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+21000 on the Dow

Discussions about the economic and financial ramifications of PEAK OIL

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Re: +21000 on the Dow

Unread postby Cog » Fri 31 Mar 2017, 17:34:12

A lot of money is going to be made by someone.

https://www.ft.com/content/27effca4-154 ... e067d5072c

Saudi Arabia has appointed banks to conduct preparatory work on the initial public offering of Saudi Aramco, the world’s largest oil producer, which is aiming to become the most valuable listed company. The state-controlled company has hired JPMorgan, Morgan Stanley and HSBC as financial advisers for the listing, said four people briefed on the matter.
Saudi Arabia is looking to sell as much as a 5 per cent stake in Saudi Aramco, in a listing that could value the company at $2tn, according to officials in the country.

Even if the company is worth just half of that amount it would still set a record for the amount raised in an IPO.
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Re: +21000 on the Dow

Unread postby onlooker » Fri 31 Mar 2017, 17:36:50

Cog wrote:A lot of money is going to be made by someone.

https://www.ft.com/content/27effca4-154 ... e067d5072c

Saudi Arabia has appointed banks to conduct preparatory work on the initial public offering of Saudi Aramco, the world’s largest oil producer, which is aiming to become the most valuable listed company. The state-controlled company has hired JPMorgan, Morgan Stanley and HSBC as financial advisers for the listing, said four people briefed on the matter.
Saudi Arabia is looking to sell as much as a 5 per cent stake in Saudi Aramco, in a listing that could value the company at $2tn, according to officials in the country.

Even if the company is worth just half of that amount it would still set a record for the amount raised in an IPO.

Will be interesting to see if investors balk or jump at this IPO.
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Re: +21000 on the Dow

Unread postby Cog » Fri 31 Mar 2017, 18:16:22

This is about the only IPO I've considered getting in on.
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Re: +21000 on the Dow

Unread postby Outcast_Searcher » Sun 02 Apr 2017, 13:12:02

Cog wrote:This is about the only IPO I've considered getting in on.

If you want to invest in oil because you think it's cheap, there are much safer ways.

If you want to speculate, have a great time, but bear in mind that IPO's are a much different beast than, say, an S&P 500 index fund as far as predictability.

Disclosure: I have absolutely no idea what the price of oil may do short or long term. There are just too many factors of all kinds out there, both short and long term to make this predictable, IMO.
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Re: +21000 on the Dow

Unread postby Cog » Sun 02 Apr 2017, 16:55:37

Speculative no doubt. I'm already invested in oil stock through XOM and BP mostly for dividends.

I have passed on IPO's in the past because I didn't trust their business model. Snapchat was a recent example. They haven't turned a profit ever, even before they went public.

But there will be a lot of money around this particular IPO and the Saudi's have every reason to boost its price up. The Saudi's also have some friends with a lot of money. So a little speculative play might be warranted. Would I accuse the Saudi's of stock manipulation? Well I certainly would hope so. ;)
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Re: +21000 on the Dow

Unread postby rockdoc123 » Sun 02 Apr 2017, 17:10:15

just guessing but I suspect a big part of the initial float on Aramco shares will be held by the large investment firms prior to opening on the market. If you have a relationship with those firms you might be able to get some amount of the IPO but I think this one is so popular it will likely only get distributed to their biggest clients. When the remaining float breaks on the market it will almost certainly be like Snapchat where the price is unreasonably high out of the gate and trades even higher throughout the day. After a very short while the arbs will jump in and drive the price back down to below what it came on the market for.
Of course this assumes the Saudis decide to puts lots and lots of shares on the market, if they decide instead to go with a more limited float and higher price/share then it could be pretty frantic for awhile. I tend never to invest in IPO's unless I have the inside track through an investment firm that has a piece of it before it starts trading. Trading once it is on the market is just too unpredictable and generally not driven by fundamentals.
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Re: +21000 on the Dow

Unread postby Cog » Mon 03 Apr 2017, 05:50:10

Since Aramco is a state owned company, which essentially means its owned by the Saudi royal family, its in their interest that as many institutions and individuals own this stock as possible. Make it as ubiquitous as owning Ford or GE. This gives them some insulation from other governments taking actions which would hurt Aramco and thus the Saudi royals . Plus the Saudis get some capital infusion.
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Re: +21000 on the Dow

Unread postby rockdoc123 » Mon 03 Apr 2017, 09:48:10

Maybe so but the large investment houses will not take something on like this unless there is a lot in it for them. And that comes in the way of commissions as they spread the shares out amongst their preferred clients. So from the Saudi perspective the shares are not owned by the investment houses, they have preferential access to them prior to release on the market but all of the shares are held by individual shareholders that are the best customers of that financial institution.
My point is if you aren't one of those best customers your only hope is to try and buy shares as soon as the market opens but by then they will probably have increased in price considerably.
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Re: +21000 on the Dow

Unread postby Cog » Mon 03 Apr 2017, 10:21:21

When SNAP went public and individuals investors could purchase it on the NYSE, the price rose about $2.50/share for a short time. A quick in and out and you have your profit. Course it could have gone down immediately after opening as well. Life is not without risk.
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Re: +21000 on the Dow

Unread postby Plantagenet » Mon 03 Apr 2017, 14:51:21

Cog wrote:Since Aramco is a state owned company, which essentially means its owned by the Saudi royal family, its in their interest that as many institutions and individuals own this stock as possible. Make it as ubiquitous as owning Ford or GE. This gives them some insulation from other governments taking actions which would hurt Aramco and thus the Saudi royals .


Who really cares an iota about the Saudi Royal Family?

I'm more worried about people who invest in this offering. The Saudi Royal Family already expropriated Chevron's oil holding in Saudi and turned it into Saudi Aramco----Now they are putting the exact same oilfields (albeit somewhat the worse for wear) back on the market. But whats to prevent them from expropriating the oil holdings again some interval of time after this new stock is issued, and taking back the oil into 100% royal hands for a second time.
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Re: +21000 on the Dow

Unread postby Ibon » Mon 03 Apr 2017, 15:45:10

Plantagenet wrote:
Cog wrote:Since Aramco is a state owned company, which essentially means its owned by the Saudi royal family, its in their interest that as many institutions and individuals own this stock as possible. Make it as ubiquitous as owning Ford or GE. This gives them some insulation from other governments taking actions which would hurt Aramco and thus the Saudi royals .


Who really cares an iota about the Saudi Royal Family?

I'm more worried about people who invest in this offering. The Saudi Royal Family already expropriated Chevron's oil holding in Saudi and turned it into Saudi Aramco----Now they are putting the exact same oilfields (albeit somewhat the worse for wear) back on the market. But whats to prevent them from expropriating the oil holdings again some interval of time after this new stock is issued, and taking back the oil into 100% royal hands for a second time.


If it happens Plant just call up the expert in the middle east......Gearge W Bush who famously said

I know it's in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can't get fooled again.”
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Re: +21000 on the Dow

Unread postby rockdoc123 » Mon 03 Apr 2017, 17:04:20

But whats to prevent them from expropriating the oil holdings again some interval of time after this new stock is issued, and taking back the oil into 100% royal hands for a second time.


Given the shares will trade on International exchanges such as New York and London International Law is the preventive measure. If they were to nationalize the holdings any shares in the market would have to be purchased. Simply announcing Nationalization might even be seen as stock manipulation. Given that SA has investments all over the world I don't think they would take the chance of having all of it frozen by International courts.

In the past when countries have nationalized they are not dissolving companies but rather taking over a companies assets in country. In every case I can think of that has resulted in the country who is nationalizing having to pay the various companies involved fair value for their assets. That fair value is of course up for debate but in the case of a share issue of Aramco and subsequent nationalization that value is determined in the market.
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Re: +21000 on the Dow

Unread postby onlooker » Thu 27 Apr 2017, 09:18:52

http://theeconomiccollapseblog.com/arch ... -absurdity
Anyone that cannot see that we are in the midst of an absolutely insane stock market bubble simply does not understand economics. Every valuation indicator that you can possibly point to says that we are in a bubble of epic proportions, and history teaches us that all bubbles inevitably come to an end at some point.
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Re: +21000 on the Dow

Unread postby pstarr » Thu 27 Apr 2017, 09:35:37

"Nobody can possibly argue that these enormously inflated stock prices are sustainable. Just like with every other stock market bubble in our history, this one is going to burst too, and I have been warning about this for quite a long time.

But for the moment, the naysayers are having their time to shine. Despite the fact that U.S. consumers are 12 trillion dollars in debt, and despite the fact that corporate debt has doubled since the last financial crisis, and despite the fact that the federal government is 20 trillion dollars in debt, they seem to be convinced that this irrational stock market bubble can keep inflating indefinitely."


onlooker, I see this either of two ways: the investor really believes the artificial intelligence/robotic/tesla hype and believes in the Singularity; or they are feeling particularly apocalyptic and are just cruising to their doom with a big old 'f#ck-all' attitude.

so maybe they just don't care, they know the ship is doing down. So its "Why not vote for Trump, who cares?" "Why not joke about serious stuff, who cares?" "Why not throw my money in the stock market ring?" "Who cares?" "It's all a big f#cking game anyway" "Who cares" Folks are just waiting for the end and having fun along the way.

Or they really buy Elon's BS. And that is worse :shock:
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Re: +21000 on the Dow

Unread postby onlooker » Thu 27 Apr 2017, 09:46:18

One big Ponzi, P. Those in the know (insiders) will take their money out just in time, the rest will be left holding the bag. I personally think its "the artificial intelligence/robotic/tesla hype". Irrational hope has no limits. That is a big reason why at this late stage our species in mass as not woken up to our collective plight
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Re: +21000 on the Dow

Unread postby vtsnowedin » Thu 27 Apr 2017, 10:25:05

It was noted today that the top five stocks in the DOW by capitalization have 24% of the value of the Dow fifty. The five are :Apple, Google, Microsoft, Amazon, & Facebook.
All of them computer and internet based and two of them primarily advertising platforms.
Imagine what would happen to the market if they all got hacked simultaneously?
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Re: +21000 on the Dow

Unread postby Newfie » Thu 27 Apr 2017, 11:30:22

That's why I keep saying the percieved wealth of the 1% does not really exist.
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Re: +21000 on the Dow

Unread postby pstarr » Thu 27 Apr 2017, 11:39:30

Newfie wrote:That's why I keep saying the percieved wealth of the 1% does not really exist.

Me to Newfie. Same thing. It's all a digital illusion because ultimately software wants to be free, and its easier to simply steal an entire software build than hack it.

Software intellectual property depends (more than non-virtual stuff) on costly database maintenance, ownership rights, the legal system and finally force. Who's going to defend Facebook and Twitter when SHTF lol
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Re: +21000 on the Dow

Unread postby Hawkcreek » Thu 27 Apr 2017, 11:43:43

pstarr wrote:onlooker, I see this either of two ways: the investor really believes the artificial intelligence/robotic/tesla hype and believes in the Singularity; or they are feeling particularly apocalyptic and are just cruising to their doom with a big old 'f#ck-all' attitude.

Since central banks own 50% of all global equities, there may not be a slowdown any time soon. They may just keep throwing debt created money at the market to keep it going up, and the end result will play out as massive inflation, to be paid for by the peons.
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Re: +21000 on the Dow

Unread postby Hawkcreek » Thu 27 Apr 2017, 11:46:25

Newfie wrote:That's why I keep saying the percieved wealth of the 1% does not really exist.

If you have control of something, you effectively own it.
If you control all worthwhile assets, including manufacturing, housing, food, toys, etc, you are the lord, and all the rest are your servants.
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