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Bob Johnson

 
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  • Kinder Morgan: Hitting The Shale Sweet Spot [View article]
    David, I'm a happy camper with KMP. You've created quite a reference library on the Kinder companies, and I'll dig into the details when I have more time. Meanwhile, the money keeps coming in. Best, Bob J
    Jun 22, 2014. 09:39 PM | 1 Like Like |Link to Comment
  • The Perfect Dividend Stock [View article]
    Thanks, Old Guy. Every investor has different goals, finds different aspects of a stock attractive and has different fears. Happily, there's a wealth of choices in the stock market. Best, Bob J
    Jun 21, 2014. 10:10 PM | 2 Likes Like |Link to Comment
  • Floating-Rate Senior Bank Loans: Safer, Higher Yielding Alternative To Short-Term Bonds [View article]
    Anthony, A very reasonable explanation. Thank you. Bob J
    Jun 21, 2014. 10:03 PM | 1 Like Like |Link to Comment
  • Floating-Rate Senior Bank Loans: Safer, Higher Yielding Alternative To Short-Term Bonds [View article]
    Anthony,

    Thank you for the informative article.

    I noted that you used the phrase "low risk" several times. However, you state, "Every fund is different, but generally, +/- 90% of the investments are loans with B, BB or BBB credit quality." In the financial world, those grades are not considered "low risk", but disparagingly are sometimes referred to as junk grades. While it may be true that the funds mitigate risk through diversity and their expensive due diligence, these funds do not consist of high quality, often called investment grade, securities. These would begin with AAA and go through AA and to BBB+, depending on which of the three rating systems is used.

    I don't believe you intended to mislead and I think I know what your were trying to say. However, I believe the use of terms could be confusing to some. I also believe that the fact that it is a levered fund adds to the risk in some circumstances.

    I hold LIQ and JNK.

    Best regards,
    Bob J
    Jun 21, 2014. 12:05 PM | 3 Likes Like |Link to Comment
  • Vale Hit Hardest By Global Iron Ore Glut [View article]
    Iron Ore Price Crashes Through $90 - 6/17/2014

    "Benchmark iron ore fell more than 2% on Thursday to fresh lows last seen September 7, 2012.

    According to data from the The Steel Index, the import price of 62% iron ore fines at China's Tianjin port was pegged at $89.00 per tonne, down $1.90 on the day and the first time below $90 in 22 months." http://bit.ly/1jvGEKh
    Jun 17, 2014. 04:37 AM | Likes Like |Link to Comment
  • Is BP Prudhoe Bay Fund Really A Good Short? [View article]
    On June 16, 2014 the Iraq issues have been cooking for a couple of weeks, and BPT is up to $99. How much of the oil on the planet is in safe places? COP should benefit too.

    Kevin Kaiser is a reckless and irresponsible young man. Ignore him.

    Best,
    Bob J
    Jun 16, 2014. 05:59 PM | 2 Likes Like |Link to Comment
  • Vale Hit Hardest By Global Iron Ore Glut [View article]
    Thanks silver.

    I truly value your thoughtful and well researched comments.

    Best,
    Bob J
    Jun 16, 2014. 09:01 AM | Likes Like |Link to Comment
  • Vale Hit Hardest By Global Iron Ore Glut [View article]
    Silver,
    @Tack,

    In my considered opinion, Vale did well in years past because 1.) the price of iron ore was much higher; 2.) the competitors were not as productive and efficient as they are now.

    Today, with a much lower IO price, about $100 and perhaps headed lower, Vale is not competitive. They are now lagging their competitors in production costs, RIO the lowest at $20/ton. Vale provides a decreasing share of the total IO production as today's production is split roughly into thirds between VALE, RIO and BHP.

    Vale was the leader and a profitable company in different times under different circumstances. Those times are gone, lost in the past. In these competitive times of low commodity prices, the burden of having the bureaucratic and corrupt government of Brazil around Vale's neck weighs heavily. The cost of being more distant from China than Western Australia remains. The past glory of the miner will not return.

    The winning competitive culture of Rio Tinto under Sam Walsh and the thoughtful, disciplined but flexible, leadership of BHP Billiton CEO Andrew Mackenzie drive their firms to their current successes, and their competitive nature assures it will continue into the future.

    Best regards,
    Bob J
    Jun 16, 2014. 08:54 AM | Likes Like |Link to Comment
  • Vale Hit Hardest By Global Iron Ore Glut [View article]
    I really object to being accused of any kind of bias and bigotry. "I know at the base of many Iron Ore bashing articles is an anti-Chinese sentiment."
    I have some Mainland China visa stamps in my passport, probably more recent than yours. I have also been to Hong Kong many times. In addition, I am married to an Asian woman.
    Jun 15, 2014. 01:27 PM | Likes Like |Link to Comment
  • Vale Hit Hardest By Global Iron Ore Glut [View article]
    Tack,

    Sorry, I could have added more detail.

    Rate of Return, in this case, is what is returned to the investor for his investment. Internal rate of return is usually abbreviated IRR, and as I am sure you know is an entirely different thing.

    The Rate of Return, ROR, is what the investor gains over a period of time on an annualized basis. The Total Rate of Return, is price appreciation plus dividends paid. All of the numbers for that comment were taken from F.A.S.T. Graphs which allows you to set different numbers of years for consideration, and displays price appreciation, dividends paid and Total ROR for the period. In addition, it displays the annual increase or decrease in dividend growth for each year.

    Best regards,
    Bob J
    Jun 15, 2014. 01:12 PM | Likes Like |Link to Comment
  • I Have No Fear Of A Market Crash Or A Significant Correction, Here's Why: Part 1 [View article]
    Chuck,

    Thank you for another stimulating article.

    In reflecting on the groups of stocks you presented I availed myself David Fish's CCC spreadsheet and jotted down the 5 year beta of each stock in the first three groups of stocks.

    My observation is as follows:

    7 stocks showing little or no stress, average beta 0.59
    8 stocks showing moderate stress, average beta 0.96
    5 stocks showing substantial stress, average beta 1.18

    I find the observation of hard data very interesting and sometimes very useful. However, I offer no conclusions based on this observation but only suggest it might be of value to ponder it.

    Best regards,
    Bob J
    Jun 15, 2014. 06:33 AM | 4 Likes Like |Link to Comment
  • Vale Hit Hardest By Global Iron Ore Glut [View article]
    silver,

    Companies have to continually redefine themselves as times change. Mining companies historically and at the present take forays into additional ventures to become more completely vertically integrated or to add diversity to their portfolio of revenue sources.

    Southern Copper, SCCO, is largely owned by a holding company which owns several railroads in Mexico as well as a construction business. Some other major miners own or have owned transportation resources and these include Vale with both railroads and ships. BHP is a part owner and developer of ports.

    In diversifying their portfolios, miners often branch into other areas of natural resources. Freeport-McMoRan Copper and Gold, FCX, is back in the energy business. Being purely a copper miner is about as dangerous as being purely and iron ore miner, as the current situation in Indonesia is evidence of. I believe that some miners, including Vale, have been in the forestry business and also the owner operator of pulp and paper mills.

    Glencore, formerly Glencore-Xsastra, defines itself as being a large integrated natural resources company. They are involved in Metals and Minerals, which includes the mining of copper, zinc, nickel and aluminum, as well as the smelting, refining and warehousing of these products. As a byproduct of the zinc mining and refining, they are also a manufacturer of sulphuric acid. They are involved in Energy Products, primarily oil and coal and their storage and freight facilities. Glencore's third area is agricultural products. This includes the production, handling and storage of grains, ois and oil seeds, cotton and sugar. In all, they deal in 90 commodities.

    Mining companies often seem to be in the process of diversification and acquisition or conversely, the process of divesting of non-core assets.

    The important thing, as you so clearly point out, is performance over time. There are price statistics, as you quote and also Total Rate of Return, ROR, figures for various periods, 15, 10 and 5 years. We will also cite the 2 year Dividend Growth Rate, DGR. This is an indicator of how the shareholders have been treated recently

    VALE
    15 year ROR, 19.3%
    10 year ROR, 7.4%
    5 year ROR, -20.1%
    2 year DGR, -25.0%

    RIO
    15 year ROR, 9.9%
    10 year ROR, 3.5%
    5 year ROR, -6.7%
    2 year DGR, 19.0%

    BHP/BBL
    15 year ROR, 13.3%
    10 year ROR, 10.5%
    5 year ROR, -4.3%
    2 year DGR, 7.5%

    BHP/BBL alone has a policy of continually increasing dividends and has done so for 11 consecutive years.

    In the past 10 years, BHP/BBL has had 10 dividend increases. In the past 10 years, RIO has had 7 increases and 3 decreases and VALE has had 7 increases and 3 decreases.

    By these important measures, BHP/BBL has been the steadiest performer and the strongest performer overall for the past 5 years. RIO had a weaker 5 year ROR, but is running a close second. Vale has clearly been the worst performer for the past 5 years, with a 5 year ROR of -20.1% and a 2 year DGR of -25.0%.

    Vale's strong reputation, based on the company it was 15 or 20 years ago, still influences some investors. However, they would be wise to look at the facts concerning more recent performance, as shown in your stock price numbers and the 5 year ROR and 2 year DGR figures above.

    Best regards,
    Bob J
    Jun 15, 2014. 04:23 AM | Likes Like |Link to Comment
  • Walter Energy: A Challenging Short-Term Awaits [View article]
    Interesting article, but lacking some of the usual financial figures.

    PEG Ratio 5-Year, -0.10
    Return on Equity, -50
    EPS TTM, -6.4
    EPS next year, -2.79

    Not a pretty picture.

    Best regards,
    Bob J
    Jun 14, 2014. 11:54 AM | Likes Like |Link to Comment
  • Here Is Why You Shouldn't Buy ConocoPhillips Just Yet [View article]
    Paul,

    And to think I was going to sell my COP which I bought at $58!

    Excellent, thorough and fascinating article.

    You just earned a follower.

    Best regards,
    Bob J
    Jun 14, 2014. 08:19 AM | 1 Like Like |Link to Comment
  • Vale S.A.: A Buy Or A Sell? [View article]
    red99car,

    This article might interest you. It was released yesterday, 6/13 by Motley Fool Australia. http://bit.ly/1kzyvE9

    Best regards,
    Bob J

    formerly crew, 97C ('57 Chevy), Class C stock, 1961-1962
    Jun 14, 2014. 08:01 AM | Likes Like |Link to Comment
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