Rohan C. Pease

Growth, momentum, contrarian, event-driven
Rohan C. Pease
Growth, momentum, contrarian, event-driven
Contributor since: 2009
Company: Arizona Electric Power Cooperative
Thanks Tdot,
You bring up a valid point for readers. However in my analysis I'm concerned with the effect an Investment Grade rating would have on Ford's capital structure, and the PV of savings to the shareholder thru reduced interest expense. The assumptions I used (100 bps interest reduction across entire capital structure) may vary among business segments and is up for debate, however the overall savings will be significant. It will be up to the investor to determine if the assumptions need to be altered and to what magnitude.
Great question Spawn, Looking at Ford's balance sheet as of December 31, 2011, Ford reports their Secured Revolving loans under their automotive sector debt as debt payable within one year and is excluded from my LT debt calculations. To clarify the $130 Million drawn is used for letters of credit, and as of the December 31, 2011 annual report this line item shows a zero balance. The $130 million figure was taken from a press release.
*Correction* - 5-year CDS trade at 113bps for bonds rated (Ba1/BB+) instead of Ba1/BBB+
N.H. - thanks for the good question. Simply their joint venture diamond fund is used to purchase actual polished diamonds and not actual hard assets like the Ekati mine. The fund is an extension of HWD's retail operations. HWD historically sells most of their rough diamonds into the open market, then buys only the best quality polished diamonds for their jewelry. HWD will provide the fund with pricing info.
HWD operates both retail and mining divisions individually while using data between the divisions to gauge pricing trends.
THe Ekati mine has a projected valuation of $500MM - $750MM; the limit of their diamond fund is capped at $250MM.
Love the chart, I'm a visual person and its a good graphic with many key metrics including currencies.
How is it possible to have a positive return and end with less principal then when you started. $7,863< $10,000
Typo - In the Quantas blog I believe that the USD amount should read $64.4M instead of $24.8M; the inverse is currently displayed. GBP = 1.61USD instead of USD = 1.61 GBP. Thanks.
Great article, I agree with your insights on the commodity space heating up and how that bodes well for the overall market. China is certainly in the drivers seat on this one, and bonds are becoming quite frothy at these levels. Continued easing from the FED may indeed throw some gasoline on the fire and "commodities" will rejoice because of it.
In regards to Insider Ownership I agree with Positive thoughts, the windfall would be very attractive. Further, if management in the target company is to lose their jobs, you assume that they will lose their job whether they have a large ownership stake or not, I don't see how this can be used as a qualifying criteria for screening for an acquisition target. The other metrics do make a lot of common sense although EPS growth of 5% can hardly be classified as "large profits".
First, I want to agree with you I do believe China is adding to their gold positions and ofcorse they won't admit it now. However I just want to throw out there that China has an ample domestic supply of gold mines and is a major supplier of Gold to the golbal market, so they may have some patience on their side. Just something to keep in mind. I however have a quarter of my portfolio in gold and I don't intend to sell anytime soon.
I love it!!! First, I would like to say that I am a proud Berkshire shareholder. Secondly, when I first heard of Carrefour offering to refund the cost of a flat screen to customers who bought ahead of the World Cup if Fance won I wonderd how they were going to hedge this exposure. I figured they had to, such a liability if they didn't, so it's really neat to find out who the counterparty was, not to mention BRK shareholders benefited. News like this I have grown accustomed to and it's why I am a shareholder in Berkshire. Thanks for the great article,
Fortescue (Aussie TIcker FMG) trades on the pink sheets as FSUMF here in the states. It's a bit of a thinly traded stock with an average of 100K shares changing hands each day. Point being is that it is a main producer of iron ore in the Palibra region and I was supriesed to hear talk of Aussie miners and this not be mentioned. It has a high beta towards the Chinese market and may have been one of the hardest hit due to the recent tax proposal since alot of its expansion is funded thru internal cash flows.
Also Fortescue held is gains and was up fractionally on the day, moving against the miners you mention.
Aussie miners, you left out FMG!!!
(PZE) Petrobras Energia SA is an Argentina-based integrated company
(PBR) Petroleo Brasileiro SA-Petrobras is an integrated oil and gas company.
I am recommending Brazilian State Owned Petrobras [ADRTicker "PBR"]
I agree, Statoil is an interestig pick here; the dividend from a spin off would just be icing on the cake too.
Thanks for the insightful comments and criticisms.
I agree, however I believe if we see 430K in the next couple of weeks that may indicate that the trend will be to 350K. We need to remember that it won't happen overnight, as they say "the trend is your friend"
What nonsense, AAPL has much growth left!!! Conversely MSFT's projected growth is flatline at best.
I'm sorry but there is a reason the currency is out of control, the EU itself is out of control. $1T dollars, and it proped up the currency for only 1 day, umm not a good sign at all.
Thanks for the comments, very good point on the sugar futures correlation.
Kudos on your investment in Bunge, I am a shareholder of VALE and I was egar to hear that they acquired Bunge's assets. Securities tied to Brazil's domestic economy will do very well in the future, good step by VALE to diversify some of their revenue streams.
Thanks for the comment, I see Brazil's ethanol industry expanding much differently than the U.S. for a number reasons but primarily due to infrastructure of pumps and the fact that 90% of cars in Brazil run on ethanol, can't say the same for our Nation.
Laughing, good qustion. Yes its dilutive, mining companies tend to use long term loans in place of diluting their shareholders. Although the growth prospects here may justify a secondary if banks don't pony up the dough.
Great question jpayotte, I have wondered the same myself (list on the NYSE), I do believe that Australia does get penalized in terms of capital because of their distance and logistics. I read an interesting article of a lot of Aussie Hedge funds moving to London to attract capital, a lil different since FMG is a large company. I haven't heard of any plans to list elsewhere, however since Iron ore is one of Australia's main exports, and their close proximity to China, this industry is thriving and I don't see liquidity / capital raising shortfalls to be much of an issue.
I assume this because they must fund expansion thru internal cash flows, and this will put a strain on earnings. Mining is very capital intensive, and therefore it will take a lot of cash to build their infrastructure if they plan on mining millions of additional ore in the future.
Rumos this morning swirled that JFE has received and accepted a VALE offer for a 90% increase in benchmark prices for Iron ore. JFE has denied the reports coming from a local Brazilian newspaper. It's a lot of heated discussion which could be a preemptive strike to force China's wrist by getting such a large number out in the news. All this the coverage is playing to the miners advantage, and I see them capitalizing on that leverage, weather is 60%, 70%, 80 or 90, its a lot more that they got last year bottom line!
My sentiments exactly.
Mainly I use Bloomberg and Reuters for my news. Other sources I find helpful are agMetalMiner.com and theaustralian.com (WSJ version for Australia.) Also it helps is you have a couple of Brazilian friends to discuss the economy and politics with.
This report came out a few weeks ago from Goldman, Market folly was the first to break the news on SA.
10,000 bp rate increase huh?
Last time I checked the American economy as deteriorated as it is, is not a Venezuela or Zimb. regime. Our dollar can still buy a loaf of bread, and will in the future.
I agree completely with Visa, its been my top holding for well over a year now. VISA & Berkshire make up 38% of my overall portfolio, and thus I haven't experienced nowhere near the volatility currently in the market.