Category : Eugene Robin

Pondering Things Way Out of Our Control

by Eugene Robin | Research Analyst The magnitude of the recent price decline caught many of “us” off guard and caused many (including Cove Street) to re-think our notion of what constitutes a sustainable oil price. Here, we analyze the somewhat complex question of “is $40 oil sustainable?” Currently, with storage in the US looking like it’s about to hit escape velocity (see below), short term price pressures will continue as long as the supply overhang exists. While refiners will […]

The Efficient Market Paradox

by Eugene Robin  |  Research Analyst, Cove Street Capital I’d like to share with you a great book on the basic mathematics of the stock market written by John Allen Paulos that has a section on the efficient market. Briefly, if investors believe in the Efficient Market Hypothesis (EMT) then they believe that the market efficiently incorporates all old and new pieces of information and thus the quest to beat the market is a losing proposition and thus everyone should just […]

The Next Generation: An Interview with Ben Claremon & Eugene Robin

CSC research analysts and blog contributors Ben Claremon and Eugene Robin were recently interviewed for The Wall Street Transcript. CLICK HERE to download the article.  

The Active Management Pretend Game

by Eugene Robin  |  Research Analyst, Cove Street Capital Let us start by saying that this is not an essay on whether or not a large pool of institutional asset allocators should consider an indexing strategy or not. What follows is an analysis of the question: “If you are going to charge active management fees with the goal of outperforming relevant benchmarks over the longer run within reasonable risk parameters, what sort of preconditions are suggestive of a higher probability of […]

Everything Turns Grey: Chesapeake

by Eugene Robin  |  Research Analyst, Cove Street Capital   The title of this blog post borrows a line from an Agent Orange song that I loved listening to when I was growing up. I think it encapsulates the argument currently taking place between the environmentalists in this country and the oil and gas industry, and specifically the gas shale drillers. The two sides have barked at each other for over a year, throwing accusations, writing articles, supporting “independent” research and […]

What We Are Thinking: Approach Resources

by Eugene Robin Approach Resources, Incorporated (AREX: NASDAQ) is an independent oil and gas exploration company located in west Texas. As a spinout from energy private equity firm Yorktown Partners, Approach situated itself on land that was, at the time, a natural gas play on what was known as the Ozona Uplift formation. The average purchase price for each of their acres from 2004 through 2009 was roughly $300 per acre. In parallel to the company’s acreage acquisition, several other […]

Data Mining: The Gift and the Curse

by Eugene Robin Reading over some of the “doomsday” commentary in the financial blogosphere, it sometimes appears as if graphs posted by some of the authors are poignant and relevant to the here and now. As the above graph indicates (presented as a reprint from Societe General’s Research via the blog Zero Hedge), it appears as if the historical movements of the Nikkei and S&P are genuinely linked by some mysterious force. In fact, the author’s insinuation is that there […]