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  • The Oil Price War Might Have A Surprising Loser [View article]
    The odds for the Saudi royal family are much higher than they are for us. If they prevail, we have some corporations go bankrupt, whereas if we prevail, they would have a revolution and they know it. SA will be seeking some kind of production quota arrangement before too much longer.
    Aug 6, 2015. 05:58 PM | 4 Likes Like |Link to Comment
  • Freeport-McMoRan: Buy The Dip To Profit From Copper [View article]
    Not for FCX. About 70% of its revenue is from copper.
    Aug 4, 2015. 06:32 AM | 5 Likes Like |Link to Comment
  • A Closer Look At Kinder Morgan's Distributable Cash Flow As Of 2Q 2015 [View article]
    Not so. Ron Hiram has been commenting on MLPs for several years on SA. He follows the data where it leads him, for good or bad. You may disagree with his take, but it is always honestly delivered.
    Aug 3, 2015. 09:06 PM | 30 Likes Like |Link to Comment
  • Kinder Morgan's Debt Level Should Scare You [View article]
    Richard Kinder is borrowing money to finance projects where the usage is already subscribed, rather than speculated. This makes the normal debt metrics too conservative. As long as the demand for natgas and crude continues to grow, KMI will be OK.
    Aug 3, 2015. 01:26 PM | 13 Likes Like |Link to Comment
  • How Much Kinder Morgan Is Too Much For A Dividend Growth Investor? [View article]
    Cordes, I know this is peripheral, but you've rattled my cage. Anyone who cares about long term total return, as I do, should not be a market timer. Successful total returners acquire the discipline to hold over very long periods, and eventually learn that companies like GIS, JNJ, WFC, CVX, etc. are the best long term bets to beat the market. The debate should be recast as investors, either DGI or TR, versus traders.
    Jul 28, 2015. 10:43 AM | 1 Like Like |Link to Comment
  • How Much Kinder Morgan Is Too Much For A Dividend Growth Investor? [View article]
    "The big lie, MLPs won't go down much when oil drops due to they transport it." Gotta agree with you. I too bought it hook, line, and sinker. But even after the market has spoken, I can't figure out why they went down so hard. I see this as another reason to sit on your hands and do nothing just now. Maybe the market needs a little more time to figure it out. :)
    Jul 28, 2015. 10:24 AM | 2 Likes Like |Link to Comment
  • How Much Kinder Morgan Is Too Much For A Dividend Growth Investor? [View article]
    The D/E ratio grabs the attention, and I am no expert, but here is what I keep coming back to: the D/E number does not show that KMI's borrowing finances projects that are already largely subscribed to. Comparing that kind of debt to debt taken on to finance speculative ventures is apples and oranges. I would loan a lot more to a homebuilder who builds only contracted custom homes than to one building on spec.

    Of course these subscribers could go bankrupt, voiding the deal, or may ask to renegotiate the deal downward in the face of low prices for the underlying commodity. But balance that against the fact that natgas is inceasingly the go-to fuel for electrical generation in this country, and it is hard to get too worried. Pipelines are the only way to transport all that gas, and Richard Kinder knows his way around them.
    Jul 28, 2015. 07:03 AM | 18 Likes Like |Link to Comment
  • Knowing What Type Of Owner You Are Is Key To Your Investing Strategy [View article]
    Of course he paid more in total $, but that misses the point. The relevant question is whether he paid a greater or lesser percentage of his SF salary than I paid of my Okla salary. I would bet that identical houses would require roughly the same percentage of one's salary, whatever the cost of living in a locale.
    Jul 27, 2015. 01:35 PM | Likes Like |Link to Comment
  • Freeport-McMoRan: A Lesson In Listening To The Model [View article]
    CWM, I feel your pain, but disagree with your explanation. It is not your model (or any other) that is to blame. FCX is hostage to commodity prices, and there are no models that are capable of anticipating their future moves.

    I took a very nice profit when I sold FCX at $53.13 in July, 2011. It was "underpriced" when I bought back in at $49.24 on 8/4/11, when I added at $43.17 on 8/18/11, and when I added still more at $38.79 on 3/16/12. It's been "underpriced" while I kept the DRIP on for the last four years. I was sorely tempted to add yet again when it showed signs of life by rising above $20 in mid April. Maybe I'm finally wising up, because a little voice said, "You dummy! You've played this game several times before."

    Copper and oil are not fads; some day they will be back, and FCX with them. I will hold on for that day, but am through listening to predictions about bottoms.
    Jul 27, 2015. 08:33 AM | 3 Likes Like |Link to Comment
  • Market Update: Current View Of The 'Secular Bull Market' Amidst The Backdrop Of Fear In The Markets, A View Of The Past, Present And Future [View article]
    The secular pattern in that 80+ year chart is lost on the standard linear or logarithmic views I have seen. Thank you for pointing it out because it is a real eye opener.
    Jul 25, 2015. 09:11 PM | 1 Like Like |Link to Comment
  • Knowing What Type Of Owner You Are Is Key To Your Investing Strategy [View article]
    "You had the opportunity to live in a comparable home for a fraction of the cost. If you were smart, the left over money could have been invested in two other homes (and still payed less) of a comparative value and lived off the rents. . ."

    GC, you assume I would have been making a San Francisco-level salary while at an Oklahoma job. That's not how things work! We bought all the house we could afford.
    Jul 24, 2015. 09:18 PM | 3 Likes Like |Link to Comment
  • Knowing What Type Of Owner You Are Is Key To Your Investing Strategy [View article]
    I'm one or the other kind of long term owner. After watching my energy heavy portfolio over the last year and reading this article, I should be happy as a pig in slop. So why am I not? Aren't paper losses only just "noise" until I sell, which as a long term owner I have no intention of doing?

    I think I am not happy because Eli is neglecting an important but hard to get at aspect of paper gains and losses. They are important shifts in one's potential, and potentials matter even if you have no foreseeable plans to use them. Maybe an analogy will convey this point.

    For many of us, our residence is our single largest asset. Due to the very low cost of living in my neck of the woods (Oklahoma), my 3 bedroom house is worth about $150k, while it would probably be worth over a million in San Francisco. Before I retired, this never bothered me. Since moving was not a realistic option, why should I care about the paper value that cost of living in my locale assigns to my house?

    But now that I am retired, I am curious about sampling some other parts of the nation on more than just a passing-through basis. However, I find that the low value of my house seriously restricts my potential to relocate. A retired homeowner in San Francisco with a house identical to mine could choose to live just about anywhere in the U. S. and I cannot.

    The same is true for paper gains and losses with stocks. They expand or contract our options, and that matters even if we never exercise them. Since we never know what the future holds, a person with more options is (other things being equal) better off than one with fewer.

    Or, put differently, both Warren Buffett and I are free to fly to Paris for supper, but only he has the realistic option of doing so. And objectively that matters, even if he perfectly happy to dine at the Omaha Sirloin Stockade.
    Jul 24, 2015. 05:32 PM | 12 Likes Like |Link to Comment
  • Come On, Let's Face It, Linn Energy Is A Steal At $9 [View article]
    It has been less than a year since FCX at below $30 was declared a steal, and we can see how that worked out. The market might undervalue a stock, but when someone tosses out the "s" word I lock up the silverware and grab ahold of my wallet.
    Jul 19, 2015. 08:55 PM | 1 Like Like |Link to Comment
  • Greece Holds Out, Wins Even Worse Deal [View article]
    Not yet, but Tsipras is working on it. (Just kidding)
    Jul 15, 2015. 05:34 AM | Likes Like |Link to Comment
  • Why Yield On Cost (YOC) Is An Important Metric [View article]
    To make Butterfly's point a bit differently, and I hope in a clearly reductio ad absurdum fashion. Having the misfortune to be well underwater on CVX just now, I find that my current YOC is 4.01% while its current yield is 4.48%. So should I sell my current holding and then immediately buy it back to lock in the higher yield? Apparently by your reasoning, I would be giving myself a pay raise.
    Jul 14, 2015. 09:32 PM | 11 Likes Like |Link to Comment