david aronstein

[david aronstein @DA28030]

@TheGiantsWire Your site is horrible.

[david aronstein @DA28030]

Just an update on TEN. They released a current version of their data kit. The VLCC that they are delivering in May to Sinokor apparently got a nice charter for April / May at 138000. This should add $5 million to q2 earrings. One of their SUEZ that came off charter in April is which was capped at 60K is now trading spot so probably 40K a day profit upgrade. All in all this pretty much locks in > $4 plus $1.90 capital gains for q2. So H1 is looking pretty solid for GAAP $9. I could easy see $2 dividend for July.

[david aronstein @DA28030]

@PeterSchiff delusional

[david aronstein @DA28030]

@SofiosThanos only if you are a shadow fleet tanker from Iran

[david aronstein @DA28030]

@IranNuances its their own tanker

[david aronstein @DA28030]

@EricLDaugh This man would make a great president !

[david aronstein @DA28030]

@MikeSchuler Did you factor in the cost of Iran having a nuclear weapon and threatening or actually using it ?

[david aronstein @DA28030]

the effect is not absolute pricing so inflation adjustment to prices is not germane. the affect is change in pricing (this is the very definition of demand elasticity). So as long as inflation hasn't affected the price changes (and here the price changes have happened in weeks so that is clearly not the case) then it is not going to be a factor.

[david aronstein @DA28030]

This paper and others were written long before the current circumstances. This one was written in 2021 so no they were not written to try and manage current pricing.

This model posits both a short run and long run demand elasticity based on historical Brent crude prices and EIA global production data from 1991 through 2018. It uses a particular mathmatical method (DSGE) to form the estimates.

Other papers use VAR models and come up with similar though higher estimates. They also discuss how an inventory response can delay the demand destruction which seems to be at work here.

There is nothing particularly exciting about the math used in these papers and it is pretty accessible if you use Grok to help with the explanations.

So while it is possible that they do not properly reflect current dynamics they are assuredly not papers written years ago in order to manage anyone's expectations around price today. The oil futures curve does not reflect and expectation for higher prices in the future, it is in fact in hugely backward. So while one could easily make money having forward prices come nearer to spot there is absolutely nothing in current market pricing that suggests that spot is going higher and everything to suggest that it is going lower.

[david aronstein @DA28030]

You need to argue with all the economists at the Dallas Fed and elsewhere. There are lots and lots of papers on this. And yes if the price of oil goes from 50->100 it implies a global quantity demand decline of some 20%. Here is a pretty recent paper that posits the elasticity at -.19

https://t.co/zwmQUI1wj6

[david aronstein @DA28030]

There is every reason to believe that the stock is going much higher here. Q1 earnings looks to be around $3 with Q2 coming in near $6 including around $1.90 in capital gains. Another $6 total for Q3 and Q4 and you get around $15. Using current 1 year TC rates, plugging into their data kit I get around a $12 run rate. For the last two years the stock ended up year end around 5x trailing year earnings.

Using the same metric and forgetting about the capital gains would get you north of $60. Last two years dividend payouts were about 33% of GAAP earnings. If the above calculations hold up then we should get around $5 in dividends between now and Feb 2027.

This stock meet all the criteria for making money. Small enough so that it is not extensively covered, easy to analyze forward earnings accurately as opposed to the quick and dirty analyst methods of just using some gross TC data with guesses as to utilization etc.

It is no wonder that analyst expectations have significantly missed on the low side for 10 of the last 12 quarters. Full year analyst earnings for the two that I see are currently sitting around $4.70 and $7.70. These are going to be dramatically wrong unless something bizarre happens to shipping rates.

[david aronstein @DA28030]

@Shipping_VIE You can buy the same earnings stream via $TEN for 1/2 the price of STNG.

[david aronstein @DA28030]

@unusual_whales With two and three year old models. Brilliant

[david aronstein @DA28030]

You just need to buy the right ones. $TEN going to earn $15 in 2026 and if you apply current 1 year charter rates to 2027 you will see around $12. Once the SOH opens back up rates are going to skyrocket at least for another quarter. If the Iranian dark fleet is disabled then going forward Sinokor will be completely in control and will set marginal rates wherever they want. While you won't make huge money buying name brands that trade 30% over NAV that doesn't mean you can find huge winners with a modicum of effort

[david aronstein @DA28030]

I am old enough to remember when Gordon Brown sold off all of Englands gold reserves from 1999 - 2002 after a 20 year bear market. Grok believes that the average prices was around $275. Now with gold at $4750 we are thinking that a central bank buying spree is going to work out ? Doubtful. In a world of inexpensive robots the production cost of gold is going to plummet.

[david aronstein @DA28030]

why should the stock market go down 20% because of the war in Iran. Oil is probably not going any higher from here since demand destruction in South East Asia is doing the brunt of the work. The IMF lowered their global GDP forecast for 2026 to around 3% from 3.2. Hardly a calamity.

[david aronstein @DA28030]

@Marcus4cyb @_The_Prophet__ and since the supply of 'digital assets' is infinite it doesn't make a lot of sense to buy them unless you have some inside info on the next scam

[david aronstein @DA28030]

current publicly held debt to GDP is right around 100%. with both right around 31.4 T. It is not right to include intergovernmental holdings. They are meaningless book entries. It won't take much to make debt to GDP to go down. with 3% inflation and 2.5% growth nominal GDP goes up 5.5% a year which at the moment is about 1.7T. If you lower rates a 100 basis points on 31 T that's 310B and voila the debt to GDP ratio remains constant. Yes 3% inflation removes half the value of cash in 24 years so equities are a far far better place to invest.

[david aronstein @DA28030]

@TomKloza as with all the other fear mongers implicit is that a move from $65 -> $100 causes no demand destruction even as crack spreads collapse all over the planet.