on my motorcycles i dream :wry: ) and I am aware that Repsol took over Argentina's YPF in 1999; so let's see if we can add some background to your thesis via a quick (free time is tight) internet drive-by?
Oil Overview
There are apparently eight oil refineries in Argentina with a capacity of 625,165 barrels per day. With today's FT's report of Brent at $119.83 USD, and wrongly assuming 100% operational output, that works out to potential daily sales of $74,913.521.95 USD before labor, material, equipment, overhead, and profit costs. Repsol-YPF owns three of these refineries (La Plata, Luja'n de Cuyo, and Plaza Huincul - startup date 1919) with the potential for 331,690 barrels per day and potential daily sales (not including costs) of $39,746.412.70 USD. 'Proved' Argentinian oil reserves are estimated at 2.5 billion barrels in size, while shale oil reserves are estimated at an additional 150 million barrels and there is a report of a discovery called Vaca Muerta, which may hold 927 million barrels. This information is of interest when attempting to forecast future YPF revenues due to oil. With the 100 day moving average currently at $116.40, and the 200 day moving average at $113.60, Javier Blas of the FT forecasts that between seasonal maintenance of refineries, price differences between crude oil grades, and futures contracts any falls in oil prices will be short lived.
- Support for oil prices weakens – for now, By Javier Blas, Commodities Editor, April 20, 2012 10:29 am, Financial Times, www.ft.com
Natural Gas Overview
Argentina's substantial natural gas reserves are estimated at 13.4 trillion cubic feet (Tcf) and 774 Tcf of shale gas. YPF competes with Total Austral, CNOOC-affiliate Pan American Energy, Petrobras (Brazil), Pluspetrol (Argentina), Tecpetrol (Argentina), and Apache Energy (U.S.) for natural gas.
Political Risk Overview
Ms Fernandez' appears to be interested in achieving national self-sufficiency in oil and gas production, and it was claimed that Repsol YPF SA did not reinvest enough of its YPF profits to boost Argentinian production. By circumventing rule of law issues via nationalization she invites an international backlash...whose scope, breadth, and composition remains to be seen and which could potentially harm a weak nation still recovering from a financial meltdown in 2003.
The Expropriation Law will apparently be used to determine how to compensate Repsol for the loss of it's 51% stake in YPF.
- Argentina risk: Alert - YPF's expropriation fuels investor concerns, April 18th 2012, Economist Intelligence Unit, www.eiu.com
Technical Overview
Repsol [ REP.MC (Madrid), REP.BA (Buenos Aires) ] stock data in Euro (and as of 27 April 2012) includes a 52 week high of 24.23, 52 week low of 13.92, April 27th 2012 close at 14.70, a tangible book value of 12.90, a 7.5% dividend paid on January 10th 2012, and a beta of 0.9876 as compared to the IBEX 35 Composite Index.
I usually download stock data via google and interrogate the heck out of it via excel...however, no joy with google (i can only find data for the ADR) and i am presently unaware of how to ask the FT interactive chart to reveal the 15 day, 50 day, 100 day, 200 day, and 252 day moving average for share price and volumes....hints would be appreciated.
Bread & Circuses vs Means of Production
99% vs 1%? Growth vs Austerity?
EU to Show Flexibility on Budget-Deficit Rules, Rehn Says, By Jones Hayden - May 5, 2012 1:29 PM MT, Bloomberg News
Quote:
European Union Economic and Monetary Affairs Commissioner Olli Rehn indicated the EU would show flexibility in enforcing the bloc’s deficit rules as nations across the region struggle to spur growth as they cut debt.
Hollande supporters confident of victory, By Ben Hall and Hugh Carnegy in Paris, Last updated: May 6, 2012 6:52 pm, Financial Times, www.ft.com
Quote:
Exuberant crowds anticipating victory for François Hollande in France’s presidential election gathered outside socialist party headquarters in Paris, confident that he had defeated President Nicolas Sarkozy’s in Sunday’s run-off vote.
The Hollande camp had already begun making preparations for a celebration in the Place de la Bastille in eastern Paris.
Hollande zum neuen Präsidenten Frankreichs gewählt, EILMELDUNG: Politik: 6. Mai 2012, 19:59, NZZ
Quote:
Linksrutsch in Frankreich: Erstmals seit 17 Jahren zieht mit François Hollande wieder ein Sozialist in den Elysée-Palast ein. Der 57-Jährige Herausforderer gewann klar die Stichwahl um das höchste Staatsamt. Amtsinhaber Nicolas Sarkozy musste sich geschlagen geben.
Hollande führt in den Umfragen, 06.05.2012, WirtschaftsWoche
Quote:
Der Sozialist François Hollande hat im Rennen um den Élysée-Palast laut ersten Wählernachfragen die Nase klar vor Amtsinhaber Nicolas Sarkozy: In Erhebungen von drei großen Instituten, über die der belgische Rundfunk RTBF am frühen Nachmittag auf seiner Internetseite berichtete, lag Hollande bei 52,5 bis 53 Prozent und damit fünf bis sechs Punkte in Führung.
Greek Exit Poll Casts Doubt on New Democracy, Pasok Majority, By Maria Petrakis and Natalie Weeks - May 6, 2012 11:55 AM MT, Bloomberg News
Quote:
Greek voters flocked to anti-bailout parties, an exit poll showed, throwing doubt on whether the two main parties, New Democracy and Pasok, can form a coalition to implement spending cuts to ensure the flow of bailout funds.
New Democracy led in the election today, receiving between 19 percent and 20.5 percent of the vote, an exit poll by Alco for state broadcaster NET TV forecast. Anti-bailout party Syriza got between 15.5 percent and 17 percent, according to the exit poll. Pro-bailout socialist Pasok got between 13 percent and 14 percent. Independent Greeks, a new anti-bailout party, could get as much as 11 percent of the vote.
“Greece needed this election like it needed a hole in the head,” Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, said in an e-mailed note. “The exit polls confirm what has been patently clear for some time: there’s no political consensus for the kind of reforms that Greece must implement if it wants to remain in the euro zone.”
Corriere della Sera > Politica > Elezioni Amministrative
So will Monsieur Francois Hollande follow his hero Francois Mitterrand's playbook and nationalize the banks? :eek: :wry: We will see...
Loi de nationalisation du 13 février 1982, by Wikipedia
Quote:
Les entreprises concernées sont indemnisées à hauteur de 39 milliards de francs. La loi concerne les secteurs et entreprises suivantes