Santa Barbara Luncheon Series – Oil, Easy Money and the Reach for Yield
|
MAY
26
|
|
||||||||||||||||||||||
A Santa Barbara Group Sponsored Event
Technological advances in the last 40 years have led to an increased supply of global oil and gas as well as a doubling of production in the US over the past decade. Growth in the demand for energy has been a large driver of the “Commodities Super Cycle”. The Federal Reserve’s easy money policy has also contributed to the increase in energy supply and this has had worldwide consequences.
Some of these consequences have been good, such as US energy independence; the downside has been instability in many energy-exporting countries. While large, Western oil companies have behaved as economics would predict, geopolitics and excess risk-taking by smaller, independent companies have led to less predictable outcomes.
How should investors position themselves in such an environment? This luncheon will help attendees understand the long-term investment cycles of the energy sector and the implications for investment opportunities.
Firstly, market participants need to understand supply and demand as it relates to both energy and capital markets. Secondly, and most importantly, they need to recognize “the behavior of the firm” and the marginal cost of production.
With this understanding Steve will demonstrate how to analyze a hedged equity position, specifically a midstream energy company after a 60% decline in energy prices. Comparable risk/return scenarios of a company’s equities and related bond yields will also be part of his examination.
Technological advances in the last 40 years have led to an increased supply of global oil and gas as well as a doubling of production in the US over the past decade. Growth in the demand for energy has been a large driver of the “Commodities Super Cycle”. The Federal Reserve’s easy money policy has also contributed to the increase in energy supply and this has had worldwide consequences.
Some of these consequences have been good, such as US energy independence; the downside has been instability in many energy-exporting countries. While large, Western oil companies have behaved as economics would predict, geopolitics and excess risk-taking by smaller, independent companies have led to less predictable outcomes.
How should investors position themselves in such an environment? This luncheon will help attendees understand the long-term investment cycles of the energy sector and the implications for investment opportunities.
Firstly, market participants need to understand supply and demand as it relates to both energy and capital markets. Secondly, and most importantly, they need to recognize “the behavior of the firm” and the marginal cost of production.
With this understanding Steve will demonstrate how to analyze a hedged equity position, specifically a midstream energy company after a 60% decline in energy prices. Comparable risk/return scenarios of a company’s equities and related bond yields will also be part of his examination.
Steve Worthington | Steve Worthington has over 25 years of public portfolio management experience. He founded four operating companies including two hedge funds: Corsair Capital Partners (Long/Short) and Acme Alpha (Equity Market Neutral). His expertise is in short side alpha, factor betting algorithms and hedging strategies (linear-equity/futures and convex-options).Steve previously managed the west coast venture capital arm of James D. Wolfensohn, Inc. and began his career working in oil exploration for Exxon. His education includes an MBA from the Haas School, Berkeley and a Masters in Engineering from USC. He holds a B.S. in Mechanical Engineering and a B.A. in Economics from UCSB. Steve is the author of several patents.
| Registration Fees $10 (Members) | $15 (Non-Member) |
Payment Information
We accept the following:
If you prefer to pay by check please register online and select "purchase order" as your payment option and enter your last name as the purchase order number.
We accept the following:
If you prefer to pay by check please register online and select "purchase order" as your payment option and enter your last name as the purchase order number.
Mail check to:
CFA Society of Los Angeles, 520 S. Grand Ave, Suite 655, Los Angeles CA 90071.
*Credit card payments will only be accepted through the secure online registration, and not by phone or email.
Cancellations
Cancellations must be received in writing by 9:00 am the day prior to the event. No phone cancellations are accepted. Please fax to the CFALA office at (213) 613-1233 or e-mail info@cfala.org. Member “no-shows” will be billed the non-member fee ($15) for the event which is posted on the CFALA website.
Cancellations must be received in writing by 9:00 am the day prior to the event. No phone cancellations are accepted. Please fax to the CFALA office at (213) 613-1233 or e-mail info@cfala.org. Member “no-shows” will be billed the non-member fee ($15) for the event which is posted on the CFALA website.
Chair:
Falko Hörnicke, CFA®, CFP® & George Tharakan, CFA
Falko Hörnicke, CFA®, CFP® & George Tharakan, CFA
 |
As a participant in the CFA Institute Approved-Provider Program, the CFA Society of Los Angeles has determined that this program qualifies for 12 credit hours. If you are a CFA Institute member, CE credit for your participation in this program will be automatically recorded in your CE Diary. |
