tag:blogger.com,1999:blog-8861605.post8107311968675027750..comments2024-03-24T11:01:27.668-04:00Comments on Resource Insights: Uber, Lyft and oil frackers: Tech mirages, not real businessesKurt Cobbhttp://www.blogger.com/profile/05330759091950742285noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-8861605.post-31940360253034165962019-03-19T13:48:09.872-04:002019-03-19T13:48:09.872-04:00Michael,
I suppose anything is possible. Other co...Michael,<br /><br />I suppose anything is possible. Other companies have tried to create economies of scale only to find out that the law of diminishing returns sends them to bankruptcy court. Exxon has extraordinarily deep pockets. It's possible the company will pursue this strategy (which is all based on economies of scale) for some time and be willing to lose money at it. What may not be apparent is that if they do this, they are likely to depress the price of oil and push many of their competitors into bankruptcy. Then, when Exxon learns the limits of their strategy, there won't be much infrastructure left outside of Exxon, at least in the Permian. This is an extreme scenario. But the losses taken by investors on shale oil have driven operators elsewhere in the world to despair. Exxon will provide the capital that Wall Street is withdrawing because of bad results. I'm skeptical that even the great Exxon can find a way to make this work consistently. Yes, in the sweet spots anybody can make money. But once you get outside those, I think even Exxon will find it impossible.Kurt Cobbhttps://www.blogger.com/profile/05330759091950742285noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-58510164455025002752019-03-15T10:56:42.885-04:002019-03-15T10:56:42.885-04:00Kurt: your analysis of the Magical Thinking or &qu...Kurt: your analysis of the Magical Thinking or "mirage" inherent i fracking schemes seems sound, but what about Exxon claiming goal is production costs of $15.00 is their goal. Fraud? Maybe they'll buy Uber too.Mike Sheldrickhttps://www.blogger.com/profile/15928956550862592493noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-8081312201508046512019-03-12T15:37:19.128-04:002019-03-12T15:37:19.128-04:00Connecting the seller to the buyer, whether of goo...Connecting the seller to the buyer, whether of goods or services, results in more transactions. With the Internet, such connections are possible like never before: hence Jeff Bezos, wealthy like never before: the wealthiest human ewer.<br />Your post many moons ago about "The Net Energy Cliff" was a classic, and an excellent reference. That kind of day of reckoning is fast approaching, and with it the Internet will fade away taxing away the connections and transactions.Robin Dattahttps://www.blogger.com/profile/15358491380192365005noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-55064092554272062532019-03-12T12:20:13.646-04:002019-03-12T12:20:13.646-04:00Unfortunately, the reasoning also applies to part ...Unfortunately, the reasoning also applies to part of the renewable industry...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8861605.post-40943398866929925642019-03-11T01:27:11.795-04:002019-03-11T01:27:11.795-04:00It occurs to me that both ride sharing services an...It occurs to me that both ride sharing services and fracking are "businesses" that are enabled by technology, and are symptomatic of the underlying prejudice that because it is made possible by some new technology, it must be better and is thur bound for success.<br /><br />The ride-sharing services are enabled by commodified mobile communications and the Internet. Communications in a taxi company is centralized, and the ride-sharing systems distribute it. The other thing they distribute is the risk, generally onto the field workers, and away from the central company. This is not, by itself, the key to profitability. <br /><br />I think we can say the same thing about fracking. The enabling technology is that fracking itself got commoditified, probably enough incremental progress in pumping, control systems, stronger materials, and so on reached a tipping point, converting the activity from a lab curiosity to something that could be deployed on an industrial scale. Capital markets and a world thirsty for oil distribute the risk.<br /><br />Is there some way to recognize these businesses earlier in their lives? Please consider.<br /><br />Joe Clarkson is right, no business ever got more share or bonds sold claiming: "We're not going to be as successful as Amazon". Everyone is forced to tout themselves as the greatest business venture since we vaulted forth from Olduvai Gorge, which is why the best investors know a few things about the business they're investing in, and don't make investment decisions based on some set of financial metrics characteristics of a particular issue, or industry. Robert Brownhttps://www.blogger.com/profile/17893518516529800764noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-73427362587443194182019-03-10T13:19:32.659-04:002019-03-10T13:19:32.659-04:00Every tech company will claim that they are the ne...Every tech company will claim that they are the new Amazon, which was cash flow negative for many years, and is now turning out steady profits to the benefit of its stockholders. I agree that Uber and Lyft are unlikely to join Amazon in eventually making a profit. I wonder who is continuing to keep feeding them cash year after year, just like the people funding the frackers?Joe Clarksonnoreply@blogger.com