Reasons why I pass on Chesapeake energy

This was meant as a reply to a recent comment but I thought it might be more broadly shared as a post:

Hi Aly, Thanks!

This article is posted on Gurufocus.com, you may read it here, if you like it please do not forget to vote positively for it by clicking on the 5 stars at the end, just under where it says “Rate This Article”.

Cheers!
jrv

Disclosure : I do not own CHK nor plan to own it ever.

PD: Those puts do look cheap but if there are troubles ahead for them, due to, for example, gas prices staying low, they might end up being expensive. Anyways, CHK aside, the scenario of low gas prices would be good for the rest of the economy so other investments would benefit from it.

About jrv

I was born in Spain and lived in Belgium, Chile, France, USA, Argentina among other places. Currently I am trying to settle down in a wild place. I am "retired", even though now I dedicate more hours "working" for my investments than I ever worked in the real labor market where I used to work in IT and Banking. I am a family man, I have a lovely wife, several sons and one step daughter. I have humble tastes, I like to stay home and read about companies and investments. I started investing at 25 before the internet bubble exploded. I did not know much about investing and liked technical analysis so my results were pretty bad. Fortunately I did not have much to lose. Some years later in 2006 bored of doing only real state investments and with quite a lot of money saved I opened an account in a cheap and excellent online broker and started again. This time I did not want to commit the same mistake, so I decided to follow a model. I heard that Warren Buffett was the best at making money via stocks so I started by reading a lot about him, all of his shareholders letters and several of the books that he recommended. I learned a lot, started applying his investing principles and reading a lot of 10K's. Digested news from lots of different sources. Basically I started buying very good and cheap companies and holding them for ever if possible and if nothing changed fundamentally. When the housing crisis started I was more than 75% cash. At that time I identified good companies at incredibly cheap prices so I invested most of my savings in stocks. In less than I year I doubled. By the second semester of 2009 I turned my software company into an investment vehicle and dedicated myself full time to it. My wife and I decided to change our lifestyle and moved from Belgium to the beach in a wild country. The goal was to keep fixed costs low in order to be able to live with a minimum 6-8% yearly return but specially to move away from the inhuman life of civilization and to have finally some peace and sunny weather to concentrate better on investing. Now I can think and study about companies 60 hours a week and I am doing great. I can finally do what I want full time and can proudly say that I have never been so happy, specially also with my just born 4th son, my other great kids and my sweet wife who supports me fully while I study most of the day and patiently wait for the opportunity to make a swing ! You can learn a bit more about my portfolio by viewing it at www.kuchita.com/view/sumo.php or you may learn more about me and my family by following the link "Author's site" from the menu above.
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2 Responses to Reasons why I pass on Chesapeake energy

  1. Aly says:

    Thank you for the article, jrv. It’s well written.

    I agree that buying CHK for the reasons you mentioned isn’t advisable, after thinking about what you wrote. I added the book you mentioned to my reading list.

    cheers!

  2. jrv says:

    Thanks Aly, please rate the article positively if you liked it and have not yet done it.

    I have lots of electronic books, if you also have some we could trade them. Do not doubt to let me know if you’re interested.

    Cheers!
    jrv

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