Energy Diversification's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/128447/comments http://seekingalpha.com/article/95941-vinod-khosla-time-to-get-practical-on-energy-solutions?source=feed#comment-258090 258090
If he didn't rip on solar so unreasonably, people may have noticed that he has a good point about putting solar panels in the desert.]]> Thu, 18 Sep 2008 12:26:27 -0400
If he didn't rip on solar so unreasonably, people may have noticed that he has a good point about putting solar panels in the desert.]]> http://seekingalpha.com/article/95949-analyst-oil-prices-inflated-by-50?source=feed#comment-258076 258076
This is all testament to the rarely-discussed fact that we know very little about oil reserves and production, particularly in Saudi Arabia. We can listen to Hard Assets Investor and Jim Cramer tell us every day that its "not about supply disruptions, its about demand"... but the 1970s proved that supply disruptions can cause HUGE problems.

To deny that we face the same risks in the oil supply chain - or worse risks - as we did in the 1970s, is simply ignoring reality.

One terrorist attack on Saudi oil production will show the world how much at-risk our oil supplies are.

In this environment, as long as nothing goes wrong - a huge assumption - sure, oil prices may moderate. But then when a "surprise" event occurs - an act of war, terrorism, or God - all the oil Bears will say "well, no one could have predicted THAT!" But of course, its funny how unpredictable things always seem to happen.

And when those things do happen - Democrats will lament their opposition to coal and nuclear, Republicans will lament their opposition to longer-term alternative energy sources, and the country will lament its fixation on electric cars without any concern for how that electricity can be produced over the next ten years. And Vinod Khosla's utterly fraudulent claims about "cellulosic ethanol for $1 a gallon" will be revealed for the self-serving hype that they are.]]> Thu, 18 Sep 2008 12:19:36 -0400
This is all testament to the rarely-discussed fact that we know very little about oil reserves and production, particularly in Saudi Arabia. We can listen to Hard Assets Investor and Jim Cramer tell us every day that its "not about supply disruptions, its about demand"... but the 1970s proved that supply disruptions can cause HUGE problems.

To deny that we face the same risks in the oil supply chain - or worse risks - as we did in the 1970s, is simply ignoring reality.

One terrorist attack on Saudi oil production will show the world how much at-risk our oil supplies are.

In this environment, as long as nothing goes wrong - a huge assumption - sure, oil prices may moderate. But then when a "surprise" event occurs - an act of war, terrorism, or God - all the oil Bears will say "well, no one could have predicted THAT!" But of course, its funny how unpredictable things always seem to happen.

And when those things do happen - Democrats will lament their opposition to coal and nuclear, Republicans will lament their opposition to longer-term alternative energy sources, and the country will lament its fixation on electric cars without any concern for how that electricity can be produced over the next ten years. And Vinod Khosla's utterly fraudulent claims about "cellulosic ethanol for $1 a gallon" will be revealed for the self-serving hype that they are.]]> http://seekingalpha.com/article/95949-analyst-oil-prices-inflated-by-50?source=feed#comment-258075 258075
This is all testament to the rarely-discussed fact that we know very little about oil reserves and production, particularly in Saudi Arabia. We can listen to Hard Assets Investor and Jim Cramer tell us every day that its "not about supply disruptions, its about demand"... but the 1970s proved that supply disruptions can cause HUGE problems.

To deny that we face the same risks in the oil supply chain - or worse risks - as we did in the 1970s, is simply ignoring reality.

One terrorist attack on Saudi oil production will show the world how much at-risk our oil supplies are.

In this environment, as long as nothing goes wrong - a huge assumption - sure, oil prices may moderate. But then when a "surprise" event occurs - an act of war, terrorism, or God - all the oil Bears will say "well, no one could have predicted THAT!" But of course, its funny how unpredictable things always seem to happen.

And when those things do happen - Democrats will lament their opposition to coal and nuclear, Republicans will lament their opposition to longer-term alternative energy sources, and the country will lament its fixation on electric cars without any concern for how that electricity can be produced over the next ten years. And Vinod Khosla's utterly fraudulent claims about "cellulosic ethanol for $1 a gallon" will be revealed for the self-serving hype that they are.]]> Thu, 18 Sep 2008 12:19:36 -0400
This is all testament to the rarely-discussed fact that we know very little about oil reserves and production, particularly in Saudi Arabia. We can listen to Hard Assets Investor and Jim Cramer tell us every day that its "not about supply disruptions, its about demand"... but the 1970s proved that supply disruptions can cause HUGE problems.

To deny that we face the same risks in the oil supply chain - or worse risks - as we did in the 1970s, is simply ignoring reality.

One terrorist attack on Saudi oil production will show the world how much at-risk our oil supplies are.

In this environment, as long as nothing goes wrong - a huge assumption - sure, oil prices may moderate. But then when a "surprise" event occurs - an act of war, terrorism, or God - all the oil Bears will say "well, no one could have predicted THAT!" But of course, its funny how unpredictable things always seem to happen.

And when those things do happen - Democrats will lament their opposition to coal and nuclear, Republicans will lament their opposition to longer-term alternative energy sources, and the country will lament its fixation on electric cars without any concern for how that electricity can be produced over the next ten years. And Vinod Khosla's utterly fraudulent claims about "cellulosic ethanol for $1 a gallon" will be revealed for the self-serving hype that they are.]]> http://seekingalpha.com/article/95173-foster-wheeler-best-of-breed-stock-in-a-beaten-down-industry?source=feed#comment-253376 253376
Also, get rid of the photo taken in Mom's basement.]]> Sat, 13 Sep 2008 09:40:42 -0400
Also, get rid of the photo taken in Mom's basement.]]> http://seekingalpha.com/article/93364-the-new-energy-cold-war-the-warsaw-tehran-connection?source=feed#comment-242644 242644
Many argue that Obama will have greater clout in Europe, but has shown no interest in using that prestige to get the Europeans to step up to defend themselves proactively.

After so much time and effort in building the "European Union", its surprising how quickly Europe is ready to define itself down, & let countries on the Eastern periphery fend for themselves.

This is quite serious - more serious than Iraq, in fact. Unfortunately neither Europeans nor Americans seem to agree on any of the lessons of the events leading to World War II. We are going to pay the price for the uncritical glorification of "multilateralism", as we eventually realize that Putin doesn't factor global disapproval (even if it existed) in to his plans.

A long range energy plan promoting natural gas, oil drilling, nuclear and solar power -- which would have an impact chronologically in the order I listed them -- would help America, Europe and the world resist the influence of the Russia - Iran - Venezuela axis. We seem to be moving very slowly in that direction. But quite frankly, as long as Western academics continue to ignore the need for reliable energy sources and a strong military alliance with Europe, we will become progressively more vulnerable.]]> Sun, 31 Aug 2008 13:23:23 -0400
Many argue that Obama will have greater clout in Europe, but has shown no interest in using that prestige to get the Europeans to step up to defend themselves proactively.

After so much time and effort in building the "European Union", its surprising how quickly Europe is ready to define itself down, & let countries on the Eastern periphery fend for themselves.

This is quite serious - more serious than Iraq, in fact. Unfortunately neither Europeans nor Americans seem to agree on any of the lessons of the events leading to World War II. We are going to pay the price for the uncritical glorification of "multilateralism", as we eventually realize that Putin doesn't factor global disapproval (even if it existed) in to his plans.

A long range energy plan promoting natural gas, oil drilling, nuclear and solar power -- which would have an impact chronologically in the order I listed them -- would help America, Europe and the world resist the influence of the Russia - Iran - Venezuela axis. We seem to be moving very slowly in that direction. But quite frankly, as long as Western academics continue to ignore the need for reliable energy sources and a strong military alliance with Europe, we will become progressively more vulnerable.]]> http://seekingalpha.com/article/93364-the-new-energy-cold-war-the-warsaw-tehran-connection?source=feed#comment-242643 242643
Many argue that Obama will have greater clout in Europe, but has shown no interest in using that prestige to get the Europeans to step up to defend themselves proactively.

After so much time and effort in building the "European Union", its surprising how quickly Europe is ready to define itself down, & let countries on the Eastern periphery fend for themselves.

This is quite serious - more serious than Iraq, in fact. Unfortunately neither Europeans nor Americans seem to agree on any of the lessons of the events leading to World War II. We are going to pay the price for the uncritical glorification of "multilateralism", as we eventually realize that Putin doesn't factor global disapproval (even if it existed) in to his plans.

A long range energy plan promoting natural gas, oil drilling, nuclear and solar power -- which would have an impact chronologically in the order I listed them -- would help America, Europe and the world resist the influence of the Russia - Iran - Venezuela axis. We seem to be moving very slowly in that direction. But quite frankly, as long as Western academics continue to ignore the need for reliable energy sources and a strong military alliance with Europe, we will become progressively more vulnerable.]]> Sun, 31 Aug 2008 13:23:23 -0400
Many argue that Obama will have greater clout in Europe, but has shown no interest in using that prestige to get the Europeans to step up to defend themselves proactively.

After so much time and effort in building the "European Union", its surprising how quickly Europe is ready to define itself down, & let countries on the Eastern periphery fend for themselves.

This is quite serious - more serious than Iraq, in fact. Unfortunately neither Europeans nor Americans seem to agree on any of the lessons of the events leading to World War II. We are going to pay the price for the uncritical glorification of "multilateralism", as we eventually realize that Putin doesn't factor global disapproval (even if it existed) in to his plans.

A long range energy plan promoting natural gas, oil drilling, nuclear and solar power -- which would have an impact chronologically in the order I listed them -- would help America, Europe and the world resist the influence of the Russia - Iran - Venezuela axis. We seem to be moving very slowly in that direction. But quite frankly, as long as Western academics continue to ignore the need for reliable energy sources and a strong military alliance with Europe, we will become progressively more vulnerable.]]> http://seekingalpha.com/article/85233-stay-away-from-charter-communications-bankruptcy-filing-looming?source=feed#comment-206953 206953
Short of that, the author is correct to point out the risk of refinancing in this market environment. However, to put this in perspective, we also need to discuss the strong asset values of cable operators - both physical assets and relatively permanent customer lists.

The history of the cable television industry over the past 15 years is rich in examples of highly leveraged companies. In a few cases, bankruptcies have occurred. We should also point out that as growth has occurred and markets recovered, some cable stocks have realized massive returns. In the 1990s, firms like Cablevision Systems, Adelphia, Charter and others incurred high levels of debt, drew the wrath of conservative equity analysts - and proceeded to deliver multiple 100% returns for investors.

Adelphia and Charter were victims of overly aggressive financing strategies. CVC however did well.

Mediacom Communications (MCCC) currently had high levels of debt - but also trades at a single digit EBITDA multiple (trailing) and has very high levels of insider ownership (50%). This company has been buying back stock and has no near term liquidity risk.

A relatively small increase in cable asset values could yield a huge return on the current stock price. If there is a near term risk at Charter, MCCC would trade down as a reaction - at which point I would be buying more.

Moreover, Mediacom operates in areas with no fiber competition from Verizon and AT&T. Its only high speed internet competition is DSL - and we believe DSL prices will trend higher in the wake of FCC decisions deregulating the pricing of network elements by phone companies, resulting in a more expensive operating enviroment for DSL resellers. This will result in higher DSL pricing, making cable's internet offering more attractive in areas where they compete.]]> Wed, 16 Jul 2008 12:11:29 -0400
Short of that, the author is correct to point out the risk of refinancing in this market environment. However, to put this in perspective, we also need to discuss the strong asset values of cable operators - both physical assets and relatively permanent customer lists.

The history of the cable television industry over the past 15 years is rich in examples of highly leveraged companies. In a few cases, bankruptcies have occurred. We should also point out that as growth has occurred and markets recovered, some cable stocks have realized massive returns. In the 1990s, firms like Cablevision Systems, Adelphia, Charter and others incurred high levels of debt, drew the wrath of conservative equity analysts - and proceeded to deliver multiple 100% returns for investors.

Adelphia and Charter were victims of overly aggressive financing strategies. CVC however did well.

Mediacom Communications (MCCC) currently had high levels of debt - but also trades at a single digit EBITDA multiple (trailing) and has very high levels of insider ownership (50%). This company has been buying back stock and has no near term liquidity risk.

A relatively small increase in cable asset values could yield a huge return on the current stock price. If there is a near term risk at Charter, MCCC would trade down as a reaction - at which point I would be buying more.

Moreover, Mediacom operates in areas with no fiber competition from Verizon and AT&T. Its only high speed internet competition is DSL - and we believe DSL prices will trend higher in the wake of FCC decisions deregulating the pricing of network elements by phone companies, resulting in a more expensive operating enviroment for DSL resellers. This will result in higher DSL pricing, making cable's internet offering more attractive in areas where they compete.]]> http://seekingalpha.com/article/85233-stay-away-from-charter-communications-bankruptcy-filing-looming?source=feed#comment-206952 206952
Short of that, the author is correct to point out the risk of refinancing in this market environment. However, to put this in perspective, we also need to discuss the strong asset values of cable operators - both physical assets and relatively permanent customer lists.

The history of the cable television industry over the past 15 years is rich in examples of highly leveraged companies. In a few cases, bankruptcies have occurred. We should also point out that as growth has occurred and markets recovered, some cable stocks have realized massive returns. In the 1990s, firms like Cablevision Systems, Adelphia, Charter and others incurred high levels of debt, drew the wrath of conservative equity analysts - and proceeded to deliver multiple 100% returns for investors.

Adelphia and Charter were victims of overly aggressive financing strategies. CVC however did well.

Mediacom Communications (MCCC) currently had high levels of debt - but also trades at a single digit EBITDA multiple (trailing) and has very high levels of insider ownership (50%). This company has been buying back stock and has no near term liquidity risk.

A relatively small increase in cable asset values could yield a huge return on the current stock price. If there is a near term risk at Charter, MCCC would trade down as a reaction - at which point I would be buying more.

Moreover, Mediacom operates in areas with no fiber competition from Verizon and AT&T. Its only high speed internet competition is DSL - and we believe DSL prices will trend higher in the wake of FCC decisions deregulating the pricing of network elements by phone companies, resulting in a more expensive operating enviroment for DSL resellers. This will result in higher DSL pricing, making cable's internet offering more attractive in areas where they compete.]]> Wed, 16 Jul 2008 12:11:29 -0400
Short of that, the author is correct to point out the risk of refinancing in this market environment. However, to put this in perspective, we also need to discuss the strong asset values of cable operators - both physical assets and relatively permanent customer lists.

The history of the cable television industry over the past 15 years is rich in examples of highly leveraged companies. In a few cases, bankruptcies have occurred. We should also point out that as growth has occurred and markets recovered, some cable stocks have realized massive returns. In the 1990s, firms like Cablevision Systems, Adelphia, Charter and others incurred high levels of debt, drew the wrath of conservative equity analysts - and proceeded to deliver multiple 100% returns for investors.

Adelphia and Charter were victims of overly aggressive financing strategies. CVC however did well.

Mediacom Communications (MCCC) currently had high levels of debt - but also trades at a single digit EBITDA multiple (trailing) and has very high levels of insider ownership (50%). This company has been buying back stock and has no near term liquidity risk.

A relatively small increase in cable asset values could yield a huge return on the current stock price. If there is a near term risk at Charter, MCCC would trade down as a reaction - at which point I would be buying more.

Moreover, Mediacom operates in areas with no fiber competition from Verizon and AT&T. Its only high speed internet competition is DSL - and we believe DSL prices will trend higher in the wake of FCC decisions deregulating the pricing of network elements by phone companies, resulting in a more expensive operating enviroment for DSL resellers. This will result in higher DSL pricing, making cable's internet offering more attractive in areas where they compete.]]> http://seekingalpha.com/article/77332-nuclear-power-is-in-demand?source=feed#comment-168942 168942
This does not invalidate the nuclear energy proposition, but its clearly an issue worth evaluating in light of the climate change arguments.

From an investment standpoint, the single largest exposure to all aspects of the value chain from uranium exploration and production to nuclear plant construction and management is Areva (CEI.PA / ARVCF.PK). For a more diversified energy and infrastructure play, but with clear exposure to nuclear plant development, Shaw Group (SGR) is a good opportunity. Energy Solutions (ES) is a back-end play on the management of nuclear sites & waste.

Its important not to buy a basket of any old equities with nuclear attached to them. The utilities mentioned above are going to be the ones paying to develop nuclear plants, so its a capital drain for them for a long time. And with the latest estimates of plants costs at $5 billion to $12 (twelve!) billion, even with loan guarantees, this is a distant way to play nuclear.

Denison Mines (DML.TO / DNN) should clearly have been mentioned alongside Cameco and Uranium One. The point I would focus on here is a very strategic one: CHINA is likely to be both the nearest-term AND largest nuclear developer. Why? It can make it happen faster (for better or worse) because NIMBY concerns can be ignored. More importantly, remember that the Chinese lose 5,000 coal miners every year! These direct deaths coupled with the indirect health issues are a clear concern in China -- the government is aware and cares about these issues.

Many uranium-watchers claim China will try to tie up strategic uranium reserves by buying public explorers and producers. China has no reason to publicly announce this, but it has recently confirmed that its nuclear development is much further along that was expected. China also reportedly met with Cameco recently.

If China were to buy uranium companies, it would go for geographically accessible nations -- and ones without the finger-wagging they get from Australia (for example) about weapons proliferation. India is also going to have the same issues, given that even America will not sign a nuclear agreement with the largest democracy in the world!

Uranium One has operations in Kazhakstan -- very accessible to China and India. Despite its recent logistics challenges operating there, UUU.TO is a logical target, if you like this strategic reserve argument. The American and Canadian producers are not logical targets. Africa is a logical choice, although it a true energy crisis, the Chinese may feel safer having a source closer to home.

I'd steer clear of USEC -- the growth opportunity here has never been clear, and US uranium demand is years away from a significant increase. In fact, the biggest risk to US uranium supply is the Russia agreement being cut back -- but down-blending Russian HEU is a major revenue source for USEC, so it could even negatively affect them.

Finally, hedge funds enjoyed a huge run-up in both physical uranium and uranium explorers. They have reportedly been running from this sector, so the bubble in these shares could still be deflating for a while. Remember there are over 500 public uranium explorers -- clear indication of a bubble within this small sector of the market.]]> Fri, 16 May 2008 13:34:43 -0400
This does not invalidate the nuclear energy proposition, but its clearly an issue worth evaluating in light of the climate change arguments.

From an investment standpoint, the single largest exposure to all aspects of the value chain from uranium exploration and production to nuclear plant construction and management is Areva (CEI.PA / ARVCF.PK). For a more diversified energy and infrastructure play, but with clear exposure to nuclear plant development, Shaw Group (SGR) is a good opportunity. Energy Solutions (ES) is a back-end play on the management of nuclear sites & waste.

Its important not to buy a basket of any old equities with nuclear attached to them. The utilities mentioned above are going to be the ones paying to develop nuclear plants, so its a capital drain for them for a long time. And with the latest estimates of plants costs at $5 billion to $12 (twelve!) billion, even with loan guarantees, this is a distant way to play nuclear.

Denison Mines (DML.TO / DNN) should clearly have been mentioned alongside Cameco and Uranium One. The point I would focus on here is a very strategic one: CHINA is likely to be both the nearest-term AND largest nuclear developer. Why? It can make it happen faster (for better or worse) because NIMBY concerns can be ignored. More importantly, remember that the Chinese lose 5,000 coal miners every year! These direct deaths coupled with the indirect health issues are a clear concern in China -- the government is aware and cares about these issues.

Many uranium-watchers claim China will try to tie up strategic uranium reserves by buying public explorers and producers. China has no reason to publicly announce this, but it has recently confirmed that its nuclear development is much further along that was expected. China also reportedly met with Cameco recently.

If China were to buy uranium companies, it would go for geographically accessible nations -- and ones without the finger-wagging they get from Australia (for example) about weapons proliferation. India is also going to have the same issues, given that even America will not sign a nuclear agreement with the largest democracy in the world!

Uranium One has operations in Kazhakstan -- very accessible to China and India. Despite its recent logistics challenges operating there, UUU.TO is a logical target, if you like this strategic reserve argument. The American and Canadian producers are not logical targets. Africa is a logical choice, although it a true energy crisis, the Chinese may feel safer having a source closer to home.

I'd steer clear of USEC -- the growth opportunity here has never been clear, and US uranium demand is years away from a significant increase. In fact, the biggest risk to US uranium supply is the Russia agreement being cut back -- but down-blending Russian HEU is a major revenue source for USEC, so it could even negatively affect them.

Finally, hedge funds enjoyed a huge run-up in both physical uranium and uranium explorers. They have reportedly been running from this sector, so the bubble in these shares could still be deflating for a while. Remember there are over 500 public uranium explorers -- clear indication of a bubble within this small sector of the market.]]> http://seekingalpha.com/article/71916-shaw-s-earnings-miss-not-surprising?source=feed#comment-159462 159462 CBI) weak quarter and massive sell-off seems to fit in the pattern you have outlined. These guys may all take hits if global recession becomes clearer, but they may also be the ones to hold up well as energy & resource plays. Today's damage looks excessive to me.]]> Wed, 30 Apr 2008 12:35:29 -0400 CBI) weak quarter and massive sell-off seems to fit in the pattern you have outlined. These guys may all take hits if global recession becomes clearer, but they may also be the ones to hold up well as energy & resource plays. Today's damage looks excessive to me.]]> http://seekingalpha.com/article/71667-uranium-miners-expected-to-benefit-from-falling-inventories?source=feed#comment-150468 150468
These are both pure play uranium producers, with fewer hedging issues than CCJ has had. Uranium One has been hammered for other good, fundamental reasons. Perhaps CCJ is the "safe" play, but if you are looking to take a strong view, I would think there are better ways to go.

I don't own any of these but am interested in the logic of going with CCJ.]]> Mon, 14 Apr 2008 12:19:08 -0400
These are both pure play uranium producers, with fewer hedging issues than CCJ has had. Uranium One has been hammered for other good, fundamental reasons. Perhaps CCJ is the "safe" play, but if you are looking to take a strong view, I would think there are better ways to go.

I don't own any of these but am interested in the logic of going with CCJ.]]> http://seekingalpha.com/article/72083-water-industry-spending-still-up-but-clouds-loom?source=feed#comment-150459 150459
There are a few overseas water plays -- difficult to gather good information and insight on, so this is an opportunity for any analysts with a deeper focus on water.

I would look at Epure (China based, Singapore traded) and Doosan (Korea).]]> Mon, 14 Apr 2008 12:11:14 -0400
There are a few overseas water plays -- difficult to gather good information and insight on, so this is an opportunity for any analysts with a deeper focus on water.

I would look at Epure (China based, Singapore traded) and Doosan (Korea).]]> http://seekingalpha.com/article/72092-jim-rogers-picks-and-pans-barron-s-interview?source=feed#comment-150414 150414
I am watching "nontraditional" commodities -- water (esp in Asia), rare earths, and possibly uranium.]]> Mon, 14 Apr 2008 11:37:17 -0400
I am watching "nontraditional" commodities -- water (esp in Asia), rare earths, and possibly uranium.]]> http://seekingalpha.com/article/69433-investing-in-commodities-is-the-fear-factor-justified?source=feed#comment-149918 149918
Despite the apparent promise of Mt. Weld, I find it curious that BHP Billiton would have optioned this property to anyone, rather than develop the site itself.]]> Sun, 13 Apr 2008 15:27:50 -0400
Despite the apparent promise of Mt. Weld, I find it curious that BHP Billiton would have optioned this property to anyone, rather than develop the site itself.]]> http://seekingalpha.com/article/66451-water-etfs-commodity-or-infrastructure-investments?source=feed#comment-132701 132701
ETFs seem to be a marketing-driven product, tapping investor interest in water while avoiding the discussion of key issues.

Higher infrastructure spending may negatively impact utilities, who are unable to pass higher costs on to customers.

From an environmental standpoint, these funds can be misleading. Utilities are huge users of groundwater. PICO is actually a water hoarding play in the Nevada desert.

Lumping all these companies together in an ETF shows a lack of focus.]]> Thu, 27 Mar 2008 19:02:52 -0400
ETFs seem to be a marketing-driven product, tapping investor interest in water while avoiding the discussion of key issues.

Higher infrastructure spending may negatively impact utilities, who are unable to pass higher costs on to customers.

From an environmental standpoint, these funds can be misleading. Utilities are huge users of groundwater. PICO is actually a water hoarding play in the Nevada desert.

Lumping all these companies together in an ETF shows a lack of focus.]]> http://seekingalpha.com/article/49440-water-infrastructure-attracts-big-spending-but-filtration-has-the-momentum?source=feed#comment-126746 126746
However, several issues leap out:

1. We have been hearing about the need for water infrastructure spending in this country for years. Every disaster (blackouts, bridge collapse, etc) is positioned as the catalyst for infrastructure spending. Is it fair to say this will be a 10 - 20 year spending ramp, rather than a near term (1-3 year) event?

2. Given that most water systems are government run and financed (through user fees and bond issuance), a recession could reduce tax revenue and push back these improvements? (Note -- As you point out, this could benefit high-tech band aid solutions like INSU.)

3. With respect to China, this needs to be flushed out, so to speak. The Olympics are almost here, so we can't use Beijing as an argument for why the Chinese need to accelerate spending. China just reshuffled its infrastructure leadership. Do you have any specific insight on how exactly China's water upgrades may play out? (What about companies like Epure and Doosan, with a big presence in Asia?)

4. Your water surveys are very interesting to consider. Of course, given the years of infrastructure expectations that have not materialized, have you back-tested these surveys over the years to see if the respondents are good predictors? Or do they suffer from center-of-the-universe syndrome as many bureaucrats do?

Final comment: It will be useful to see how solar energy spending by governments plays out over the next year or two. Will government spending cutbacks reduce the enthusiasm for these subsidies? Or will the focus on infrastructure and energy needs keep them subsidizing solar power? I am not arguing for solar power; rather pointing to it as an indicator of how tough economic times could lead to *reduced* infrastructure spending.]]> Fri, 14 Mar 2008 21:00:58 -0400
However, several issues leap out:

1. We have been hearing about the need for water infrastructure spending in this country for years. Every disaster (blackouts, bridge collapse, etc) is positioned as the catalyst for infrastructure spending. Is it fair to say this will be a 10 - 20 year spending ramp, rather than a near term (1-3 year) event?

2. Given that most water systems are government run and financed (through user fees and bond issuance), a recession could reduce tax revenue and push back these improvements? (Note -- As you point out, this could benefit high-tech band aid solutions like INSU.)

3. With respect to China, this needs to be flushed out, so to speak. The Olympics are almost here, so we can't use Beijing as an argument for why the Chinese need to accelerate spending. China just reshuffled its infrastructure leadership. Do you have any specific insight on how exactly China's water upgrades may play out? (What about companies like Epure and Doosan, with a big presence in Asia?)

4. Your water surveys are very interesting to consider. Of course, given the years of infrastructure expectations that have not materialized, have you back-tested these surveys over the years to see if the respondents are good predictors? Or do they suffer from center-of-the-universe syndrome as many bureaucrats do?

Final comment: It will be useful to see how solar energy spending by governments plays out over the next year or two. Will government spending cutbacks reduce the enthusiasm for these subsidies? Or will the focus on infrastructure and energy needs keep them subsidizing solar power? I am not arguing for solar power; rather pointing to it as an indicator of how tough economic times could lead to *reduced* infrastructure spending.]]> http://seekingalpha.com/article/64955-5-must-read-articles-in-oil-and-alternative-energy?source=feed#comment-117414 117414
The reality - as reflected above - is that a lot of alternatives are being pursued. Very smart people cannot all agree on the answer, so rather than having the government just "do something" and push one solution, perhaps we ought to accept that this is a long process.

The reality is that nuclear power works, and works on a large scale. If we had to just "do something" right now, nuclear power would be the safest bet. There are risks and problems with it, which justify a more diversified approach. But with that in mind, I think you have to step back and respect that this is not an immediate process.

If anyone thinks we're just going to stick a new President in there, slap some solar panels on our roofs, and stop using oil -- good luck.

The problem is not lack of imagination. Its too much imagination without real consideration of what can actually work. I've heard solar fairy tales for 30 years. "We'll be all solar by 1990." I'm not anti-solar now, but you sure have to keep things in perspective. There are always Pollyannas with big promises -- who stand to make a lot of money by selling out.

Why is it that all of these great, cheap, large scale solutions always demand government subsidies? There are so many cellulosic ethanol players out there now promising that $1 production costs are *already* achievable with their technology. Then why do we need subsidies? Actions speak louder than words.

We are still in the R&D phase -- let's accept that and acknowledge that these are venture-stage investments in most cases.]]> Wed, 20 Feb 2008 12:31:39 -0500
The reality - as reflected above - is that a lot of alternatives are being pursued. Very smart people cannot all agree on the answer, so rather than having the government just "do something" and push one solution, perhaps we ought to accept that this is a long process.

The reality is that nuclear power works, and works on a large scale. If we had to just "do something" right now, nuclear power would be the safest bet. There are risks and problems with it, which justify a more diversified approach. But with that in mind, I think you have to step back and respect that this is not an immediate process.

If anyone thinks we're just going to stick a new President in there, slap some solar panels on our roofs, and stop using oil -- good luck.

The problem is not lack of imagination. Its too much imagination without real consideration of what can actually work. I've heard solar fairy tales for 30 years. "We'll be all solar by 1990." I'm not anti-solar now, but you sure have to keep things in perspective. There are always Pollyannas with big promises -- who stand to make a lot of money by selling out.

Why is it that all of these great, cheap, large scale solutions always demand government subsidies? There are so many cellulosic ethanol players out there now promising that $1 production costs are *already* achievable with their technology. Then why do we need subsidies? Actions speak louder than words.

We are still in the R&D phase -- let's accept that and acknowledge that these are venture-stage investments in most cases.]]> http://seekingalpha.com/article/64887-uranium-on-the-rise?source=feed#comment-117183 117183
On the one hand, we have very valid arguments that China will need (and in my view, already has much more massive plans than we have been informed of) to build nuclear plants. However, even in regulatory-lite China, these plants will not be online for at least a decade. And even if China were to double the build-rate of nuclear reactors that the world achieved during the building boom in the 70s-80s, its going to be a long, long time before this drives uranium demand.

Now of course investors are right to try to position themselves for this future demand increase. But the reality is (the analysis that is always skipped) is that there is a lot of production coming on line, from the very companies mentioned here - Uranium One, Denison, etc.

Over the next few years, we are looking at an OVER supply issue, not a shortage. Even with Uranium One's sulfuric acid problems in Kazakhstan, they still expect massive production ramp ups.

There is a contradiction when we talk about the growth prospects for all the companies - based on their production expectations - but then we don't address the broad supply/demand situation for uranium. If these guys meet their targets, we will have an oversupply for years. This is a long time to ride out from an investment perspective.

Moreover, no one is analyzing the true production cost of uranium. And you're going to need to, because even if you don't believe this is a problem, the anti-nuclear side is coming out with a host of well-reasoned arguments that large-scale mining of somewhat lower-grade uranium is going to cost a lot more -- and may even have a negative EROIE! This message will impact the market because the popular press will repeat it, reinforcing its own anti-nuclear bias for a few more years.

Finally -- if you truly believe the nuclear story, why not play the engineering firms that will be booking business from this buildout -- SGR, MDR, FLR, FWLT and of course CEI.PA (AREVA)?

Perhaps this is because the majority of uranium stock traders are basically inept analysts feverishly drawing "trend lines" to try to justify their way out of the hole they are in for chasing uranium equities to unreasonable heights last Spring?]]> Tue, 19 Feb 2008 12:32:30 -0500
On the one hand, we have very valid arguments that China will need (and in my view, already has much more massive plans than we have been informed of) to build nuclear plants. However, even in regulatory-lite China, these plants will not be online for at least a decade. And even if China were to double the build-rate of nuclear reactors that the world achieved during the building boom in the 70s-80s, its going to be a long, long time before this drives uranium demand.

Now of course investors are right to try to position themselves for this future demand increase. But the reality is (the analysis that is always skipped) is that there is a lot of production coming on line, from the very companies mentioned here - Uranium One, Denison, etc.

Over the next few years, we are looking at an OVER supply issue, not a shortage. Even with Uranium One's sulfuric acid problems in Kazakhstan, they still expect massive production ramp ups.

There is a contradiction when we talk about the growth prospects for all the companies - based on their production expectations - but then we don't address the broad supply/demand situation for uranium. If these guys meet their targets, we will have an oversupply for years. This is a long time to ride out from an investment perspective.

Moreover, no one is analyzing the true production cost of uranium. And you're going to need to, because even if you don't believe this is a problem, the anti-nuclear side is coming out with a host of well-reasoned arguments that large-scale mining of somewhat lower-grade uranium is going to cost a lot more -- and may even have a negative EROIE! This message will impact the market because the popular press will repeat it, reinforcing its own anti-nuclear bias for a few more years.

Finally -- if you truly believe the nuclear story, why not play the engineering firms that will be booking business from this buildout -- SGR, MDR, FLR, FWLT and of course CEI.PA (AREVA)?

Perhaps this is because the majority of uranium stock traders are basically inept analysts feverishly drawing "trend lines" to try to justify their way out of the hole they are in for chasing uranium equities to unreasonable heights last Spring?]]> http://seekingalpha.com/article/56617-notes-from-the-35th-ubs-media-conference-misleading-investors-back-to-the-70s?source=feed#comment-104461 104461
After wasting 5 minutes of my life reading this, and wading through paragraph after paragraph of comma, separated, lists, of, everything, its not quite clear what he's saying -- and its certainly not clear that I should dump my holdings in any of the media stocks he mentions.

This article has little to do with investing, and its a poor reflection on both SA, and more importantly, Yahoo. Why does Yahoo waste its platform giving high profile news placements to advertisements like this.

I feel like someone just told me to drink more Ovaltine.]]> Fri, 07 Dec 2007 10:04:13 -0500
After wasting 5 minutes of my life reading this, and wading through paragraph after paragraph of comma, separated, lists, of, everything, its not quite clear what he's saying -- and its certainly not clear that I should dump my holdings in any of the media stocks he mentions.

This article has little to do with investing, and its a poor reflection on both SA, and more importantly, Yahoo. Why does Yahoo waste its platform giving high profile news placements to advertisements like this.

I feel like someone just told me to drink more Ovaltine.]]>