Thursday, September 25, 2008

Whoops!

Boone Pickens Loses Big On Oil, Natural Gas Bets: Wind-Farm Ads Worked Too Well
Corey Lorinsky
Aug 13, 2008
Clusterstock.com


Boone Pickens has been a very busy man lately, lecturing Congress about his wind and natural gas-focused energy policy, assembling a "green" army, and starring in his own commercials. Maybe he's been too busy.

The New York Post says the billionaire octogenerian's $300 oil predictions couldn't help him last month. The commodity half of Pickens' BP Capital hedge fund (which has $7 billion in total assets under management) sank about 35% in July. He can add those losses to the boot-licking he just took in Yahoo (YHOO).

"We notified our commodity-fund investors last week that the steep decline in natural gas and oil prices has had an adverse impact on our performance...We continue to analyze the market and adjust accordingly," a Pickens spokeswoman said.

For those who haven't seen his ubiquitous commercials, Pickens master energy plan is to build massive wind farms in Middle America to replace natural gas a source of electricity. Then, natural gas will be available to use as a fuel for automobiles. Where does the Middle East fit into this plan? Nowhere. Pickens has sunk multiple billions into his own wind farm already and is positioning himself as the "energy guru" for the next Presidential administration.

Needless to say, these losses are embarrasing to Pickens on many levels.


Pickens says oil won't go below $100
August 14th, 2008
Reuters


T. Boone Pickens said on Thursday crude prices may soon fall as low as $110 a barrel amid falling gasoline demand, but should not sink below $100 because the United States depends heavily on oil imports.

"I don't think it'll drop below $100," Pickens told Reuters in a telephone interview. "I would say $110 is where it might go, something like that."

Pickens' hedge fund BP Capital, which manages about $7 billion in assets, sank about 35 percent in July, according to a report this week in the New York Post.

Pickens declined to comment in the interview about the performance of his fund.

The U.S. Department of Transportation reported this week that vehicle travel declined for the eighth month in a row.


Pickens’ Loses $1 Billion on Energy Bets
September 24, 2008
NYT


T. Boone Pickens, it seems, has taken a bath on his energy investments.

According to The Wall Street Journal, funds run by the 80-year-old oil magnate have lost around $1 billion this year, a figure that includes $270 million of personal losses.

Apparently blindsided by the downturn in energy prices, one of the investor’s energy-focused hedge funds is down own almost 30 percent through August, while a smaller commodity-focused fund is down 84 percent, The Journal said.

“It’s my toughest run in 10 years,” Mr. Pickens told The Journal. “We missed the turn in the market, there’s nothing fun about it.”

Before the most recent tough spell, the investor’s energy-stock fund, which started the year at $2 billion, has returned a compounded annual return of 37 percent over seven years, The Journal reported, citing an investor. The commodity fund, which started the year at about $600 million, has had similar strong performance, according to the newspaper.

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according to another source he said:
“Oil likely will finish the year around $120 or $125 a barrel.”

So how bad has it been for BP? Pickens says “It’s like mashing all your fingers in the door… This has been a pretty bad period for us,” he says.

4 comments:

NMMM.NU said...

It ain't over 'til the fat lady sings.

Current situation is much worse than 2-3 mo ago. I believe we will see $200 oil this year.

Anonymous said...

Why do you say the current situation is worse than 2 or 3 months ago? Production is up slightly and the price is down.

Bill James said...

Instability is so extreme that drops and spikes will dominate. But the big moves will be all up.

Inventories are dangerously low. Mexico is collapsing. Russia's bear is awakening. Congress has no plan or idea that World Oil Exports have declined from the last 3 years to create a deficit 3 times worse than that created by the 1973 Oil Embargo.

JD said...

Nice forecasting bill, except you forgot to factor in one key element: implosion of the banking system due to the subprime debacle. Brent now selling for $85.