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  • Electric Utilities: The American Way Vs. Germany And Australia [View article]
    "These advantages explain why utilities increasingly dominate the market for rooftop solar installations." - What is the basis of this comment? It is only just recently that a utility even announced entrance into the rooftop solar space. SCTY has approximately 30% of the residential space and Vivint (soon to be public) follows with 9%. The others are Sungevity, Solar Universe and Verengo. SunEdison is a major player in commercial space. The graph he is showing is for overall installations. The utility portion refers to large "utility" scale systems (20+ MW) that are often used to meet Renewable Portfolio Standards requirements. These are predominantly not rooftop installations and do not connect at distribution grid voltages. The cost advantage claim also makes the same mistake. The author is severely misinformed on these points and it undermines the entire article.

    His comment on the gas spread also seems off. "Expect this gap to widen as the Continent's dependence on Russian gas supplies grows and buyers wait for less expensive US exports to ramp up." The disconnect between US and global gas prices is due to insufficient export infrastructure to move cheap US gas onto the global market. Over the long term (years), one should expect the gap to close.

    Claiming that the fact that the U.S. does not have a single national competitive market for supply is not really relevant to the long term challenges posed by distributed solar. California and Hawaii face the greatest challenges and are not competitive supply markets. Texas is, generally, a competitive supply market and is only starting to see significant increases in solar installations. Low gas prices limit the attractiveness of solar in TX for a range of reasons.

    The author furthermore fails to mention the impact of net metering and the existing mismatch between revenue collection based on rate structure and the cost structure to deliver utility service.

    Whether or not DG solar causes significant financial impairment to utilities remains to be seen, but the rationale cited in this article to not worry often misses the mark. Solar DG will have clear impacts on the structure of the industry and approach. One only needs to look to recent legislation and court rulings that are slowly starting to deregulate regulated markets. Furthermore, it is critical to distinguish between different types of companies - e.g., NRG is not a comparable company to PNW.
    Sep 3, 2014. 01:33 AM | 1 Like Like |Link to Comment
  • Don't Let High Fees Erode Your Retirement Savings [View article]
    You seem to be equating distributions with returns in your posts. This is not always correct in a CEF. Sometimes there is principal in the distribution which is not part of a performance return. This is a dangerous assumption to make.

    So quite possibly you've found some great CEFs with stellar underpaid managers, perhaps you'll share those tickers with the rest of us. However, it is indisputable that the compensation paid to the fund managers cannot be paid to the shareholders as well. And while you might say those are dollars that are not coming our of your pocket; those dollars could have gone into your pocket in a case where the managers/overhead were less. So hopefully you are getting good value on your picks and those managers are worth what they are getting paid.
    Aug 1, 2014. 02:20 AM | Likes Like |Link to Comment
  • Don't Let High Fees Erode Your Retirement Savings [View article]
    In theory, yes you want the highest final return. However, the obvious challenge is how do you know in advance what fund is going to return the most on an after fee basis? If a fund has higher fees, then it simply requires a greater level of out performance. If you consider large cap domestic equity funds - how much out performance can any one mutual fund manager produce?
    Jul 30, 2014. 08:11 PM | 1 Like Like |Link to Comment
  • The Great Electric Company Growth Opportunity [View article]
    Could have expanded the discussion by including Natural Gas which also supplies a pretty big chunk of energy in the U.S. and also has direct applications for heating & cooking, electricity production and in NGVs.
    Jul 17, 2014. 12:46 AM | Likes Like |Link to Comment
  • Top Paying Dividend Stocks By Industry [View article]
    I've updated these tables again for May 16, 2014:

    All the archived results are also available.
    May 17, 2014. 03:55 PM | Likes Like |Link to Comment
  • Is The Vanguard High Dividend Yield ETF Primed For Dividend Growth? [View article]
    Ok, it was not very clear from "income generated by these 25 stocks, as weighted by VYM" how you weighted and I was trying to figure that out. Sounds good. You can also use appropriate weights and figure out other metrics (ratios, etc..) and exposure to different holdings.
    May 1, 2014. 01:07 PM | 1 Like Like |Link to Comment
  • Is The Vanguard High Dividend Yield ETF Primed For Dividend Growth? [View article]
    I think this analysis is flawed. If you weight the individual dividend growth rates by the stocks share of the ETF's holdings, you will not get the weighted average dividend growth. You would need to adjust for dividend yields. You should be weighting the company's dividend contribution to the total dividends produced by the ETF. However, the article is not very clear in what the weighting factor was - seems to imply by holdings.

    The quick way to think about it is assuming a very simple ETF. It has two stocks. Let's say each is 50% of the ETF's holdings and the dividend growth of stock A is 20% and stock B is 10%. The author's method would give you a 15% growth rate (50% weighting on 20% and 50% weighting on 10%) However, you've not accounted for the fact that A might have a yield of 4% while B has a yield of 2%.

    So year 1 dividends are 3% or if we assume $100 ETF price, $3, with A contributing $2 and B contributing $1.
    Authors approach would give year 2 dividend at (1+15%) x $3 = $3.45

    Correct year 2 dividend would be $2 x (1+20%) + $1 x (1+10%) = $3.50 or 16.7% growth.
    May 1, 2014. 01:54 AM | 1 Like Like |Link to Comment
  • Coke And Pepsi: Applying DuPont Analysis [View article]
    When looking at the companies, I saw that as a favorable point for PEP. Still waiting for the sugary beverages are doomed crowd to show up. While salty snacks are exactly great for you, they seem to lack the general health concerns around obesity and sodas or pop.
    Apr 29, 2014. 01:51 AM | Likes Like |Link to Comment
  • Coke And Pepsi: Applying DuPont Analysis [View article]
    It is a fair point. Also, the point of the article was to make a comparison. It does not necessarily mean that KO is currently a bad investment, just that PEP seems more favorable based on this look at it.

    Over time you could look at it say, at any given point let me try to buy the more favorable/better value investment and over time you end up owning both. This assumes that you tend not to sell, but just buy for the long term.

    However, from a strictly financial point of view, the argument could be that it PEP and KO are very similar and one appears to be undervalued relative to the other, then go long PEP and short KO and try to capture the spread. For most investors and myself right now, this is getting a little too fancy.
    Apr 29, 2014. 01:49 AM | 1 Like Like |Link to Comment
  • SolarCity And The Dark Underbelly Of The PPA Model [View article]
    Some good broad based points, but some other gaps and some incorrect facts.

    The quick point is that I do think the author is correct that there are some solar thermal applications that would be quite economic and there is significant potential to implement them and should be done before solar PV. However, there are also a lot of energy efficiency ideas that should be implemented even before solar thermal.

    The first gap is the broad discussion around solar thermal without clearly marking what that really means. The author discusses it in the document and then mentions ivanpah in the comments. These are not necessarily the same technologies. Ivanpah is a concentrated solar "power tower" that harnesses the heat from solar to make steam to power steam turbines to make electricity. Other types of solar projects can store the heat in the form of molten salt at really high temperatures. Most residential solar thermal systems refer to simply placing a large black plastic water receptacle on the roof to use the sunlight to raise the temperature of the water, kind of like making solar tea. The hot water is then used for heating purposes. The author's description of the reflectors and such are more akin to solutions used in utility scale systems. I suspect they could be installed for residential systems, but I've not heard of that being done. Sounds inefficient from an economic perspective. This is confusing heat energy and electrical energy.

    The factual issues are that solar thermal in the form of Ivanpah is eligible for the same 30% ITC as solar PV.

    Geothermal is eligible for just 10%. But the solar PV is set to drop to 10% in 2017 anyways. Should note that residential incentive structures might be different.

    The next point is already made - the comparison of efficiencies is not the right comparison. The right metric is to look at the cost per unit of energy produced.

    I also don't believe the homeowner and his friends example. First, the average resident is not spending $12,000 a year on energy - assuming this is including electricity and natural gas, but not gasoline/diesel. That is way off typical. I also don't buy the 75% savings since that means you would have to have over 75% of spend on heating applications alone. Based on EIA data, average residential energy consumption is less than 60% for heating purposes. This is like saying you can magically get your heating energy for free. The example could given could use a little more rigor to dig into the assumptions.
    Apr 26, 2014. 05:19 PM | 1 Like Like |Link to Comment
  • What Is Wrong With Solar Leases And PPAs And How Can The Industry Fix Them? [View article]
    30% Federal ITC drops to 10% starting January 1, 2017. Possibly it will get extended though.
    Apr 20, 2014. 02:42 PM | Likes Like |Link to Comment
  • Dividend Reinvestment Revisited: The Coca-Cola Millionaires [View article]
    Thanks for the note - you're spot on. Good luck with your investing.
    Apr 15, 2014. 06:32 PM | Likes Like |Link to Comment
  • Dividend Reinvestment Revisited: The Coca-Cola Millionaires [View article]
    ok, was not sure since for someone not used to that concept - it is not exactly easy to explain. Thanks for reading my articles.
    Apr 15, 2014. 05:07 PM | Likes Like |Link to Comment
  • Dividend Reinvestment Revisited: The Coca-Cola Millionaires [View article]
    My thinking is this - in general, do the opposite of the emotions. If you're feeling exuberant, you probably want to check things over some more. If you're feeling panicked, it's probably too late to sell anyways, perhaps time to buy. Of course over time, you reset how you respond.

    “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” - Warren Buffett
    Apr 13, 2014. 11:55 PM | 1 Like Like |Link to Comment
  • Dividend Reinvestment Revisited: The Coca-Cola Millionaires [View article]
    Here are a couple considerations I think about for doing a DRIP or some sort of automatic reinvestment. Shorthand I'll call all of these DRIPs - there might be some technical differences though.
    1. What is the time frame over which you are making the investment? - Longer time frames would lead me more towards the DRIP.
    2. Is the asset in a tax advantaged account? - if yes then I lean to DRIP, I believe that everything I have in one of these accounts is on DRIP (these are also super long term time frames).
    3. Can you cover the tax liability with earnings? - if yes, DRIP makes sense
    4. Is the bookkeeping simple (taxable accounts)? - I would be inclined to not DRIP taxable accounts if the amounts were small and the bookkeeping was not automated. I don't think this is really an issue these days though.
    5. Are you willing to keep track of the stock? - if yes DRIP makes more sense, but you should always be keeping tabs on the portfolio is it ridiculous overvalued, are there warning signs, etc.. another point here is that once you have a position and price changes you should revisit, the question is always are you a buyer or seller of a stock at given price, whether you have a position or not.
    6. Transaction costs - how do transaction costs occur in DRIP or otherwise? If the amounts to reinvest are small and the transaction costs are 0 on the DRIP, but would cost something else where, this is a plus for the DRIP - this is not withstanding concepts around market timing and also what you think of the invest itself.

    If you don't DRIP, but invest some capital on a regular basis that is pretty much the same thing and should ultimately get similar results. I like DRIP concepts on broad indices/funds/bond funds to make sure I keep adding to the portfolio on a regular basis. It is also important to note that the bigger question is have you picked the right security as opposed to does a DRIP make sense. Hope this helps you think about your situation.
    Apr 13, 2014. 11:48 PM | 1 Like Like |Link to Comment