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Bobbejaan

Bobbejaan
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  • Johnson & Johnson: Offering Strong Yield and Steady Growth [View article]
    JNJ is one of the easiest shares to invest in. Do it and leave it alone for the long term. Boring and simple, no problem.
    May 14, 2009. 01:09 AM | 2 Likes Like |Link to Comment
  • Which Vehicle Is Best for a Long Bet on Oil? [View article]
    The oil price rise will be driven by ongoing demand for refined products and hydrocarbon energy in combination with a decline in production. On this basis you need to select either a producer with future reserves or someone who will benefit through providing services to the producers. Refining may not benefit, as there is likely to be enough capacity. For the long run a combination of the following should be good and safe:
    - Sasol (SSL): converts coal and gas into oil and gets the value of oil products.
    - Integrated oil companies like Total (TOT), ExxonMobil (XOM) or Statoil (STO). The problem here is availability to reserves, some in "unfriendly" places.
    - Woodside Petroleum (WPL.AX), an Australian producer of oil and LNG with large investments in the pipeline and with large reserves in safe areas.
    - Oil service companies and drillers (SLB, RIG or DO). They do not rely on having oil, but benefit from services when prices rise and searching for oil takes off again.

    A balanced approach is better than all eggs in one basket.
    May 9, 2009. 11:57 PM | 1 Like Like |Link to Comment
  • Oil Price Outlook Not Good: Recovery Takes Time [View article]
    Oil prices are largely unpredictable, but its movements over the last number of years have provided interesting insights.

    When oil prices moved from ~$30/bbl to ~$80/bbl, and even during the bubble phase when it spiked to near $150/bbl, the primary driver was not a shortage of crude. Crude was avialable for trading and refining. Many market sources did not agree, but OPEC was right by insisting that they had no reason to increase production because there was enough crude. What drove prices up was demand for refined products and the bottleneck of insufficient refineries to meet demand for the right quality in the right region, ie refining and distribution constraints.

    These constraints are gone now, due to lower product demand. Oil prices have returned to a more market-related supply-demand level. One can reason that crude should remain at these levels until something comes in its way again. This could be:
    - Increased demand, one day if/when economies recover (will again drive prices up).
    - Crude supply deterioration (will drive prices up again).
    - Catastrophies.
    - Trends to reduce oil consumption.

    In the short to medium term I conclude that crude should remain around current levels, or creep up slowly as the US$ weakens. This could be another 4-5 years.
    Apr 7, 2009. 05:49 AM | 2 Likes Like |Link to Comment
  • In Favor of a Slicker Currency [View article]
    And you can add Total (TOT) to the list...
    Jan 22, 2009. 04:24 AM | Likes Like |Link to Comment
  • Methanex: Worth Another Look [View article]
    Your analysis contains a number serious fundamental flaws. Firstly Methanex are not in the business of "extracting and shipping methane". Rather it is a producer of methanol (also known as MeOH), using natural gas. So its main feedstock is natural gas. That is also why they shut their plants in New Zealand, a lack of natural gas in New Zealand - now operating at reduced capacity again.

    The company's fortunes, or misfortune, lies with the price of methanol, a commodity used in the petrochemical industry.
    Jan 19, 2009. 03:59 AM | 3 Likes Like |Link to Comment
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