We're posting up notes from the Capitalize For Kids conference 2016. Next up is Anna Nikolayevsky of Axel Capital who made a presentation about lower oil forever.
Anna Nikolayevsky's Presentation at Capitalize For Kids 2016
• Current consensus is that current prices (which are in contango) are not sustainable and will increase in 2017, 2018 and 2019. More of these estimates are driven by marginal cost curve and well depletion analysis. However, nobody predicted the fall therefore why should any give value to analyst expectations?
• Overall, the industry is much more productive now (US shale technology advancement). Anna believes $50 is the current ceiling.
• Most forecasters focus on supply, but demand is much more important. Over 50% of oil demand is due to transportation. A few things can impact demand: Higher fuel efficiency (since 2007, fuel efficiency has increased by 22%), sharing economy is also a major risk (better it gets, the fewer cars we’ll need on the road), electric cars are also a serious threat.
• Tesla, has been gaining market share relative to comparable car models.
• Leading car companies and governments are looking to embrace electric or hybrid models. In fact, large car companies are setting high standards to have meaningful percentage of their overall fleet to be electric vehicles in the mid-2020s.
• Regarding cost, combustible engines are becoming more expensive in terms of compliance/ regulatory standards while electric ones are only getting cheaper.
• Interestingly Saudi Arabia is looking to diversify away from oil with long term clean energy targets and announcing it is selling Saudi Aramco.
Be sure to check out the rest of the presentations from Capitalize For Kids/Sohn Canada Conference.
Monday, October 31, 2016
Anna Nikolayevsky on Lower Oil Forever: Capitalize For Kids Conference
Thursday, October 1, 2015
Anna Nikolayevsky's Bearish Sohn Canada Presentation
We're posting up notes from the Sohn Canada Investment Conference 2015 (Capitalize For Kids.) Next up is Anna Nikolayevsky from Axel Capital Management.
Anna Nikolayevsky's Capitalize For Kids Presentation
- Fixed capex of 45% of GDP in China compared to 12% in USA
- Set records on commodity imports, debts have skyrocketed, and there has been overinvestment
- Causing ghost cities, real estate losses have caused input prices to crater
- Led to capital flight out of China, fraud discovery, government subsidiary intervention, low prices and overcapacity.
- All countries will be affected.
- China contagion risk will hurt resource heavy countries and industries.
- Overlevered energy companies will be hurt by oil collapse and this will continue.
- Charge-off rates at lows (a.k.a. bank bad loans likely to rise)
- Canada and Australia have high consumer debts
- USD appreciation causing international corporate defaults due to currency differences
- Short Banks, Australia, and Canada
- Trade to capitalize on devaluation in the USD.
Be sure to check out the rest of the presentations from the Capitalize For Kids Conference.
