10 ms·

Who is going to buy a trillion dollar stake in a shrinking market?

by willis936 6y ago

qppo 6y ago
People who get left holding the bag when trading options.
dboreham 6y ago
People who believe mainstream media narratives?
- rightbyte 6y ago
  Is the MSM narrative that Saudi oil is a good investment?
munk-a 6y ago
A lot of people - this IPO has already happened.
fomine3 6y ago
Index funds
- thekyle 6y ago
  The vast majority of index funds don't buy IPOs
- klipt 6y ago
  Index funds will buy at the market value, no? Is the market still overvaluing oil given knowledge of renewables?
  - ehnto 6y ago
    Renewables as a utility power source won't stop our reliance on oil. Fossil fuels like coal and natural gas are on the chopping board, but oil still has considerable permeation through our lives and a very large conversion cost and social inertia to overcome yet. Plastics, shipping fuels, many manufacturing processes use oil during manufacturing but perhaps not in the final product. Vehicles are still decades away from being replaced by EVs. The technology is all there and there are some "quick wins" coming around the corner I think. Container shipping switching to nuclear would be a quick change once regulations are in place for one example.
    - ClumsyPilot 6y ago
      > "Container shipping switching to nuclear would be a quick change once regulations are in place for one example." This is one of those things that will not take off without government initiative - risky, expensive to invest and develop, regulatorily difficult. The payoff is potentially massove though Mind you the culture nees to change too, we've had quite a few ships seized by pirates or capsized because the crew was drunk
    - xyzzyz 6y ago
      Most common plastics, that is, polyethylene, PVC, and polypropylene, can and often are produced from natural gas feedstock: many natural gas fields have abundant ethane, ethylene, and propane.
    - yourapostasy 6y ago
      > Container shipping switching to nuclear would be a quick change once regulations are in place for one example. This comment sent me looking, and I didn't see anyone making any kind of move towards installing a regulatory environment that is conducive towards a "quick win" for nuclear-powered container ships. This Flexport article [1] was interesting, but didn't mention any such legislative moves afoot. This article [2] lays some numbers down. One way I can see to introduce and sustain nuclear-powered container vessels is to expand US naval shipyards that currently handle nuclear carrier and submarine construction to take on the container vessels' commissioning, refueling, maintenance, and decommissioning, design vessels with much longer service lifespans than current container ships to amortize the cost over a much longer period, standardize the power plants on existing designs, and carve out specially-secured multimodal ports with preferential rates for the nuclear-powered container vessels with much faster container moving infrastructure. In the US political-economic landscape, this would spread out the current military expenditures on the power plant R&D, manufacturing capex, and opex costs, into a wider market. It would be an interesting geopolitical power play a nation, if the nation subsidized from taxpayer funds the regulatory compliance and national flagging expenses, to make a play to dominate and control the global container shipping service market. Nearly half of container ship opex costs are fuel and port costs [3]. Subsidize away the ruinous regulatory and security compliance costs of nuclear, crater the existing bunker-fuel powered shipping market rates, and controlling global shipping could be wielded as a significant geopolitical tool. Certainly cheaper than the trillions spent on the US military, and delivers leverage at the logistical and supply chain level. I can easily see China do this too, especially with their OBOR initiative. If this came to pass by any nation, then I'm sure it would rightly alarm a lot of people and nations. [1] https://www.flexport.com/blog/nuclear-powered-cargo-ships/ https://www.flexport.com/blog/nuclear-powered-cargo-ships/ [2] https://cleantechnica.com/2017/01/28/now-time-nuclear-cargo-shipping/ https://cleantechnica.com/2017/01/28/now-time-nuclear-cargo-... [3] https://transportgeography.org/?page_id=2250 https://transportgeography.org/?page_id=2250
ahupp 6y ago
Growth isn't necessary to make something a good investment. Imagine you are investing in a single mortgage: you get a little income each month, and after 30 years it stops completely. Essentially the value goes to zero! But the stream of income is what you care about. Aramco is similar; it will kick off income every year in dividends and eventually be worth zero.
- willis936 6y ago
  It’s the opposite of growth. Would you buy a house if you knew it wouldn’t be there in 20 years?
  - bobthepanda 6y ago
    People do this with cars and those depreciate the moment they get off the lot. Japanese homes have a lifespan of 30 years.
  - CydeWeys 6y ago
    Yes, if I get my money's worth out of that 20 years. Hell, I'm currently renting an apartment and I don't own shit now, let alone 20 years down the line.
  - tomp 6y ago
    I agree. But in the UK people routinely buy houses/apartments on leasehold which means you only "own" it for e.g. 99 years (sometimes less). Crazy if you ask me, "normal" if you ask them.
peteretep 6y ago
People who think there’s more than a trillion dollars left in that market?
atombender 6y ago
One of the fascinating observations in Carlota Perez's "Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages" [1] is that outdated technological industries continued to provide superior returns even after they'd been supplanted. You'd have more money today if you'd invested in Exxon in the mid 1970s than if you'd put the money in IBM, even though Exxon has slipped from the top 10 to something like 40th place in the S&P. Meanwhile, railroads peaked at 60% of the US stock market around 1860, shrinking to less 2%, yet continued to beat the market for the next 120 years. Discussed recently on the Rational Reminder [2] podcast. [1] https://www.amazon.com/Technological-Revolutions-Financial-Capital-Dynamics/dp/1843763311 https://www.amazon.com/Technological-Revolutions-Financial-C... [2] https://www.youtube.com/watch?v=vEwwtjDo1dU https://www.youtube.com/watch?v=vEwwtjDo1dU

Who is going to buy a trillion dollar stake in a shrinking market?

qppo 6y ago

People who get left holding the bag when trading options.

dboreham 6y ago

People who believe mainstream media narratives?

rightbyte 6y ago
Is the MSM narrative that Saudi oil is a good investment?

munk-a 6y ago

A lot of people - this IPO has already happened.

fomine3 6y ago

Index funds

thekyle 6y ago
The vast majority of index funds don't buy IPOs
klipt 6y ago
Index funds will buy at the market value, no? Is the market still overvaluing oil given knowledge of renewables?
- ehnto 6y ago
  Renewables as a utility power source won't stop our reliance on oil. Fossil fuels like coal and natural gas are on the chopping board, but oil still has considerable permeation through our lives and a very large conversion cost and social inertia to overcome yet. Plastics, shipping fuels, many manufacturing processes use oil during manufacturing but perhaps not in the final product. Vehicles are still decades away from being replaced by EVs. The technology is all there and there are some "quick wins" coming around the corner I think. Container shipping switching to nuclear would be a quick change once regulations are in place for one example.
  - ClumsyPilot 6y ago
    > "Container shipping switching to nuclear would be a quick change once regulations are in place for one example." This is one of those things that will not take off without government initiative - risky, expensive to invest and develop, regulatorily difficult. The payoff is potentially massove though Mind you the culture nees to change too, we've had quite a few ships seized by pirates or capsized because the crew was drunk
  - xyzzyz 6y ago
    Most common plastics, that is, polyethylene, PVC, and polypropylene, can and often are produced from natural gas feedstock: many natural gas fields have abundant ethane, ethylene, and propane.
  - yourapostasy 6y ago
    > Container shipping switching to nuclear would be a quick change once regulations are in place for one example. This comment sent me looking, and I didn't see anyone making any kind of move towards installing a regulatory environment that is conducive towards a "quick win" for nuclear-powered container ships. This Flexport article [1] was interesting, but didn't mention any such legislative moves afoot. This article [2] lays some numbers down. One way I can see to introduce and sustain nuclear-powered container vessels is to expand US naval shipyards that currently handle nuclear carrier and submarine construction to take on the container vessels' commissioning, refueling, maintenance, and decommissioning, design vessels with much longer service lifespans than current container ships to amortize the cost over a much longer period, standardize the power plants on existing designs, and carve out specially-secured multimodal ports with preferential rates for the nuclear-powered container vessels with much faster container moving infrastructure. In the US political-economic landscape, this would spread out the current military expenditures on the power plant R&D, manufacturing capex, and opex costs, into a wider market. It would be an interesting geopolitical power play a nation, if the nation subsidized from taxpayer funds the regulatory compliance and national flagging expenses, to make a play to dominate and control the global container shipping service market. Nearly half of container ship opex costs are fuel and port costs [3]. Subsidize away the ruinous regulatory and security compliance costs of nuclear, crater the existing bunker-fuel powered shipping market rates, and controlling global shipping could be wielded as a significant geopolitical tool. Certainly cheaper than the trillions spent on the US military, and delivers leverage at the logistical and supply chain level. I can easily see China do this too, especially with their OBOR initiative. If this came to pass by any nation, then I'm sure it would rightly alarm a lot of people and nations. [1] https://www.flexport.com/blog/nuclear-powered-cargo-ships/ https://www.flexport.com/blog/nuclear-powered-cargo-ships/ [2] https://cleantechnica.com/2017/01/28/now-time-nuclear-cargo-shipping/ https://cleantechnica.com/2017/01/28/now-time-nuclear-cargo-... [3] https://transportgeography.org/?page_id=2250 https://transportgeography.org/?page_id=2250

ahupp 6y ago

Growth isn't necessary to make something a good investment. Imagine you are investing in a single mortgage: you get a little income each month, and after 30 years it stops completely. Essentially the value goes to zero! But the stream of income is what you care about. Aramco is similar; it will kick off income every year in dividends and eventually be worth zero.

willis936 6y ago
It’s the opposite of growth. Would you buy a house if you knew it wouldn’t be there in 20 years?
- bobthepanda 6y ago
  People do this with cars and those depreciate the moment they get off the lot. Japanese homes have a lifespan of 30 years.
- CydeWeys 6y ago
  Yes, if I get my money's worth out of that 20 years. Hell, I'm currently renting an apartment and I don't own shit now, let alone 20 years down the line.
- tomp 6y ago
  I agree. But in the UK people routinely buy houses/apartments on leasehold which means you only "own" it for e.g. 99 years (sometimes less). Crazy if you ask me, "normal" if you ask them.

peteretep 6y ago

People who think there’s more than a trillion dollars left in that market?

atombender 6y ago

One of the fascinating observations in Carlota Perez's "Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages" [1] is that outdated technological industries continued to provide superior returns even after they'd been supplanted. You'd have more money today if you'd invested in Exxon in the mid 1970s than if you'd put the money in IBM, even though Exxon has slipped from the top 10 to something like 40th place in the S&P. Meanwhile, railroads peaked at 60% of the US stock market around 1860, shrinking to less 2%, yet continued to beat the market for the next 120 years. Discussed recently on the Rational Reminder [2] podcast. [1] https://www.amazon.com/Technological-Revolutions-Financial-Capital-Dynamics/dp/1843763311 https://www.amazon.com/Technological-Revolutions-Financial-C... [2] https://www.youtube.com/watch?v=vEwwtjDo1dU https://www.youtube.com/watch?v=vEwwtjDo1dU