RIG

Transocean

$4.97 5.5B market cap February 1, 2026

Transocean Ltd RIG BUFFETT / MUNGER / KLARMAN SUMMARY

1 SNAPSHOT

Price$4.97

Market Cap5.5B

2 BUSINESS

Transocean is the world's largest offshore drilling contractor with the highest-quality ultra-deepwater fleet, trading at 0.67x book value due to $6.7B net debt overhang from the 2015-2020 industry depression. With $6.7B contracted backlog, 96%+ utilization through 2025, and day rates reaching $500K-$635K, the company is generating positive free cash flow ($193M in 2024) for the first time in years. Mohnish Pabrai's $76M position (22.6% of his portfolio) at $3.12 signals deep value opportunity, but the stock has run 59% since his purchase. At $4.97, near DCF fair value with limited margin of safety, this is a WAIT for patient investors seeking entry at $3.50 or below, where the risk-reward becomes compelling for this leveraged cyclical recovery play.

3 MOAT NARROW

World's only 8th-generation drillships, 8 of 12 global 1,400-ton hookload rigs, largest contract backlog in industry, no newbuilds ordered globally

4 MANAGEMENT

CEO: Jeremy Thigpen

Good - Prioritizing debt paydown appropriately; $715M reduction planned 2025

5 ECONOMICS

23.1% Op Margin

2.2% ROIC

-32% ROE

0.19B FCF

65% Debt/EBITDA

6 VALUATION

FCF Yield3.5%

DCF Range4.5 - 6.5

At fair value - limited margin of safety at $4.97

7 MUNGER INVERSION

Kill Event	Severity	P()	E[Loss]
Debt service in cyclical downturn - $7.2B total debt requires continued operational execution	HIGH	-	-
Energy transition / ESG pressure reducing institutional ownership and customer capex appetite	MED	-	-

8 KLARMAN LENS

Downside Case

Debt service in cyclical downturn - $7.2B total debt requires continued operational execution

Why Market Right

Oil price collapse below $50 sustained; Major contract cancellation; Equity dilution for debt management; Rig incident / safety issue

Catalysts

Deleveraging below 3.5x Net Debt/EBITDA (late 2026 target); Dividend reinstatement announcement (2027); Day rate acceleration above $600K average; Oil price spike driving customer capex increase; Strategic M&A interest from larger energy player

9 VERDICT WAIT

C+ Quality Weak - High leverage (5.9x Net Debt/EBITDA) but improving; liquidity adequate at $1.4B; debt refinancing on track

Strong Buy$3

Buy$3.5

Fair Value$6.5

Wait for pullback to $3.50 for initial position; do not chase at current levels

🧠 ULTRATHINK Deep Philosophical Analysis

Transocean (RIG) - Ultrathink Analysis

The Deep Philosophical Examination

"All I want to know is where I'm going to die, so I'll never go there." - Charlie Munger

The Core Question: What Makes This Business Special (Or Not)?

Transocean operates the most sophisticated floating factories ever built by mankind. Each drillship represents $600-800 million of steel, machinery, and technology capable of reaching oil reservoirs beneath two miles of ocean and seven miles of rock. The Deepwater Atlas and Titan are engineering marvels - the only eighth-generation drillships in existence, designed to handle pressures of 20,000 PSI that would crush most industrial equipment like tin cans.

But here is the uncomfortable truth: Transocean does not own oil. It does not own reserves. It rents out enormously expensive equipment to companies that do. When oil companies stop drilling - as they did from 2015-2020 - these billion-dollar assets sit idle, depreciating, burning cash for maintenance while generating nothing.

This is not a compounder. This is a leveraged bet on a specific industrial cycle.

The question is not whether Transocean has good assets (it does). The question is whether the cycle will cooperate long enough for the company to escape its debt trap before the next downturn arrives.

Moat Meditation: The Illusion of Competitive Advantage

Buffett would shake his head at this one. Where is the recurring revenue? Where is the pricing power that persists through cycles? Where are the customer switching costs?

Transocean's "moat" is more accurately described as "temporary supply-side constraints." No one is building new drillships because:

The last cycle bankrupted half the industry
Capital costs $700M+ per rig
Banks won't finance newbuilds
ESG constraints limit investor appetite

This creates a tight supply-demand situation TODAY. Day rates have climbed from $200K to $500K+. Fleet utilization approaches 100%.

But this is not a moat - it is a cyclical tailwind. When oil prices crashed in 2014-2015, Transocean's stock fell 90%. The "moat" evaporated because it was never really there. The barriers to entry protected against new entrants, but they did not protect against demand destruction.

Munger would ask: "In 10 years, will this moat be wider or narrower?"

The honest answer: Narrower. The energy transition is not happening tomorrow, but it is happening. Oil majors face pressure to reduce offshore drilling. ESG mandates constrain institutional ownership. The long arc bends against offshore drilling.

This is a narrowing moat business in a cyclical upturn. Profitable for a time, but not a permanent holding.

The Owner's Mindset: Would Buffett Own This For 20 Years?

Absolutely not.

Buffett has explicitly avoided commodity businesses, capital-intensive cyclicals, and leveraged companies. Transocean checks all three boxes.

The business requires continuous heavy capital expenditure just to maintain the fleet. A drillship doesn't compound value - it depreciates. Unlike See's Candies, which Buffett can buy once and harvest cash forever, a rig requires reinvestment every few years.

More fundamentally, Transocean cannot raise prices when competitors behave rationally. When utilization tightens, day rates rise. When utilization falls, day rates collapse. Management has no control over this equation - they are price takers in a commodity market.

The only thing that makes Transocean potentially interesting is the debt-to-equity conversion opportunity. At 0.67x book value with improving operations, there is a potential for significant equity gains IF:

The cycle holds
Debt gets paid down
Multiples re-rate

This is a cyclical trade, not a Warren Buffett investment.

Risk Inversion: What Could Destroy This Business?

Path to Zero #1: Oil Price Collapse Brent falls to $40. Customer capex freezes. Contracts get cancelled or renegotiated. Day rates plunge. Operating cash flow goes negative. Debt covenants trigger. Equity wipeout. Probability: 15%. Impact: 100% loss.

Path to Zero #2: Debt Spiral The 2027 maturity wall cannot be refinanced at acceptable rates. Credit markets close. The company issues equity at $2 to survive. Existing shareholders diluted 70%. Probability: 10%. Impact: 70-80% loss.

Path to Zero #3: The Deepwater Horizon Repeat A catastrophic incident on an 8th-generation rig. Billions in liability. Customer contracts cancelled. Fleet grounded pending investigation. Brand destruction. Probability: 2%. Impact: 60-80% loss.

Path to Permanent Impairment #4: Gradual Obsolescence Energy transition accelerates. Oil majors redirect capex onshore. Deepwater projects get shelved. Fleet utilization declines to 70%, then 60%. Day rates fall. Slow death by underinvestment. Probability: 25% over 10 years. Impact: 50-70% loss.

The sum of these tail risks is non-trivial. This is not a sleep-well-at-night investment.

Valuation Philosophy: Is Price Justified By Quality?

At $4.97, Transocean trades at:

0.67x tangible book value ($9.34/share)
10.7x trailing EV/EBITDA
8.7x forward EV/EBITDA

These are not expensive multiples. But they are not cheap either, given:

The business generates negative net income
The balance sheet carries $7.2B of debt
The industry is cyclical and faces secular headwinds

The discount to book value is APPROPRIATE. The fleet value is theoretical - these assets only generate value if utilized. In a downturn, the liquidation value is far below book.

Mohnish Pabrai bought at $3.12 - a 33% discount to today's price and a 65% discount to book. At that level, the asymmetry was compelling: limited downside (assets have floor value), significant upside (deleveraging + multiple expansion).

At $4.97, much of that asymmetry has been captured. The stock has priced in the recovery scenario. What remains is execution risk on debt paydown.

Klarman would say: "The margin of safety has evaporated. This is no longer a value investment - it is a momentum trade on a cyclical recovery."

The Patient Investor's Path: When and How to Act

The Right Framework: Transocean is not a core holding. It is a cyclical special situation requiring:

Precise entry
Limited position size
Defined exit criteria
Acceptance of volatility

Entry Strategy:

Do not chase at $4.97
Wait for volatility (oil price dip, earnings miss, sentiment shift)
Accumulate at $3.50 or below
Strong buy at $3.00

Position Sizing:

Maximum 1-2% of portfolio
This is not a compounder - it is a trade
Size for the scenario where you lose 50% and it doesn't matter

Exit Strategy:

Take profits at $8-10 (book value approach)
Sell if debt/EBITDA increases above 7x
Sell if day rates decline 25%+ from peak
Do not hold through the next cycle downturn

The Munger Final Test: "If this dropped 50% tomorrow, would I buy more or panic?"

At $4.97: I would hold but not add At $3.50: I would add modestly At $3.00: I would add meaningfully At $2.50: I would question my thesis (what does the market know?)

Conclusion: The Sober Assessment

Transocean is a leveraged cyclical turnaround, not a quality compounder. Pabrai's massive position signals deep value conviction, but his entry was at $3.12 - not $4.97.

The business has real assets, improving operations, and a clear deleveraging path. But it also has $7B of debt, no moat that survives a downturn, and secular headwinds from energy transition.

For those who can stomach volatility and size appropriately, this is a reasonable speculation at the right price. That price is not $4.97 - it is $3.50 or below.

The patient investor waits. The offshore drilling cycle will provide another entry point. It always does.

"The stock market is a device for transferring money from the impatient to the patient." - Warren Buffett

Executive Summary

Investment Thesis (3 Sentences)

Transocean is the world's largest offshore drilling contractor with a premium fleet of ultra-deepwater and harsh environment rigs, trading at 0.67x book value despite operating in a recovering offshore drilling cycle. With $6.7B in contracted backlog, improving day rates ($500K-$635K), and management's stated goal to reach shareholder distributions by late 2026, the company represents a leveraged bet on offshore drilling recovery. Mohnish Pabrai's $76M position (22.6% of his portfolio) signals deep value opportunity, but significant debt ($6.7B net debt, ~5.9x EBITDA) creates binary risk characteristics.

Key Metrics Dashboard

Metric	Value	Assessment
Price/Book	0.67x	Attractive
EV/EBITDA	10.6x	Moderate
Net Debt/EBITDA	5.9x	High (declining)
Contract Backlog	$6.7B	Strong visibility
Fleet Utilization 2025	96%+	Excellent
EBITDA Margin	32%	Above industry avg
Free Cash Flow (2024)	$193M	First positive year

Recommendation

VERDICT: WAIT / SPECULATIVE BUY (Small Position Only)
Entry Price: $3.50 (Accumulate)
Strong Buy: $3.00
Current: $4.97 (+59% above Pabrai entry)

Position Size: 1-2% MAX (High risk, cyclical)
Time Horizon: 18-36 months

Phase 0: Opportunity Identification (Klarman Framework)

Why Does This Opportunity Exist?

Complexity/Stigma: Offshore drilling is widely perceived as a "dying industry" due to energy transition narratives, despite continued deepwater oil demand.
Debt Overhang: $7.2B in total debt creates headline risk and keeps many institutional investors away. Balance sheet complexity (multiple tranches, refinancing) adds confusion.
Cyclical Depression Memory: The 2015-2020 offshore drilling depression destroyed capital and created lasting negative sentiment. RIG stock fell from $100+ (pre-2014) to under $2.
Forced Selling / Rebalancing: Index deletions, ETF rebalancing, and institutional mandates (ESG constraints) create selling pressure unrelated to fundamentals.
Mohnish Pabrai's Thesis: His $76M Q3 2025 position at ~$3.12 suggests he sees:
- Asymmetric upside as debt refinancing progresses
- Operating leverage to rising day rates
- Potential for shareholder returns by 2027
- Best risk-reward in offshore drilling sector (consolidated from Noble/Valaris positions)

Phase 1: Risk Analysis (Inversion Thinking)

"All I want to know is where I'm going to die, so I'll never go there." - Munger

Top 3 Ways This Investment Could Fail Permanently

1. Debt Spiral / Liquidity Crisis

Risk: If day rates decline or contracts get cancelled, the company cannot service $7B+ in debt
Probability: 15-20%
Impact: Equity wipeout (100% loss)
Mitigation: $1.4B liquidity, 96%+ utilization through 2025, refinancing completed

2. Prolonged Offshore Drilling Depression

Risk: Oil majors pivot away from deepwater due to energy transition pressure, sustained low oil prices (<$50)
Probability: 20-25%
Impact: 50-80% permanent loss
Mitigation: Premium fleet commands work even in downturn; $6.7B backlog provides 2-year runway

3. Technological/Regulatory Obsolescence

Risk: Deepwater drilling becomes uneconomic vs. alternatives (shale, renewables)
Probability: 10%
Impact: Gradual erosion over 5-10 years
Mitigation: 20,000 PSI capabilities position for frontier developments

INVERSION SECTION

How could this investment lose 50%+ permanently?

Oil prices collapse below $50 sustained for 2+ years
Major contract cancellations from key customers (BP, Petrobras, Equinor)
Debt refinancing fails at critical 2027 maturity wall
Catastrophic rig incident (Deepwater Horizon repeat)
Accelerated energy transition makes deepwater uneconomic

What would make me sell immediately (non-price triggers)?

Management announces equity issuance at significant discount for debt restructuring
Key customer (>15% of backlog) cancels contracts
Day rates decline 30%+ from current levels
CEO departure without clear succession
Material accounting restatement

If I were short this stock, what's my 3-sentence bear case? "Transocean has $7B in debt with negative net income, operating in a sunset industry targeted by ESG mandates and energy transition policies. The offshore drilling cycle is peaking with day rate growth decelerating, while the company continues to dilute shareholders to manage debt. Even at 0.67x book, the equity is worthless if oil prices decline or the debt cannot be refinanced."

Can I state the bear case better than the bears? Partially - the debt risk is real and the cyclical nature creates genuine uncertainty. However, bears underestimate the contracted backlog visibility and the structural undersupply of premium rigs.

Phase 2: Financial Analysis

Income Statement Overview (5-Year Trend)

Metric	FY2020	FY2021	FY2022	FY2023	FY2024	Trend
Revenue	$3.15B	$2.56B	$2.57B	$2.83B	$3.52B	Recovering
Gross Margin	19.6%	18.8%	24.9%	30.8%	38.3%	Improving
EBITDA	$359M	$190M	$264M	$471M	$1,138M	Strong growth
Net Income	($632M)	($590M)	($621M)	($970M)	($512M)	Narrowing losses
Interest Expense	$493M	$525M	$607M	$646M	$362M	Declining

Key Observations:

Revenue recovering to pre-pandemic levels
Gross margins doubled from 2021 to 2024 (day rate leverage)
EBITDA tripled in 2 years - operating leverage evident
Interest expense declining due to refinancing success
Net losses narrowing - approaching breakeven

Balance Sheet Analysis

Metric	FY2024	Assessment
Total Assets	$19.4B	PP&E heavy (rigs)
Total Debt	$7.2B	High but declining
Cash	$560M	Adequate
Net Debt	$6.7B	5.9x EBITDA
Book Value	$10.3B	$7.34/share
Shareholders' Equity	$10.3B	Positive

Debt Structure:

Short-term: $740M
Long-term: $6.5B
Key maturities: 2027 (addressed), 2029, 2031

Liquidity Position:

Cash: $560M
Restricted cash: $365M
Revolver capacity: $510M (after June 2025)
Total liquidity: ~$1.4B

Cash Flow Analysis

Metric	FY2022	FY2023	FY2024	2025E
Operating CF	$120M	$164M	$447M	~$700M
CapEx	($380M)	($427M)	($254M)	($130M)
Free Cash Flow	($260M)	($263M)	$193M	~$570M

Key Insight: FCF inflection in 2024 is critical - newbuild capex complete, sustaining capex only ~$130M/year going forward.

Valuation Analysis

Graham Number:

Graham Number = sqrt(22.5 x EPS x BVPS)
EPS (TTM) = -$3.37 (Not applicable - negative earnings)

Net Current Asset Value:

NCAV = Current Assets - Total Liabilities
NCAV = $2,452M - $9,086M = -$6,634M (Negative - not applicable)

Tangible Book Value:

TBV = Book Value - Intangibles - Goodwill
TBV = $10,284M - $0 - $0 = $10,284M
TBV per share = $10,284M / 1,101M shares = $9.34
Current Price ($4.97) = 53% of TBV

EV/EBITDA Valuation:

Current EV = Market Cap + Net Debt
EV = $5.5B + $6.7B = $12.2B
2024 EBITDA = $1.14B
2025E EBITDA = ~$1.4B

Current EV/EBITDA = 12.2B / 1.14B = 10.7x
Forward EV/EBITDA = 12.2B / 1.4B = 8.7x

Sum-of-Parts / Asset Value:

Fleet Value (26 ultra-deepwater + 8 harsh environment):
- 8th Gen drillships (2): $700M each = $1.4B
- 7th Gen drillships (8): $400M each = $3.2B
- Other floaters (24): $200M avg = $4.8B
Estimated Fleet Value: ~$9-10B

Less: Net Debt: ($6.7B)
Implied Equity Value: $2.3-3.3B
Per share: $2.10-3.00

NOTE: This suggests market is pricing significant fleet value above liquidation.

DCF Valuation (Conservative):

Assumptions:
- 2025E FCF: $570M
- 2026E FCF: $800M
- Terminal growth: 0%
- Discount rate: 12% (high for cyclical/levered)
- Years 1-5: Avg FCF $700M/year

NPV = $700M x (1 - 1.12^-5) / 0.12 + Terminal
NPV = $2,523M + $2,917M terminal
NPV Equity = $5,440M / 1,101M = $4.94

Fair Value Range: $4.50 - $6.50

Margin of Safety Analysis

Valuation Method	Value/Share	vs Current	MOS
Tangible Book Value	$9.34	$4.97	47%
DCF (Conservative)	$4.94	$4.97	0%
Asset Liquidation	$2.50	$4.97	(99%)
EV/EBITDA Fair Value	$5.50	$4.97	10%

Assessment: Trading near DCF fair value but well below book value. The discount to book is justified by debt risk. Limited margin of safety at current price.

Phase 3: Moat Analysis

Moat Sources

1. Scale & Asset Quality (MODERATE)

Owns world's only two 8th-generation drillships (Deepwater Atlas, Titan)
34 rigs total (26 ultra-deepwater, 8 harsh environment)
8 of 12 global 1,400-ton hookload drillships
Largest contract backlog in industry ($6.7B)

2. Switching Costs (LOW-MODERATE)

Contracts typically 1-3 years
Rig mobilization costs create friction
Customer relationships matter but not sticky

3. Reputation & Track Record (MODERATE)

Industry leader in safety metrics
Premium day rates evidence of quality perception
20K PSI capability positions for frontier work

4. Barriers to Entry (HIGH - for now)

Newbuild cost: $700M+ for 8th gen drillship
3-4 year construction time
No current shipyard orders for new deepwater rigs
Supply constrained for foreseeable future

Moat Durability Assessment

Threat	Severity	Timeline	Mitigation
Technology disruption	2/5	10+ years	20K PSI capability
Regulatory change	3/5	5+ years	Global diversification
New entrants	1/5	5+ years	No newbuilds ordered
Customer power	3/5	Ongoing	Premium fleet commands rates
Energy transition	4/5	10-20 years	Long-duration resource

10-Year Moat Trajectory: NARROWING (energy transition headwind) but DEFENSIBLE for next 5-7 years due to supply constraints.

Phase 4: Management & Incentive Analysis

Leadership

CEO: Jeremy Thigpen (since 2015)
Tenure: 10+ years through industry depression
Track Record: Navigated bankruptcy avoidance, refinanced debt, maintained premium fleet

Capital Allocation Track Record

Use of Cash	% (2024)	Assessment
Debt Paydown	78%	Appropriate priority
Maintenance CapEx	18%	Necessary
Dividends	0%	Suspended since 2015
Buybacks	0%	Debt priority correct
M&A	4%	Minor (Norge acquisition)

Management Guidance:

Target Net Debt/EBITDA < 3.5x by late 2026
Shareholder distributions possible approaching end of 2026
$715M debt reduction planned for 2025

Insider Ownership

Insider ownership: 13.6%
Institutional ownership: 71.3%
Mohnish Pabrai: 2.74% of company (24.4M shares)

Phase 5: Catalyst Analysis

Positive Catalysts

Catalyst	Timeline	Probability	Impact
Debt below 3.5x EBITDA	Late 2026	65%	+30-50%
Dividend reinstatement	2027	40%	+20-40%
Oil price spike (>$90)	Variable	30%	+50-100%
M&A interest	2025-2027	15%	+30-50%
Day rate acceleration	2025-2026	50%	+20-30%

Negative Catalysts

Catalyst	Timeline	Probability	Impact
Oil price collapse (<$50)	Variable	15%	-50-70%
Contract cancellations	2025-2026	10%	-30-50%
Equity dilution	2025-2026	25%	-15-30%
Recession / demand drop	2025-2026	20%	-30-50%

Phase 6: Decision Synthesis

Expected Return Scenarios

Scenario	Probability	Price Target	Return	Weighted
Bull (Deleveraging success)	25%	$9.00	+81%	+20%
Base (Gradual improvement)	45%	$6.00	+21%	+9%
Bear (Stagnation)	20%	$3.50	-30%	-6%
Disaster (Debt crisis)	10%	$1.00	-80%	-8%
Expected Return	100%			+15%

Position Sizing

Base Position: 2%
Margin of Safety Factor: 0.7 (limited MOS at current price)
Quality Factor: 0.6 (cyclical, leveraged)
Catalyst Factor: 1.0 (multiple catalysts present)
Risk Adjustment: 0.5 (high debt risk)

Recommended Position = 2% x 0.7 x 0.6 x 1.0 x 0.5 = 0.42%

RECOMMENDATION: 0.5-1% position maximum
Or WAIT for pullback to $3.50 for 2% position

Sell Triggers (Pre-Defined)

Thesis Break: Day rates decline 25%+ from current levels
Debt Crisis: Liquidity falls below $500M without refinancing plan
Management Change: CEO departure without clear succession
Valuation: Stock exceeds $10 (>1.3x book value)

Monitoring Metrics

Metric	Current	Watch Level	Action if Breached
Day Rates	$500K+	<$400K	Review position
Utilization	96%	<85%	Reduce position
Net Debt/EBITDA	5.9x	>7.0x	Review thesis
Backlog	$6.7B	<$5.0B	Review thesis
Oil Price (Brent)	$75+	<$55	Reduce position

Final Recommendation

====================================================================
                    INVESTMENT RECOMMENDATION
====================================================================
Company: Transocean Ltd           Ticker: RIG
Current Price: $4.97              Date: February 1, 2026
--------------------------------------------------------------------
VALUATION SUMMARY
--------------------------------------------------------------------
| Method                  | Value/Share | vs Current Price |
|-------------------------|-------------|------------------|
| Tangible Book Value     | $9.34       | 47% discount     |
| DCF (Conservative)      | $4.94       | At fair value    |
| Asset Liquidation       | $2.50       | 99% premium      |
| EV/EBITDA (8x forward)  | $5.50       | 10% discount     |
--------------------------------------------------------------------
INTRINSIC VALUE ESTIMATE: $5.50 - $6.50 (base case)
MARGIN OF SAFETY: 0-10% at current price
--------------------------------------------------------------------
RECOMMENDATION: [ ] BUY  [ ] HOLD  [X] WAIT  [ ] SELL

For existing holders: HOLD
For new positions: WAIT for $3.50 entry
--------------------------------------------------------------------
ENTRY PRICES:
Strong Buy (30% MOS):     $3.50
Accumulate (20% MOS):     $4.00
Fair Value:               $5.50
Take Profits:             $8.00
Sell:                     $10.00
--------------------------------------------------------------------
POSITION SIZE: 0.5-1% MAX (speculative)
CATALYST: Deleveraging to <3.5x Net Debt/EBITDA (Late 2026)
PRIMARY RISK: Debt service in prolonged downturn
SELL TRIGGER: Day rates <$400K or liquidity <$500M
====================================================================

Why WAIT Instead of BUY?

Price Run-Up: Stock up 150%+ from 52-week low, 59% above Pabrai's entry
Limited MOS: At $4.97, trading near DCF fair value
Cyclical Peak Risk: Day rates may be peaking; market could soften
Better Entry Likely: Offshore drilling is volatile; $3.50 entry achievable

When to Buy

At $3.50 or below: Accumulate 1-2% position
At $3.00 or below: Strong buy, consider 2-3% position
On debt refinancing news that improves credit profile

Sources Used

Primary Data (AlphaVantage MCP)

Income Statement (FY2020-2024)
Balance Sheet (FY2022-2024)
Cash Flow Statement (FY2020-2024)
Company Overview
Historical Price Data
Earnings Call Transcripts (Q2-Q3 2024)

Web Research

Analysis prepared using the Buffett/Munger/Klarman investment framework. This is not investment advice. The author may hold positions in securities discussed.