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Capt. Spaulding

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  • American Water Works, Low-Beta Hero [View article]
    Excellent article. Clear, well-reasoned, and well-presented. I look forward to reading more of your work.

    Personal note: AWK is one of the little gems in my portfolio, and it is one of the stocks that convinced me to make low-beta dividend-payers the core of my portfolio. I purchased it late in October 2009. Since then, AWK's price has risen by about 170% vs. a gain of a little more than 90% for the S&P 500. And that return excludes dividends. Not bad for a "boring" investment.
    Dec 13, 2014. 10:05 AM | 2 Likes Like |Link to Comment
  • California Resources Corporation Is A Spin-Off With A Substantial Opportunity In The Golden State [View article]
    Here is the question I ask myself every time a company in which I own stock decides to spin off a business to shareholders: what does management know that I don't? In other words, if the business they are spinning off has such great prospects, why aren't they keeping it on the company's books?

    Some spinoffs unlock value and work out well for shareholders; just ask those of us who hold MO, PM, KRFT, and MDLZ. But others don't. No one knows what will happen with CRC, but I tend to agree with the contributors who think that the operating environment in California is particularly burdensome.

    disclosure: long OXY; holding CRC (for now)
    Dec 6, 2014. 04:11 PM | Likes Like |Link to Comment
  • The Black Friday Massacre [View article]
    This just in. File under "Oil and Geopolitics."
    Dec 2, 2014. 03:30 PM | Likes Like |Link to Comment
  • The Black Friday Massacre [View article]

    Excellent article, as usual. Once again, thank you for sharing your thoughts.

    One aspect of the discussion that hasn't been getting enough attention, IMO, is the foreign policy gamesmanship surrounding the gyrations in the oil price. The three-dimensional chess board of international politics includes the desire by many state actors to put pressure on Russia and Iran; Saudi Arabia's internal and external interests; the parlous state of the smaller OPEC producers such as Venezuela and Nigeria; and the extent to which the US government is wiling to let the domestic oil and gas production boom suffer in an effort to further foreign policy goals. The interplay of these factors adds more layers to what already is a dicey fundamental situation characterized by oversupply, as strong dollar, and weakening global economic activity.

    That's quite a kettle of fish. My two cents: there eventually will be an excellent chance for long-term investors to step in an buy top-quality stocks at bargain prices, but that opportunity isn't in sight yet. Oil prices may well have further to decline, and not just for economic reasons. Patience, and prudence, ought to be the watchwords in the weeks and months ahead.
    Nov 30, 2014. 09:01 PM | 4 Likes Like |Link to Comment
  • Stocks: The Hunt For Red October [View article]

    Excellent points.

    re US economic data: A look beneath the surface shows that, in many respects, the present economic recovery has been a Fed-fueled bounce off extremely low levels rather than the kind of healthy, robust, self-sustaining expansion that has followed past downturns. IMO, investors need to keep this in mind as they assess how long the stock's market's bull run is likely to last.

    re the source of real power: Orwell was right, wasn't he? And so was Churchill, who made sure that he was the one wrote history. (Lucky for us that both were on the right side.)
    Oct 4, 2014. 03:39 PM | 3 Likes Like |Link to Comment
  • Stocks: The Hunt For Red October [View article]
    Another thoughtful, well-written piece. Thanks again!

    Funny you should mention the strength of the US dollar.... I've been looking at a few correlations recently, and found an interesting one -- the relationship between the $ and the price of oil. It's well-know that an increase in the value of the dollar dampens commodities; here's what has been happening with oil

    From Jan. 1, 2009, to date, the correlation between UUP and OIL has been -0.43. From Jan. 1, 2014, to date, the figure has been -0.58.

    Just sharing....
    Oct 4, 2014. 02:47 PM | 1 Like Like |Link to Comment
  • Seadrill: How To Play With A Falling Knife [View article]
    Nice to see an actionable article, even though I happen to disagree with the conclusions.

    IMO, there is no need to go anywhere near a stock/company such as SDRL, with its own inherent industry risks and overlay of political risk. (I speak from hard-won experience, having lost some money during one of this stock's past gyrations.)

    One of the great things about the marketplace is that it always offers other opportunities. All it takes is some work to unearth them.
    Sep 30, 2014. 09:47 AM | 1 Like Like |Link to Comment
  • Putin Is Winning The Cold War: Fight Back With These 3 Natural Gas Winners [View article]
    Food for thought: Blackstone, which is run by some pretty savvy folks, appears to be getting out of Russia. Just saying....
    Sep 21, 2014. 04:55 PM | Likes Like |Link to Comment
  • Gazprom: High Dividend Yield + Some Upside Potential [View article]
    More food for thought: Blackstone, which is run by some fairly savvy people, appears to be getting out of Russia.
    Sep 21, 2014. 04:53 PM | 1 Like Like |Link to Comment
  • U.S. Stocks: All Better Now? [View article]
    "Preserve capital." That is the one phrase that every investor ought to have engraved on a plaque above his or her desk. Now more than ever, in my view.

    Watch Eric's trading channels, and watch the market's leadership. The narrower the leadership, the brighter the yellow lamp glows.
    Sep 18, 2014. 09:41 AM | 4 Likes Like |Link to Comment
  • Is A Stealth Liquidation In Stocks Underway? [View article]
    Another fine, thoughtful article by Eric. Thank you once again.

    Eric and Retired Colonel touch on something very important: correlations among asset classes and within the stock market. History shows that investors need to pay attention when correlations across many disparate type of assets begin to converge. That could be a sign that a deep, high-volume setback of the "no place to hide" variety is starting to take shape beneath the surface of the S&P 500 and other major market measures.

    What are the odds that such a setback will occur? No one knows. My two cents is that -- barring a major geopolitical shock or similar black swan event -- any coming correction is likely to be a slow-erosion rather than an earthquake. That's based on the assumption that investors will realize that the withdrawal of Fed stimulus is a good thing, one that will remove distortions in the financial markets and let the pricing/capital-alloca... mechanism function more effectively.

    Nonetheless, however a coming correction plays out, Eric's warnings are well-taken. If he ever decides that it's time to "head for the hills," I hope that he'll publish an article telling us so before he starts running.
    Sep 16, 2014. 10:30 AM | 6 Likes Like |Link to Comment
  • Gazprom: High Dividend Yield + Some Upside Potential [View article]
    This is from the Financial Times, Sep. 6:

    "Russia's Gazprom Bank and oil producer Gazprom Neft will fall under new sanctions approved by the European Union on Friday, Reuters cited an EU diplomat as saying. The sanctions reportedly include a new ban on raising capital in the 28-nation bloc.

    "The sanctions were agreed against Russia for its alleged role in the Ukrainian crisis, the diplomatic source said.

    "According to The Financial Times, which managed to obtain a document outlining the sanctions, all Russian state-controlled companies with assets of more than one trillion rubles (US$27 billion) that receive more than half their revenue from “the sale or transportation of crude oil or petroleum products” will be hit by the ban.""
    Sep 8, 2014. 01:05 PM | 1 Like Like |Link to Comment
  • Gazprom: High Dividend Yield + Some Upside Potential [View article]
    pim1 asks: "Who can tell me that why Gazprom is valued (P/E) wise only 1/4 of STATOIL besides one is russian [sic] company and another is Norway company?"

    I can. The reason is that Norwegian society and Norwegian companies operate under the rule of law. Russian society and Russian companies do not.
    Sep 7, 2014. 03:15 PM | 3 Likes Like |Link to Comment
  • Gazprom: High Dividend Yield + Some Upside Potential [View article]
    I can not understand why any investor would risk taking a position in the securities of any Russian company, or in those of any non-Russian company that derives a sizable portion of its business from that country. Investing in Russia entails an extraordinary set of risks. On the economic front, demographic trends indicate that it is all but certain that Russia's long-term decline, which already is under way, will accelerate in the next several years, despite the country's wealth of natural resources. Meanwhile, it is run by a kleptocracy that does not acknowledge the rule of law, let alone honor contracts. That's a volatile mix, to say the least.

    One of the glories of the marketplace is that it always presents alternate opportunities. There are many, many more-attractive opportunities around the world than those related to Russia. Just ask folks who held Czarist-era bonds.
    Sep 6, 2014. 04:45 PM | 1 Like Like |Link to Comment
  • Investissements Sans Frontieres [View article]
    re "cynic:"

    Ambrose Bierce defined a cynic as someone who sees things as they are, not as they ought to be. Just sayin'....
    Sep 5, 2014. 03:30 PM | 1 Like Like |Link to Comment