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Active investor for 40 years, now retired. Graduate degree in law (Juris Doctor with Honors); undergraduate degree in business (B.S. in Business Administration)
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  • DUK Tagged With $1 Million Fine

    Duke Energy will pay $1 Million in fines for killing protected birds with its "wind farm" equipment in Wyoming. 14 eagles and other birds were reportedly killed. The Dept. of Justice brought a criminal case against a Duke subsidiary, who entered a guilty plea to the charges. The news article is here

    The prevention of bird strikes seems like a well-nigh impossible task. Collecting fines seems like a bit much. This is especially true when one considers the number of birds killed by aircraft each year. In 2003, the U.S. Air Force reported 4300 bird strikes, and there were 5,900 bird strikes in the civil aviation sector. 80% of strikes go unreported. See

    Has the DOJ found a new source of revenue that has gone unnoticed for years? It seems that no good deed goes unpunished.

    Disclosure: I am long DUK.

    Tags: DUK, Green energy
    Dec 01 2:52 PM | Link | Comment!
  • Tobacco Companies Face Another Potential Blow
    The FDA's Tobacco Products Scientific Advisory Committee has been meeting this week with a focus on determining whether "dissolvable tobacco products" should be regulated or restricted by the FDA. Previous hearings conducted by this group have focused on whether tobacco products containing menthol should be banned or restricted.

    This article highlights the positions of the proponents and the tobacco companies concerning dissolvable products

    The take home message is that the "assault" continues, thus bringing into question tobacco's ability to deliver revenue, earnings, and dividend growth, and consequently keeping pressure on stock prices. Negative action by the FDA will undoubtedly affect stock prices, and as with past negative developments in the tobacco industry, this may well present investors with a "buying opportunity."

    The number of smokers is declining, thus it is only natural that tobacco companies would look to develop alternative "delivery devices." In addition, tobacco has become a "cash cow" for governmental taxing entities. Thus, an outright ban of tobacco products seems unlikely. But the power to tax is the power to destroy, and the power to regulate can also turn a profitable industry into a pile of ashes.

    Will the FDA resist the temptation to saddle tobacco with harsh, destructive regulations? It is likely that there will be "some" regulation coming out of all of this. It is difficult to imagine in this era of government intrusion into all aspects of our lives that the FDA will follow the sage advice to "Don't just do something... stand there!" The issue thus becomes whether the impact of their action will make investments in tobacco companies unattractive.

    Stay tuned for developments, as they will surely follow as night the day.

    Jan 20 10:57 AM | Link | Comment!
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