Michael Fitzsimmons

Bright Future for Petrobras and Brazil

AlanVon: a speculative sell while the stock has gone from $15 to $50? seems like there are a large group of investors out there that not only disagree with you, but have profited handsomely from doing so.

Bright Future for Petrobras and Brazil

thanks for all the comments. my turn to jump in.

longoil: i think 14 years will turn out to be on the low end. was this the company estimate? i am going to look into that one when i have more time and get back to you.

prariedog555: have you ever heard of the internet and google? you should try it sometime, then you would find the petrobras website and all the information you desire is there. petrobras is one of the more open oil companies when it comes to disclosures. with all due respect, i find your post totally without merit. yahoo is not the sum total of financial information on the internet, especially when dealing with foreign firms. try broadening your horizon. the link to the latest conference call is in the article. did you give it a listen? here is the investor relations website:
www2.petrobras.com.br/...
that should get you started.

alanVon: yes, i have read about the dilution and the political risks. that said, petrobras needs investors to fund and implement their drilling strategy and leverage the assets of their elephant fields. as i said before, there is risk everywhere. i am not convinced the risks posed by owning petrobras outweigh the tremendous assets and increased production this company will leverage going forward. and yeah, i still think they have cool accents - especially when they are talking about oil fields having multi-billions of barrels of light-sweet crude!!

soldama: i am just now reading the petrobras news flyer #31. it would seem despite your concerns that petrobras had the expertise to increase brazilian production 9.5% in march (year over year) and 3% increase month-over-month. show me another big oil company with that kind of production growth (consistently). sure there's political risk, but look at the US!? i'll stack lula up against bush or obama any day. brazil simply doesn't have the ingrained fraud that the US financial and equity markets have. the US is funnelling all the countries wealth up to a select few in business and government. it's unsustainable. no country can prosper without a strong middle class. bush declared war on the middle class, and as a result the country is in shambles. PBR is not going up because of "hype" - it's going up because of huge production increases and elephant fields which guarantee these production increased for years and years to come. throwing MIT at me doesn't impress me when you over look such basic fundamentals as these. perhaps you should try georgia tech. they teach pragmatism and real world analysis. petrobras' production data speaks for itself.

steven ward: i think people are so positive on petrobras because it keeps delivering. production is up. discoveries are up. so is the stock price. there are many critics are out there and it is easy to use google and find many articles about the political risks of investing in petrobras.

naidle: yes, i agree with you. americans (and i AM a patriotic american) tend to have blinders on about what is really happening in america. they are too quick, for instance, to diss the french health care system, yet the folks in france love it and it is much less expensive than what americans spend on. this is true about many things - not the least of which is that america, especially under bush, and continuing under obama, has turned to a fascist government. that is what you call taxing middle class americans and giving it to the wealthiest industrialists. and that is what is happening. combine that with its dangerous reliance on foreign oil imports, and you have an economic system that is simply not sustainable. as a result, you see gold at $1140/oz. it is a warning call to the future. meanwhile, the key to solving america's economic woes (its abundant, clean, and cheap natural gas reserves) sits right under their noses but yet congress refuses to act on natural gas transportation as a solution? why? because the fascist government is owned by the oil and coal interests and they are more interested in maximizing their profits now than in the future of their own country! now, THAT is polticial risk!

It's Going to Get Ugly

longoil: if we can figure out how to split an atom, surely we can figure out how to install natural gas meters (which can be read remotely). you're correct to point out the gov will want to tax natural gas, but you're incorrect to think this is some kind of technical hurdle which cannot be overcome.

blu: if you mean less appealing because it paints a dire picture of the future of the US, i agree. if you mean less appealing because my thought are wrong, please be more specific and debate me on exactly what was written, what you disagree with, and what your alternative thoughts are. othewise, you simply aren't making a good case for exactly why this post was "less appealing".

ConocoPhillips: Updated Q3 Financial Gauge Analysis

your scoresheet tracks standard financial metrics. however, as we saw during 2007/2008, geopolitical risks and the inconvenient truth that worldwide oil supply won't keep up with worldwide oil demand over the coming years propelled oil stocks like COP much higher than standard metrics predicted. these two issues (geopolitical risk, and worldwide oil supply/demand) are still very much in play today (as evidence - just look at $70-$80/barrel oil prices in the midst of the greatest economic contraction since the great depression). add to these issues the bearish US dollar scenario, and my gut tells me that standard financial metrics, though important, don't tell the whole story. oil stocks like BP, COP, XOM, and STO are very attractive at today's prices. not only do they pay out nice dividends (although XOM's is very skimpy), but despite all the "oil company earnings are down" articles in the media, well, sure, their earnings are down, but they are still making very nice profits. hell, it was only 4 or 5 years ago that current oil prices would have been viewed as profit gushers for oil companies. and you know what? they are...

Don't Believe Long-Term Oil Forecasts

oops, i forgot to add the biggest reason why i would agree with you, and why many others must agree with you: a $77/barrel oil price today even as:

1) demand in the US has fallen 6-7%
2) brimming worldwide oil supplies
3) the worst economic contraction since the great depression

so, if prices are $77/barrel now, where are they going if the worldwide economy picks up over the next year? where will the go if the US dollar continues downward? and lastly, where will they go if the US decides to start the 3rd war in the middle east (iran)? the outlook for oil has never been more bullish than it is today.

Recycling U.S. Coins into Silver

Mmarkk: i am not at all concerned about the low price of LNG because it simply reinforces what i have been saying for years: the world is awash in natural gas and we should be using it, not oil, to power transportation. wrt shipping LNG to the U.S., it's not happening. the shale discoveries and bumper storage supplies are sending LNG shipments from the middle east to europe instead. US shale discoveries are such a huge game changer it has affect nat gas prices worldwide. in fact, the "take or pay" contracts signed by european agents for russian nat gas are now a huge problem for them as these contract were linked to the price of oil (how stupid!) and they want to get them renegotiated. so, i'm not "concerned" about these things at all. the world is moving toward sustained lower natural gas prices while oil continues to go higher and higher. the question is this: will the US establish policies to take advantage of this, or, will it keep it's economy linked to oil and go down the tubes. THAT is what i am really concerned about (and was concerned about years before oil went to $145/barrel...)

Hans: perhaps i misunderstood your post, but i think i have to disagree. i can sell a $1 american silver eagle right now for over $16....soooo, newly minted silver coins *can* be worth more than the "coin value" itself.

Don't Believe Long-Term Oil Forecasts

i tend to agree with you and site several reasons why:

1) even at oil prices of $145/barrel, production of the largest oil companies was down year-over-year

2) the US continues to spend huge sums of money to obtain oil: witness the war in iraq and afghanistan (which is not about the taliban, but about getting caspian sea energy treasures to market without going through russia or iran).

3) the chinese are now selling more cars (the vast majority of them gasoline powered) every month than america.

4) the U.S. has still not adopted a non-gasoline personal transportation solution (like natural gas vehicles) and therefore is still addicted to foreign oil despite all the rhetoric from the obama administration. it is clear obama and energy secretary chu are held firmly in the grasp of oil and coal power as they are "agnostic" about natural gas transportation even as supply has mushroomed and prices have dropped.

so, the U.S., and the world for that matter, continue on a collision course with the reality of worldwide oil supply/demand. if the economy does come back from the last prices spike (not a given), the current "glut" of oil supplies will be worked off in a matter of months and the next price spike will exceed the last one. the world is on an economic yo-yo driven by the new world reserve currency: oil. the U.S. is the biggest user by far (~25% of total), oil is priced in US dollars, but the U.S. is in deep debt and after 8 years of Bush China owns *alot* of it. so, you tell me, who is in the catbird seat going forward?

It's Going to Get Ugly

anarchist: i agree with you. note SA never publishes this type of article, and i have submitted several. the reason, of course, is that advertisers don't want to see this kind of talk (other than the precious metals dealers!). but yeah, the great majority of americans are completely ignorant of what is going on, but i suppose it's easier for them to be happy existing in life's day-to-day routines without worrying about such things...

doubleguns: yup, i came to the same conclusion - it will be up to the states to drive fixing the US government. if enough states go bankrupt to the point bond sales can't be floated, things will have to change. we're not too far from that point now. the next big oil spike will probably see that happen, and i certainly think that will be within 3 years. i mean, if oil is at $80 during the "great recession", what will it go to when the world economy starts growing again?

MarkBern: you ask a good question "how does it get started". well, you can of course ask your state's governors and congressional members, but don't expect them to support it because guess what? they are living high on the hog. i don't think it will happen until civil disobedience gets much greater than you see today. gasoline rationing and hunger and crime will most likely make it happen (unfortunately). btw, i had to laugh at the more strategic energy dept comment...that implies there is anything strategic about it currently (and there obviously isn't). energy secretary chu is exactly the WRONG guy at the WRONG time. to be "agnostic" about America's greatest domestic energy resource (natural gas) is, quite simply, criminal.

HTLove: and that is why the US gov doesn't support natural gas transportation - because they can't control it!! i mean once an american can refuel their vehicle in their garage off the natural gas feed, they lose all control over that person's ability to be mobile, and they WANT control of everyone's mobility. that is why i always say a Civic GX and a "Phill" in every garage is REAL freedom...certainly not the kind of "freedom" bush used to wax poetically about at every opportunity.

doubleguns: yup, keep the constitution and bill of rights. pretty much start over after that. outlaw lobbyists on the grounds of congress, term limits up front, balanced budget amendments, real money backed by gold and silver reserves, and campaign finance reforms. all good places to start.

Recycling U.S. Coins into Silver

rosco1776: i missed your post earlier. yes, the U.S. does import natural gas, but most of that is legacy canadian imports back when the U.S. though they were out of nat gas and canadian had very cheap and accessible supply. they shale plays have changed everything! even the LNG terminals are not receiving imports and the foreign supply that was supposed to come to the U.S. are now going to europe and asia. unfortunately, our policymakers don't understand the strategic importance of the new shale production and are simply not taking advantage of it. that's because the US government is run by lawyers. china's is run by engineers, and they would be all over that natural gas like bees to honey (especially if they had the 2.1 million mile natural gas pipeline distribution system we have in this country!).

Recycling U.S. Coins into Silver

blacksilver: the barter question you hit on was exactly the reason why i think investors should own both gold and silver. i think gold will probably be the best store of wealth, but like you said, when it comes to bartering, would you rather barter with a one ounce silver eagle or a one ounce gold eagle? so in the future the silver will be better for bartering, the gold as a mechanism to store wealth (and for bartering for big ticket items - like maybe a cow 100 (10?) gallons of gasoline ;)

babysdaddy: yeah, and another reason is seperating out the real silver - that's time and expense. who knows, in the future they might be a reason to just melt down a silver eagle for the actual silver. although this is against the law and i personally would never do such a thing.

joe silver: thanks for the info and i'll take your word that you know what you are talking about simply because you had better with a handle like "joe silver". that said, i'll stick with the .999 and .9999 pure silver eagles and maples (respectively).

dannyfurman: you bring up an interesting point...i guess it depends on how much you trust the seller and how good you are at spotting fakes. i have a hard time believing one of the bigger and more reputable dealers would trade silver eagles because one report of that would put them out of business. of course, it may have already happened and i just don't know about it. please let me know if you know of cases where that has happened and which dealer it was. thanks.

ConocoPhilips: Time to Embrace Natural Gas Transportation

long_on_oil: the negative EPS you site is due to a huge one time write down. i don't think this charge should be forecasted forward as an indication of the future. COP has generated large positive net income for years and years, and even after the blistering it has taken in the market during this crisis, a look at its 5 and 10 year performance is not bad at all. yes the debt is more than i'd like to see. that said, it isn't exhorbitant, and i think with oil prices where they are today ($70's!), and the divestitures the company is planning to take to pare down that debt, you may be underestimating COP's earnings going forward. the company has some mature low cost oil producing fields which are cash cows. not only that, it is clear that mulva wants to shine up his reputation before leaving...a reputation that certainly has taken a hit with the developments of the past year or two. he could salvage it easily by simply joining pickens, mcclendon, hefner, and others and push for U.S. policymakers to adopt natural gas transportation. increased demand will take the yo-yo out of natural gas prices, and then mulva's strategy of natural gas assets will enable both his reputation (and the stock price) to appreciate. unfortunately, mulva is silent on the issue....which i for one simply cannot understand.

longoil: well, to each his own. i certainly like XOM, BP, and CVX as well, and have suggested those companies many times in my articles. certainly BP and CVX had the best earnings this quarter, and BP has the best dividend of the lot. that said, from a stock appreciation perspective, at these levels, i am not so sure COP might not have the best potential gain over the next year or two. if they announce some asset sales at decent prices, and people see how the debt is indeed being reduced, and i have no doubt that will be the case, i think the leaner-meaner COP might be looked at in a much different light then today's.

doublebogey: well, that might be a birdie of an idea. the distributers get paid no matter what the price. you probably know alot more about them than i do, so i'll just say you certainly could be right.

ConocoPhilips: Time to Embrace Natural Gas Transportation

long_on_oil: hey, i love BP and STO. of all the earnings released, i think you'd have to say that BP and CVX had the best quarters.

Mmarrk: i have sent emails to Conoco's BOD. no reply, and obviously no success. in light of all their investments in natural gas plays, i just don't undertand COP management's aversion to natural gas transportation. what jim cramer tonite, he's in OK interviewing some natural gas heavyweights. i am sure they'll be talking about it. the U.S. will have to migrate to natural gas transportation at some point - we'll have no choice. the question is, will the government wait until there is rioting in the streets, or will we do it before a crisis. of course, i think last year's $145/barrel oil was a crisis...

auto44: if you are compariing to the US dollar, it's a good question, but a better question maybe this: china, india, brazil, france, and germany have all said they are in favor of a new world reserve currency not based on a single country. so, the real long-term question is this: what will the U.S. dollar be valued to wrt a new world reserve currency based on a basket of currencies, gold, and silver? the answer to this question, i believe, is: "less than it is valued today".

Recycling U.S. Coins into Silver

bug in SA...i'll post again (sigh...)

GoldBarron: thanks for the good info

Dopamine: thank you.

sdavid: well, if i am gonna invest in silver, the silver eagles are .999 pure silver, and silver rounds or bars are usually the same (or .9999). the premium isn't that much (imho) and i think these would be great bartering chips.

blacksilver: i guess my question is, why buy these low percentage silver coins at all? if you're going to invest in silver as a precious metal, why not just buy pure silver coins? you can barter with them, and as an investment, i would also think they'd be easier to sell. to each his/her own i suppose.

speedspirit: sorry, but i don't agree. depsite all the clamor about water table damage, the track record of natural gas drilling over the past 25 years or so is actually excellent considering the huge number of wells drilled and the very low rate of ecological or water table damage. compare that against coal, where there are many well documented serious problems, our rivers, lakes and streams are full of mercury, and the fish in these waters are chock full of all kind of toxic metals. like i tell people who want to argue this with me, go down to the tennessee river, catch some fish and eat them. that is, if you can find any still alive that have the strength to bite your hook!

doubleguns: awesome post!! good one man.

SSALarry: two things: first, you should have known what the energy production of those installations would be prior to installing them so there shouldn't have been a big surprise. secondly, your discussion is missing the bigger point: transportation. transportation accounts for 70% of U.S. oil consumption. the only way we can signficantly reduce our addiction to foreign oil is to adopt natural gas in the transportation sector. i'm all for wind and solar, but they generate electricity and where are the affordable electric cars? meantime, we're sitting on abundant, clean, and cheap natural gas reserves, doing nothing, and continuing to import foreign oil. seriously stupid policy. btw, watch jim cramer's mad money tonite, he went to OK and is talking to some natural gas heavy weights. i am sure this subject will be broached.

BoxedMerlot: you said: "And I still find it amusing to call the trading of goods and services with silver rounds “bartering”." can you explain why you find it amusing?

Recycling U.S. Coins into Silver

GoldBarron: thanks for the good info!

Dopamine: thank you.

sdavid: well, if i am gonna invest in silver, the silver eagles are .999 pure silver, and silver rounds or bars are usually the same (or .9999). the premium isn

Recycling U.S. Coins into Silver

brianr: actually, i bought some silver bars that were only $0.59 over spot, and the silver eagles were $1.79 over spot. i don't mind paying that premium for minted coins that are .999% pure silver. Additionally, if we do have a currency crisis and devolve into a barter system, what would you rather barter with - junk silver or a US mint silver dollar?

GoldBarron: yeah, but what percent silver and copper??

yellowhoard: well, hopefully you could securely hide both. i'd hate to place all my precious metals bets in either gold or silver, why not own some of both?

jimbo: yeah, same as the last administration. we've had two terrible presidents in a row just when we needed the best presidents. very sad, and makes one wonder just who is behind the curtain turning the knobs....

options: yeah, i just worry about bartering with palladium.

speedspirit: you overpaid bud.

anarchist: the american public are sheep. they don't get riled about stupid wars, $145/barrel oil, or fascists in control of the gov giving their tax money away to rich executives. americans are asleep at the switch, and we deserve the disfunctional government we had. i mean look, the american public gave bush a second term after witnessing his first term! i rest my case.

brianr: i just don't see the logic in junk silver when you can buy .999 (or canadian .9999) pure silver for a slight premium and have some quality silver. i dunno, am i missing something here?

taxpro: if you are referring to silver eagles, they are .999% silver. if you are talking about dimes, there is no way dimes are 90% silver. so, i'm not sure what coinage you are referring to...could you clarify?

bill: you can do much better than ebay, even kitco is better than ebay. greenspan supported the gold standard?? i don't think so...greenspan was the start of the big problem!! and bernanke is just another goon following in his sloppy footsteps. wrt to the minting values, you're correct, but i think the amount on the coins is irrelevant at this point. it's only ounces that matter.