Oil hit.... -$40 today

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KDnR
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Oil hit.... -$40 today

Post by KDnR » Mon Apr 20, 2020 10:01 pm

Once in a lifetime event!
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Jamers41
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Re: Oil hit.... -$40 today

Post by Jamers41 » Tue Apr 21, 2020 12:20 am

KDnR wrote:
Mon Apr 20, 2020 10:01 pm
Once in a lifetime event!
One that has never happened before in anyone's lifetime event....unless someone can find a history book text that proves otherwise......I guess there really is a first time for everything! Meanwhile gas prices in Chile will drip, drip lower at the violent pace of 6 pesos a week :roll:

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Re: Oil hit.... -$40 today

Post by admin » Tue Apr 21, 2020 6:14 am

Time for my "bathtubs and garden hose" investment plan.

When oil price crashes, everyone uses their garden hoses to move oil to store in their bathtubs.

Producers are paying people to take their oil. So far it is mostly a backwardadation in the monthly contracts, rather than a real physical oil glut. The one to watch is demand for oil tankers for storage (bathtub).

This actually started a few weeks ago when the oil pipeline operators in the states told the producers that had to have a confirmed contract on the other end of the pipe to take the oil, or they would not move their oil.
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Re: Oil hit.... -$40 today

Post by admin » Tue Apr 21, 2020 7:22 am

So far I took a beating on a lot of my stocks, but couple winners have been in copper miners. they are still down about 5% from what I paid, but the fact they are doing so well, so early is surprising. There was a tight supply before, but a lot of mines have totally shutdown or cut expansion programs. sooner or later someone is going to need some copper, especially if governments go big on infrastructure bills to try and kickstart their economies. free gas probably helps them too. perhaps it is their gold production keeping them in good shape.

The other one I never even occurred to me would be immune to a virus: Concha y Toro. It has moved like 3% plus or minus through the entire thing. I guess locking down the world causes wine demand to go up. Perhaps investors are eyeing all that rural real estate in chile they are sitting on. no idea why, but it has held the line.

took a bit of a bath on a mortgage real estate fund, but that will come back someday.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
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Re: Oil hit.... -$40 today

Post by nwdiver » Tue Apr 21, 2020 2:09 pm

admin wrote:
Tue Apr 21, 2020 7:22 am
So far I took a beating on a lot of my stocks, but couple winners have been in copper miners. they are still down about 5% from what I paid, but the fact they are doing so well, so early is surprising. There was a tight supply before, but a lot of mines have totally shutdown or cut expansion programs. sooner or later someone is going to need some copper, especially if governments go big on infrastructure bills to try and kickstart their economies. free gas probably helps them too. perhaps it is their gold production keeping them in good shape.

The other one I never even occurred to me would be immune to a virus: Concha y Toro. It has moved like 3% plus or minus through the entire thing. I guess locking down the world causes wine demand to go up. Perhaps investors are eyeing all that rural real estate in chile they are sitting on. no idea why, but it has held the line.

took a bit of a bath on a mortgage real estate fund, but that will come back someday.
In 2019 Chile displaced the USA as the 4th largest wine exporter in the world, C y T is the largest wine company in Chile....and on it’s own is a world class company.
It's all about the wine.

PXYC
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Re: Oil hit.... -$40 today

Post by PXYC » Tue Apr 21, 2020 11:02 pm

So.. when will CLP rise? 8)

Jamers41
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Re: Oil hit.... -$40 today

Post by Jamers41 » Tue Apr 21, 2020 11:33 pm

PXYC wrote:
Tue Apr 21, 2020 11:02 pm
So.. when will CLP rise? 8)
Not before October.

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Re: Oil hit.... -$40 today

Post by admin » Wed Apr 22, 2020 8:25 am

nwdiver wrote:
Tue Apr 21, 2020 2:09 pm
admin wrote:
Tue Apr 21, 2020 7:22 am
So far I took a beating on a lot of my stocks, but couple winners have been in copper miners. they are still down about 5% from what I paid, but the fact they are doing so well, so early is surprising. There was a tight supply before, but a lot of mines have totally shutdown or cut expansion programs. sooner or later someone is going to need some copper, especially if governments go big on infrastructure bills to try and kickstart their economies. free gas probably helps them too. perhaps it is their gold production keeping them in good shape.

The other one I never even occurred to me would be immune to a virus: Concha y Toro. It has moved like 3% plus or minus through the entire thing. I guess locking down the world causes wine demand to go up. Perhaps investors are eyeing all that rural real estate in chile they are sitting on. no idea why, but it has held the line.

took a bit of a bath on a mortgage real estate fund, but that will come back someday.
In 2019 Chile displaced the USA as the 4th largest wine exporter in the world, C y T is the largest wine company in Chile....and on it’s own is a world class company.
C y T has got to be one of the most under valued companies in Chile.

people are constantly asking me what is the cheapest land in Chile. The truth, stock in C y T. They have been under reporting the value of their land holdings to share holders for years.

It caught my attention back when they were trading on the new york stock exchange. I seen this report on TyC. the annalise went on and on about their wine buisness, then mentioned in passing they had thousands of hectars of agro land in the central region, most of it was not planted, and thus worthless, and it was only worth like $2,000 hector.

My red flags went up. I dug out their annual report, and discovered they were reporting the average chilean tax "legal value" not the market value to the SEC. they had for example 200 hectares properties, smack in the middle of major cities in Chile, still zoned rural agro property, they were reporting it as being only worth $2000 a hectare; when the real market value was well north of $100,000 or even 200,000 u.s. per hectare. even the crappiest property they have is well north of $20,000 u.s. per hectare, conservatively. They went on a buying spree and bought some of the best agro property in the world, and paid almost nothing for it a few years back.

I started putting market price estimates on just a small sample of their real estate portfolios, and stopped when I passed 10 billion dollars and went and bought the stock. I think the whole company was valued at a few billion dollars at the time. never mind water rights, other land holdings all over the world, brands, etc. just land in Chile they are worth many many times their market cap.

and I also don't mind drinking most of their wines while I wait to cash in on that market oversight.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
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41southchile
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Re: Oil hit.... -$40 today

Post by 41southchile » Wed Apr 22, 2020 8:55 am

admin wrote:
Wed Apr 22, 2020 8:25 am
nwdiver wrote:
Tue Apr 21, 2020 2:09 pm
admin wrote:
Tue Apr 21, 2020 7:22 am
So far I took a beating on a lot of my stocks, but couple winners have been in copper miners. they are still down about 5% from what I paid, but the fact they are doing so well, so early is surprising. There was a tight supply before, but a lot of mines have totally shutdown or cut expansion programs. sooner or later someone is going to need some copper, especially if governments go big on infrastructure bills to try and kickstart their economies. free gas probably helps them too. perhaps it is their gold production keeping them in good shape.

The other one I never even occurred to me would be immune to a virus: Concha y Toro. It has moved like 3% plus or minus through the entire thing. I guess locking down the world causes wine demand to go up. Perhaps investors are eyeing all that rural real estate in chile they are sitting on. no idea why, but it has held the line.

took a bit of a bath on a mortgage real estate fund, but that will come back someday.
In 2019 Chile displaced the USA as the 4th largest wine exporter in the world, C y T is the largest wine company in Chile....and on it’s own is a world class company.
C y T has got to be one of the most under valued companies in Chile.

people are constantly asking me what is the cheapest land in Chile. The truth, stock in C y T. They have been under reporting the value of their land holdings to share holders for years.

It caught my attention back when they were trading on the new york stock exchange. I seen this report on TyC. the annalise went on and on about their wine buisness, then mentioned in passing they had thousands of hectars of agro land in the central region, most of it was not planted, and thus worthless, and it was only worth like $2,000 hector.

My red flags went up. I dug out their annual report, and discovered they were reporting the average chilean tax "legal value" not the market value to the SEC. they had for example 200 hectares properties, smack in the middle of major cities in Chile, still zoned rural agro property, they were reporting it as being only worth $2000 a hectare; when the real market value was well north of $100,000 or even 200,000 u.s. per hectare. even the crappiest property they have is well north of $20,000 u.s. per hectare, conservatively. They went on a buying spree and bought some of the best agro property in the world, and paid almost nothing for it a few years back.

I started putting market price estimates on just a small sample of their real estate portfolios, and stopped when I passed 10 billion dollars and went and bought the stock. I think the whole company was valued at a few billion dollars at the time. never mind water rights, other land holdings all over the world, brands, etc. just land in Chile they are worth many many times their market cap.

and I also don't mind drinking most of their wines while I wait to cash in on that market oversight.
I think that makes sense, I dont think they would be able to put commercial value on any of their land would they? The best and only logical accounting method would be to use the fiscal land value , which are probably about a quarter or a third of what commercial is (on average). Commercial value being very subjective and especially dependent on other economic factors , so obviously subject to a lot more variation. Underdevoped land in the central value without water wouldnt be worth that much , and certainly no more than 3 or 4 times fiscal value, 6000 to 8000 USD per hectare would be fair value for undeveloped rural land especially with no water in central valley and maybe on the highside . There maybe some land in urban areas that is worth more due to location, but try moving large plots of land in this market at commercial prices that seemed reasonable say in 2018, not even close now for what you would get now, if they could move it all. I guess like always you can put any price you like on land, it comes down to who (if anyone) is prepared to pay your asking price.
You right there was (still a bit ) some of the best land in the world in Central valley but urbanisation has paved over a lot of it and mismanagement of water and soil degradation has destroyed a lot of it now. Land prices have to be able to provide a return anything else is speculation.
Even at 10000USD on agriculture land it's hard to make it viable , ( if you exclude capital gains ) to get a constant 5 percent return on anything ag related you are going well, grapes are different I guess and higher value. But generally there is very little , if any, agriculture land in Chile that can be expected to sell for more than 20 thousand dollars a hectare, apart from very high value crops.
I just had a look out of curiosity, listings from last year, there is a 900 hecate farm with water to irrigate 70 hecatres, in from curico asking price is negotiable but is 1.8 million per hectare. Then there are others for cherry production asking for 20 million a hectare. Obviously there is very little movement at the moment but will be interesting to see what agriculture land prices do.
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Re: Oil hit.... -$40 today

Post by admin » Wed Apr 22, 2020 11:23 am

I get why they are doing it. if they are going to sit on property for years, best to pay little to no tax on it.


but now they are setting up a real estate development division.

I am talking land smack the middle of Santiago and the surrounding urban areas, and they have water rights to go with it. They are currently in the process of doing their first housing development, and they had the property rezoned urban. Think I seen it's value went immidetly to 50 million a hectare.
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41southchile
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Re: Oil hit.... -$40 today

Post by 41southchile » Wed Apr 22, 2020 11:41 am

admin wrote:
Wed Apr 22, 2020 11:23 am
I get why they are doing it. if they are going to sit on property for years, best to pay little to no tax on it.


but now they are setting up a real estate development division.

I am talking land smack the middle of Santiago and the surrounding urban areas, and they have water rights to go with it. They are currently in the process of doing their first housing development, and they had the property rezoned urban. Think I seen it's value went immidetly to 50 million a hectare.
Yeah, that would be right, if it was for housing development though going on what sales have been doing around for housing development on the edge of PV or Llanquihue in the last few years , probably a LOT more than that . I remember there was a sale a few years ago, like 3 hecatres, enough for 70 or 80 houses, the land went for about 1000 millones
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Re: Oil hit.... -$40 today

Post by admin » Fri Apr 24, 2020 8:21 am

yea, that is what they are doing. like 20 houses per hectare, plus I believe there was some commercial property and apartments planned. they were trying to squeeze the max value out of those properties.

I have not seen any recent updates on those projects.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
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From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

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