Wednesday, November 18, 2009

Amazing Divergence

This is Anadarco Petroleum [red] and the UNG natural gas ETF [blue] from Nov '07 to Nov '08:

This makes sense seeing as APC is very much a natgas company.

Now look at what's happened Nov '08 to Nov '09:

This is where you are left scratching your head. Why is a nat gas company up 60% when its product is getting 60% less when sold?

Unless you think natgas prices are going to return to and blow through last summer's highs I see a fundamental disconnect.

20 comments:

Stagflationary Mark said...

As heard on CNBC today...

"I don't think fundamentals really matter here."

energyecon said...

Anadarko's production is ~2/3 natural gas...

Rob Dawg said...

Anadarko's production is ~2/3 natural gas...

Exactly. Markets don't mean stocks anymore.

getyourselfconnected said...

Almost every chart I look at is the same, downtrending volume with a huge stock price move up. I think it must be different this time.

Otis said...

The market making a statement that natural gas ETFs are a rip off, have time decay, and are a poor substitute for a natural gas company.

Most ETFs are time bombs.

Lance Zambezi said...

I've read that natgas price is declining due to increased supply from shale reserves . . . So if Anadarko production/reserves are compensating for price decline, it actually makes sense.

sm_landlord said...

Might as well have owned MWE rather than APC - you get a nice healthy dividend while you scratch your head and watch it go up.

@Otis, any leveraged ETF is going to exhibit time decay under the right circumstances, but sometimes they can nice to have.

@Rob - Stocks aren't companies, and companies aren't stocks. But you knew that... did you get my email?

Mr. Outspoken said...

This is very peculiar. Another divergence can be seen between GLD Streettracks Gold ETF and GSPG. Gold holding its ground and heading upwards, while GSPG has been selling down, holding steady, and then loosing an additional .0009 since a buy-point was recognized by astute market observers.

Lou Minatti said...
This comment has been removed by the author.
Bill in NC said...

Ready to jump back into RE speculation?

Uncle Sugar is your friend!

http://www.nytimes.com/2009/11/20/business/20limits.html?em

sm_landlord said...

Another Great California political screw-up in today's LA Times:

After spending billions, state remains hampered by outmoded, unreliable computer systems

"An embarrassing legacy of cost overruns, botched upgrades and failed networking projects has left California to rely on decades-old technology and jury-rigged software systems."

Just amazing dysfunction.

Mr. Outspoken said...

I especially liked in the FHA story, where they said:

The F.H.A. commissioner, David H. Stevens, said recently that its loans were relatively safe because the buyer was required to live in the property. They “are for shelter. They aren’t speculative-type investments,” Mr. Stevens said.

Thanks to rampant fraud and poor accountability/enforcement, such requirements aren't even worth his breath as far as I'm concerned. But then again, what does he care? It's not like he has to pay for it. The whole steaming pile will end up on responsible taxpayers. I'm moving overseas...

Property Flopper said...

SM Landlord - very easy to explain, simple lack of accountability. Poor specs? No problem, we'll just put in a change order... here's the bill.

Oh, budget changes. We need to cancel the project... but the contract still has to be paid. Vendor doesn't deliver on time, no problem, here's your check anyhow. Bugs? No problem - those will get fixed on a separate contract - got to keep the contractors busy...

Just remember, the people writing the checks don't care, it's not their money. The vendors / contractors don't care, they get paid either way.

It all goes to hell in the end and the system doesn't work... who gets fired? Why nobody silly... that's just how the gov't works.

s said...

Mr Outspoken,

Unless you also terminate your citizenship you'll still be paying taxes even if you live overseas.

And once the dollar gets done falling the overseas income threshold will be worth a loaf of bread so don't count on that...

Lost Cause said...

How could they spend BILLIONS on a failed computer system? Maybe I am not thinking outside the box. Somebody help me out here.

Lost Cause said...

You cannot make this stuff up. There is a Formaldehyde Council.

Chinese Drywall Linked to Corrosion

Federal investigators reported on Monday that a “strong association” exists between chemicals in Chinese drywall installed in thousands of homes during the housing boom and electrical problems in those homes.

In addition, investigators said that the drywall was a possible cause of respiratory problems reported by homeowners, brought on by hydrogen sulfide gas emitted from the imported drywall in combination with formaldehyde, which is common in new homes...

The Formaldehyde Council, a trade organization, disagreed with some of the findings.

H Simpson said...

Lost

that drywall not only corrodes electrical components, but it is not worth a hoot containing convicts.

This is from the last week's Manchester Union Leader on a breakout at the Sullivan Country jail:



CLAREMONT – An inmate being held on an armed robbery charge escaped from the Sullivan County jail this morning by boring through a sheet rock ceiling in his cell.

At 1:40 a.m., Robert Hale III, 45, was sitting on his bunk in his cell, according to jail Superintendent Ross Cunningham. He was gone at 2:40 a.m. when correctional officers did their hourly head count, he said.

"We are making all efforts to apprehend him," Cunningham said.

Since then, four state troopers and their K-9s have been searching for Hale, who was being held in the jail since March 22 on $50,000 cash bail. He was awaiting trial on an armed robbery charge alleging he used a knife to rob a Claremont Texaco station.

Hale is suspected of using metal debris taken from an ongoing construction project at the jail to bore though the double sheet rock layer ceiling in his cell.

Cunningham said once he cut out an opening, Hale pulled himself into the attic area where he broke through a sheet rock door and then dropped a folding fire stairwell into an addition that is under construction and unoccupied. He then broke a window to make his escape, the superintendent said.

Ross said Hale was not on any work release program and was being held as a medium security inmate.

Lex said...

I'm amazed that it's cheaper, apparently, to import drywall from China than to make it in the U.S. Gypsum is about as common as dirt.

Lost Cause said...

They make drywall out of waste ash over in China. That's right -- after the power plants burn the coal, and whatever other source wants to contribute to the waste heap, they take the waste (also high in arsenic & murcury and several other toxins) and make drywall out of it, so that you can entertain jealous realatives in your epic lux McMansion.

Lost Cause said...

PS -- I imagine the boon of toxic mold lawsuits have jacked up insurance rates for these drywall manufacturers. Lawyers aren't cheap, after all.