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Larry Smith  

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  • 5 Reasons Why Buffett Threw In The Towel On Exxon Mobil [View article]
    So much in this article I think is wrong, i don't no where to start. So let me just mention a few things. The average new car stays on the road for over 10-years. Electric vehicles currently make up less than 1% of total car sales. Approximately 99% percent of vehicles sold in the U.S. in 2015 and 2016 will be powered by gasoline or diesel. It will be decades before alternative vehicles replace gas and diesel powered vehicles.

    There are many, many countries around the world that lack reliable electric service, but have access to gasoline. I don't see the residents of those countries standing in-line for a Tesla or whatever Apple dreams up years from now.

    Just because someone is a relative of John D. Rockefeller, it doesn't mean they know what they are talking about. The family has for years been petitioning XOM to reject fossil fuels and move to renewables. Yet, XOM had more profits in a relatively slow 4th quarter than all the solar companies had put together. The Rockefellers are just East Coast elitist trying to keep their green credentials in good standing.

    Buffett bought XOM after the BP incident in the Gulf, why would that suddenly have any influence on him.

    No matter what future projection you look at, oil and natural gas remain major parts of the world's energy for decades. Oil and natural gas are going to be with us for a very long time and XOM will be the leading oil and natural gas company for a very long time.
    Feb 23, 2015. 09:10 AM | 26 Likes Like |Link to Comment
  • A No-Brainer Dividend Growth Investment [View article]
    Thanks for the comment cross, i would disagree on food quality. First it is "fast food", people want a sandwich and they want it out the drive through window in 30 seconds, so some balance between quality and fast has to be reached. The MCD breakfast sandwich's are great, I love the McMuffin. They also have healthier food that no one gives them credit for and for whatever reason, never seems to sell. They have oatmeal and an egg white McMuffin which is around 300 calories. They have grilled chicken sandwiches and salads. They have also added wraps, which have some different ingredients from what you usually find at a burger chain. Even the kids meals come with apple slices if you want. So it may not be fine dining, but it isn't really bad.
    Jan 21, 2014. 07:46 AM | 21 Likes Like |Link to Comment
  • McDonald's Has A Cultural Clash And May Soon Get Help In Solving It [View article]
    I disagree on almost every point you made.

    First, MCD has a staff for drive-through and a staff for in-store, they do not focus on one and ignore the other.

    Two - the lines around the store, which I still see, is because MCD was the most popular destination, people trust MCD and enjoy the good price points. The line around the store wasn't caused by people getting a coffee, it was caused by popularity.

    Three - setting up a separate stand-alone McCafe is a dumb idea, it raises your cost, more staff, more real estate, more equipment and it prevents customers from adding an item to their order. Someone orders a coffee maybe they add a breakfast sandwich, or a parfait. That would not happen if you a stand-alone beverage business.

    Fourth - The idea that someone ordering coffee is slowing down a line is silly, a coffee order is very quick.

    Take a general look at the restaurant business, majority of restaurants are reporting lack luster sales. Yes I know BK has improved, but they had no where to go but up and their sales are still no where near MCD's.

    A year ago MCD was the darling of everyone, double digit same store sale increases every month, stock rocketing higher, well that doesn't continue forever. Same store sales have slowed and the stock has pulled back some, nothing unusual about that.

    MCD will be fine, I expect some menu's enhancements this year and improved sales while continuing to build new stores in emerging markets.

    Long MCD
    Jan 10, 2013. 08:42 AM | 21 Likes Like |Link to Comment
  • Exxon: Please Lord, Don't Buy BP [View article]
    Kind of a re-hash of your previous articles complaining about XOM. Although I agree XOM should not buy BP, I completely disagree on spinning off assets. As a long term shareholder, I prefer XOM remain the integrated company it is, as I believe it affords them the opportunity to maximize gains in their refining and chemical business.

    BTW - I think Dale's comment that these are trying times for the majors is way overblown, XOM made $6.6 billion in the 4th quarter, Chevron made $3.5 billion. Their dividend payouts are less than 40% of earnings, so there is simply no chance they will cut their dividend.

    One last point, XOM had free cash flow of $18 billion last year, up $7.3 billion from the previous year, That free cash flow can easily service any debt they have.
    Feb 17, 2015. 08:11 AM | 20 Likes Like |Link to Comment
  • Exxon Mobil: Slow But Steady, Value Erosion Is Underway [View article]
    Mike, XOM has returned more money through share buybacks and dividends over the last 5 to 10 years than any other integrated oil company. Despite what you think, share buybacks are beneficial to shareholders. Since the XTO purchase, XOM has reduced their share count by about 25%. Thus, every shareholder has a bigger share of XOM's production than they did five years ago. If you think I am off on that thinking, read Warren Buffett's 2012 shareholder letter, where he talks about share buybacks.

    As the company has stated, the last few years has been a period of heavy investment in long-lived production sources. The investment period is hard, you are spending a lot of money and not seeing any return. Beginning in 2015 and continuing, the production will be seen. Kearl is an example of the heavy expense, it took several years to build the oil-sands production unit, but the production is expected to last 30 to 40 years. That is far different than a shale producer drilling a shale well that has rapid depletion.
    Jan 21, 2015. 09:11 AM | 20 Likes Like |Link to Comment
  • These Dividend-Paying, 'Recession-Proof,' 'Bond Substitute' Stocks Are Underperforming [View article]
    My first comment is that looking at market performance over a five week period and drawing any conclusion is not a worthwhile practice. Over short periods stocks/markets move for various reasons, to really judge performance of various market sectors a long period of time is needed.

    My second comment is that at the end of 2011 many dividend paying stocks that had enjoyed a nice year had a run up in price as fund managers probably engaged in window dressing. I know several stocks I own had a nice bounce the last two weeks of the year only to come back down a little when the calender turned to 2012. Therefore, it would make sense that stocks that had a nice bounce at the end of the year would give a little back at the start of the new year.

    Lastly, despite my comments above, the article was a fair and balanced with an interesting thesis on future market performance.
    Feb 9, 2012. 08:14 AM | 20 Likes Like |Link to Comment
  • Column: Jeff Immelt is the American Canada needs to lead oil sands clean-up [View news story]
    Annoys me to no end that people comment on oil sands with no real knowledge of the operations and the extent to which some companies, like Exxon, go to limit environmental damage. Below are two videos that give you some idea the work they are doing to limit environmental damage.

    http://bit.ly/1oQSKTk

    http://bit.ly/1oQSL9A

    Jul 12, 2014. 10:34 AM | 18 Likes Like |Link to Comment
  • Environmentalists' deep pockets dwarf campaign for Keystone [View news story]
    The environmentalist are naive, the oil is already coming by rail, truck and pipeline, and it will continue to come. We should build Keystone because it will continue to build our energy security, but whether we build it or not, the oil sands will be developed and will be shipped.
    Oct 19, 2013. 09:00 AM | 17 Likes Like |Link to Comment
  • WSJ highlights U.S. companies investing heavily to move oil and natural gas to market from newer shale-rock finds, reversing existing pipelines and beefing up rail and barge. As much as $45B may be spent in 2013 on new or expanded transportation infrastructure, including pipelines, rail cars, rail terminals and other projects. [View news story]
    Interesting article, let me sum it up, fracking and horizontal drilling are creating 10's of thousand of jobs in oil fields, for pipeline companies, for railroads, barge traffic and in manufacturing plants. Many companies are profiting from this drilling technique, thus they pay more taxes. So we have jobs, oil and gas from right here in the U.S. that helps balance of payments and tax income for local, state and federal governments.

    Of course the environmentalist want to stop all of it.
    Dec 27, 2012. 07:01 PM | 17 Likes Like |Link to Comment
  • AIG's (AIG) advertising tagline at the moment may be "Thank you America," but it's board will today consider joining a $25B lawsuit that's being led by former CEO and major investor Maurice Greenberg against the government. The suit argues that the heavy demands of AIG's rescue, such as the government taking a 92% stake and the high interest rate rates levied, deprived shareholders of tens of billions of dollars and violated the Fifth Amendment. [View news story]
    Sorry Tom, but without the Government, AIG was going to zero. Shareholders should be thanking the Government, that they came away with something. I have no sympathy.
    Jan 8, 2013. 07:58 AM | 15 Likes Like |Link to Comment
  • Why $100 Brent Will Not Last Through 2013 [View article]
    Johnh11 - Regulators previously approved the leg of the Keystone Pipeline that runs from Cushing to the Gulf refineries, it is already being built and should be in production this year. Because the pipeline does not run across any international border State Department approval was not needed. The first leg of the TransCanada Keystone Pipeline that runs across the Canadian US border is still waiting for approval.
    Dec 31, 2012. 07:56 AM | 15 Likes Like |Link to Comment
  • The Price Of Gas Is Outrageous, And It Is Going To Go Even Higher [View article]
    An interesting article, that I must disagree with. I do not think the price of gasoline is outrageous, in fact I think it is a deal.

    To get the gallon of gasoline to you, oil companies must travel to far off, in some cases desolate, areas to find oil. They may have to drill in the deeps of the ocean, or in cold desolate places. If they are fortunate to drill and hit oil they then have to transport that oil by pipeline, truck, train and or tanker ship to a refinery. Once at the refinery they turn the crude in to various products including gasoline and then blend in ethanol and other additives. It is then transported to terminals where various companies come and pick up the gasoline for delivery to their stations. All of this happens for about $3.00 a gallon (tax on gas averages about $0.50).

    For about the same cost of a gallon of gasoline, you can get a gallon of milk, a large latte at Starbucks, two sodas or bottles of water out of a machine, maybe a gallon of apple juice, but not a 6-pack of beer. So if you think about the “value’ of that gallon of gasoline, $3.50 a gallon is a deal. The trouble is, Americans just want to drive anywhere anytime and not pay any cost for it. Slowly, people’s behavior has been changing and it will continue to change as people learn the days $1.50 a gallon for gas are over.
    Feb 21, 2012. 08:28 AM | 15 Likes Like |Link to Comment
  • Is McDonald's Dividend At Risk? [View article]
    Is McDonald's dividend at risk?

    No.
    Mar 3, 2015. 10:39 AM | 13 Likes Like |Link to Comment
  • Accumulate AT&T Shares While No One Is Paying Attention [View article]
    Shhh, I have been accumulating and I want to keep accumulating before others see what I think I see. Now there you go telling everyone. ;-)

    Nice article Ray.
    Feb 25, 2015. 09:07 AM | 13 Likes Like |Link to Comment
  • The underlying message of the Wall Street protests is something the big banks and corporate America may finally have to grapple with before it becomes dangerous: accountability for unchecked power and greed. They're the "Tea Party with brains" - but what do they want in capitalism's place?  [View news story]
    What a weak article, Tea Party with brains, what a laugh. The majority (not all) of the protesters are unemployed malcontents. They want bankers in jail, ask them what the bankers should be charged with, I bet they have no idea.

    If you're in the Tea Party and you think the government spends too much, you are an idiot, if you are unemployed and sitting on a curb on Wall Street decrying that you have nothing, you are intelligent. Laughable.

    By the way, the protest that has spread to Chicago is about 40 people. I know because I walk by them on my way to work.
    Oct 4, 2011. 06:44 PM | 13 Likes Like |Link to Comment
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