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Capt. Spaulding

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  • Update: McDonald's Down, But Certainly Not Out [View article]
    Agree with Mr. Steier above.

    McDonald's, the company, is a once-grand ship that is now in need of a stem-to-stern overhaul. The current management does not seem to be up to the task.

    MCD, the stock, could be very interesting if a credible activist sets his/her sights on it.

    An old idea that might be worth a look: REIT, anyone?
    Jan 25, 2015. 11:41 AM | Likes Like |Link to Comment
  • What U.S. Investors Can Expect From ECB QE [View article]
    Thank you for another perceptive, insightful article.

    My two cents:

    -- The ECB's QE program is currency manipulation on a massive scale. History shows that such programs don't work if the fundamentals aren't already moving in the direction that the manipulating authority desires. The program probably will prove to be an enormous waste of money and a tinderbox for the fires of future problems without massive structural reform in Europe. And that, as we know, is highly unlikely to occur. Bottom line: long US$.

    -- Away from Europe, a look at the geopolitical map shows that risks are rising by the week. The latest examples: Saudi Arabia is now led by a king said to have dementia, and Yemen has officially entered the list of failed states, making it even easier for Iran to do whatever it wants in the region. A look at the map shows why everyone should be concerned: with the addition of Yemen, Iran now controls all of the chokepoints on the shipping lanes of the Mideast, including the southern approach to the Suez Canal. Yes, the US Navy and the Royal Navy could dislodge Iran in a conventional fight, but -- as we know -- disruption happens at the margin, and quickly. Bottom line: long US$. And, perhaps, it may be time to nibble at stocks in the oil sector.

    Capt. Spaulding
    Jan 25, 2015. 11:13 AM | 2 Likes Like |Link to Comment
  • Rethinking KKR & Co. - Exposure To The Oil Patch Lowers Short-Term Profits [View article]
    Thank you for providing a succinct description of KKR's o&g properties. Much appreciated.

    Your perspective on the stock is skewed a little too much to the risks, in my view, and to give enough weight to the opportunities (which you acknowledge). As I see it, any shorter-term hits that KKR takes could provide long-term investors with attractive entry points.

    Just a difference of emphasis, I guess. That's what makes a market!.

    Capt. Spaulding
    disclosure: long KKR
    Jan 24, 2015. 10:34 AM | 1 Like Like |Link to Comment
  • Occidental Petroleum In 2015 - A Year Of Possible Shareholder Value Enhancement [View article]

    A clarification: my intention was not to oversimplify. I specified some broad criteria for stock selection in the final sentence of my post. After that, identifying the individual stocks or ETFs is up to the investor, as always.

    Capt. Spaulding
    Jan 16, 2015. 04:05 PM | 1 Like Like |Link to Comment
  • Occidental Petroleum In 2015 - A Year Of Possible Shareholder Value Enhancement [View article]
    Just a general note: the history of the oil market from its inception in the md-19th century shows that it is marked by booms and busts, and that it always recovers from political, economic, and technological disruptions. This cycle will be no different. Patient investors will be well rewarded by buying shares of top-quality companies and "speculative survivors" that have the financial strength to ride out the current storm.

    disclosure: long XOM, OXY, others

    Jan 16, 2015. 11:26 AM | 3 Likes Like |Link to Comment
  • Starwood Property Trust: The New Treasury Bond Of The 21st Century [View article]
    For what it may be worth, STWD has had a correlation of roughly zero with TLT and 0.35 with SPY over the past three years. We'll see what happens when interest rates finally start to rise.

    disclosure: long STWD
    Jan 9, 2015. 09:39 AM | Likes Like |Link to Comment
  • A Diversified, High-Income, Lower-Risk CEF Portfolio For 2015 [View article]
    Thank you for the informative, clearly written article.

    This question from someone who is very unfamiliar with CEFs: are they appropriate for tax-advantaged accounts?

    Have a happy and prosperous New Year.
    Jan 2, 2015. 12:07 PM | 1 Like Like |Link to Comment
  • 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