Seeking Alpha

Philip Mause

 
View as an RSS Feed
View Philip Mause's Comments BY TICKER:
Latest  |  Highest rated
  • What Happened To 'Peak Oil'? [View article]
    Imagine what the economics look like in Hawaii where the local utility charges 42 cents a kwh or Puerto Rico with over 30 cents a kwh. In many parts of California the retail rate is over 20 cents a kwh. It is interesting that some of the places where solar is most attractive (Hawaii and Puerto Rico) are the places where oil is still the dominant fuel used to generate electricity. In Maryland the displacement of oil by solar will be more indirect. Solar will displace natural gas which in turn will displace oil.
    Aug 2 02:54 PM | Likes Like |Link to Comment
  • What Happened To 'Peak Oil'? [View article]
    Free markets clear so that it is not likely that "the price will just get so high we won't be able to use the limited amounts available" because if we can't use them at that price, the producers will be stuck with them and will lower thee price. It is possible that at some point the extraction cost will get so high (as easy to extract deposits are exhausted) that extraction will cease due to the availability of cheaper alternatives. This is a very very long way off if possible at all. The situation we face is that there will be a tug of war between the depletion of existing and less expensive reserves and the development of new technology for extraction and that, over time, it is likely that marginal extraction costs will increase. This will increase prices and create powerful incentives for alternatives and more efficient end use. It is impossible to predict exactly where the price and quantity will go over time because major technological breakthroughs in extraction and/or alternatives can have a huge impact and make predictions obsolete very quickly.
    Aug 1 02:06 PM | Likes Like |Link to Comment
  • The Market Is Overpriced But The Correction Will Likely Be Shallow [View article]
    I guess what my methodology tends to show is that valuations have not gotten stretched at least on a dividend yield basis but have stayed remarkably stable and what has increased has been dividends, not the price dividend ratio. I acknowledge that with a dividend yield below 2% we are due for a correction but as the yield moves over 2% there will be resistance to further declines as the yield approached 2.2%.
    Jul 31 06:29 PM | 1 Like Like |Link to Comment
  • The Market Is Overpriced But The Correction Will Likely Be Shallow [View article]
    The tug of war between fear and margin calls versus hunger for yield will be resolved at a dividend yield of roughly 2.2%.
    Jul 31 09:57 AM | 1 Like Like |Link to Comment
  • Yum Brands Will Go Higher [View article]
    When we were in China we were asked to guess who the most famous American military leader was among the Chinese. We guessed, "Douglas MacArthur" and our hosts said - "Wrong - it's Colonel Saunders!"
    Jul 30 05:16 PM | 2 Likes Like |Link to Comment
  • The Market Is Overpriced But The Correction Will Likely Be Shallow [View article]
    The problem is that a 20%+ correction would produce very high dividend yields and investors will jump in for the yield. In 2007 we had higher interest rates and the crash was accompanied by lots of dividend cuts. Unless you see dividend cuts coming, a 20%+ pull back is unlikely.
    Jul 30 11:09 AM | 3 Likes Like |Link to Comment
  • The Market Is Overpriced But The Correction Will Likely Be Shallow [View article]
    I tend to agree that some kind of sell off may be approaching but I think that there will be a very strong resistance level at around 1700 (and a 2.2% dividend yield). It is unlikely that the sell off will go that far and it is extremely unlikely that the sell off will take us beyond that point.
    Jul 30 09:57 AM | 1 Like Like |Link to Comment
  • Why Draghi May Ruin Yellen's Plans [View article]
    This seems to be yet another reason why a US rate increase is a long ways off.
    Jul 30 12:33 AM | Likes Like |Link to Comment
  • Reflections On The Middle East [View instapost]
    Thank you. The Neocons were intelligent and had a coherent view of what they wanted to do and why. This gave them enormous power in what was essentially a vacuum. The United States does not have a "deep bench" in terms of expertise on the Middle East and experts tend to be pigeonholed as either "pro-Israeli" or "anti-Israeli" and marginalized. In addition, our policy of refusing to have relations with regimes we disapprove of (an absolutely idiotic policy) means we don't have an embassy in Iran and don't negotiate with Hamas - leading us to "fly blind" in many important respects. That said, it shouldn't have been that hard to see that removing Saddam Hussein in Iraq would have roughly the same effect as the end of Tito's leadership in Yugoslavia. The centrifugal forces overwhelmed the glue and the country is breaking apart. I had hoped that big oil would have more influence in the Bush administration but the Neocons stepped up and took charge. And then we had the "Arab Spring" which has fizzled into a deepening abyss in Libya and Syria. We have to be much more realistic and modest in our objectives - security, peace, gradual economic reform, and a very gradual move toward representative government. In that order!
    Jul 29 05:29 PM | Likes Like |Link to Comment
  • Can We Ever Really Retire? Why Americans Stink At Math [View article]
    Great article! I remember a story from the 20's involving (I think) Dizzy Dean who was told his salary was going to be 6 thousand dollars and exploded in rage saying "I won't take a cent less than the fifty five hundred I was promised!!"
    Another sector to consider in a dividend oriented portfolio is private equity managers like KKR and Blackstone.
    Jul 28 11:50 PM | 15 Likes Like |Link to Comment
  • Reflections On The Middle East [View instapost]
    I don't think so. I was referring to the borders of Syria and Iraq and possibly Lebanon. I think that most of the problems in the Middle East have little or no connection to Israel and would have emerged even if Israel had never come into existence. In fact, for a period of time some leaders were able to use opposition to Israel to foster a sense of national unity and forestall the fractious disputes which have now arisen. The border problems of Syria and Iraq date back to the end of WWI - long before Israel emerged.
    Jul 28 11:38 PM | 1 Like Like |Link to Comment
  • Puerto Rico's Economy Is Gasping For Air [View article]
    Do you have any opinion on how the legal issue is likely to be resolved? Some of these bonds are trading in the 40's and high 30's so that a big default risk is already priced in.
    Jul 28 01:58 PM | Likes Like |Link to Comment
  • Consumers Are Failing The Economy [View article]
    I think that the income distribution is a significant problem. On every turn of the economy, a large number of dollars wind up in the hands of a very small number of super rich households and these households have the discretion to spend only a small portion of their income. Thus, continuation of consumption depends upon borrowing to supplement income. Up to 2008, the borrowing was done by households. Since then, it has been done by the Federal government.
    Jul 26 08:52 PM | 7 Likes Like |Link to Comment
  • The Time Is Near: How Will The Federal Reserve Raise Interest Rates? [View article]
    Another issue is the exchange rate problem. If the Fed raises rates significantly while other CBs are still following expansive policies, the dollar will skyrocket against other currencies which will reduce exports, increase imports, lead tourists to shun the USA, and reduce the dollar denominated earnings of US companies. The net effect will be reduced employment and deflationary pressure.
    Jul 26 08:48 PM | Likes Like |Link to Comment
  • How Has Herbalife Kept The Game Going For So Long? [View article]
    The biggest long term threat to Herbalife would be a widespread improvement in primary school math education. If we got to the point where a high proportion of the population mastered 5th grade arithmetic, Herbalife would crater. I don't think that this is a serious threat in the near term.
    Jul 26 01:11 PM | 5 Likes Like |Link to Comment
COMMENTS STATS
3,471 Comments
4,393 Likes