yank

Will Oil Be the Last Asset Standing?

kmi:
you are missing the point entirely. Since 2000 the costs of E&P for the oil cos has risen over 75%. The main point is these costs are not going down anytime soon. The Saudi oil minister isn't kidding when he says he needs $70 oil to justfiy spending billions to expand refineries, drill more wells, etc. All of us need to stop living in the past. The days of cheap oil ($10-20) are gone. FOREVER. And I don't buy for one minute that $70 oil will halt a global economic recovery. We saw last year that growth continued well above the $100 level. Do you realize that $2.50/gallon adjusted for inflation is about .35 cents in 1973 dollars, which is right about what we were paying at the pump before the oil embargo. There is absolutely no proof that the Chinese (or anyone else for that matter except Brazilians) are "diversifying" away from oil. Most geology experts confirm that fossil fuels will remain the dominant energy source well into the middle of this century. Alternative energy is a pipedream. Deal with it.

Yank


On Aug 25 08:56 AM kmi wrote:

> Oil @ $70+ makes users look at alt energy sources. Sure you can argue
> that $70 is where it needs to be in order for producers to want to
> bring more product online but users will be looking at other sources,
> i.e. demand will fall (and is). This is not an economy that supports
> expensive energy; investment strategy is focused on decreasing costs
> and energy is a big one.
>
> Chinese may be buying more cars but they are also diversifying away
> from petroleum faster than the US; also during the last peak in energy
> prices China had an earthquake offline a lot of its NG production
> pressuring up oil (diesel), that's no longer the case.
>
> Nevermind the fact that the oil spike encouraged drilling and exploration
> and encouraged huge investments into renewables; I can't count how
> many major energy users have outfitted their installations with renewables
> since $147/barrel.
>
> I think oil buyers are trying to front run a turn around in the global
> economy but are stalling it instead. $70+ oil in these conditions
> does not allow users to reinvest in the economy just forces them
> to set aside capital and wait. Growth from $70/barrel? Optimism misplaced.
>
>
> Generally though I agree with your opinions in 2nd part of article.

The 15 Most Cash Rich Companies

I think you need to take a math course. "Oil at $30/bbl is high in inflation adjusted terms". Adjusted for inflation today's $30 oil is worth about $8 bbl in 1974 dollars (time of the last oil embargo). Or put another way gas pump prices today at $1.75 are the equivalent to .35 cents a gallon. If you find that expensive you are out of your mind. Oil is extremely undervalued even in the $45-50 range.


On Mar 15 12:33 PM MDLGTO wrote:

> Good starting point. I agree with other posts that cash flow per
> share would be a helpful measure AND that Net Cash/Debt is more important.
>
>
> With regard to specific stocks:
> AAPL garners a majority of revenue from Laptops and Ipods (macworld
> pie chart www.macworld.com/artic...)
> -IMHO these sales will evaporate along with other consumer disc.
> purchases. I think will crash hard. AND without Jobs, even more so.
>
>
> MSFT, as noted, cash rich for a long time--have really not gotten
> any traction with new products svcs-dependent on win/office. Some
> possible good news is that I THINK that companies will prefer to
> bleed a little w/ new licenses rather than take a large capital investment
> on low cost solutions (linux/google apps)--cap ex is in training/IT
> that can handle these jobs
>
> GOOG is VERY interesting 0 debt. Still a bit overpriced, But will
> continue to innovate (lots of blah blah about innovation in crisis
> type articles are around), advertising continue to shift to web (more
> cost effective and goog owns this arena). GOOG is the microsoft of
> tomorrow.
>
> I think PHARM is much maligned. Think about it people. For all the
> flak that Obama gets (I'm a liberal), He won't be able to change
> the system--look what happened under Clinton--A lot of talk, no change.
> AND Boomers are just now striding into their peak Medication years!!!
>
>
> BRK is, I think, a Buffet/munger vehicle-old guys whose active investing
> longevity won't outrun this downcycle.
>
> XOM etc. Great company, probably overvalued. I'd look at historical
> Oil prices--Even $30/bbl is avg/high in inflation adjusted terms.
>
>
> INTC-Not sure how their other lines stack up, but i'd guess worldwide
> chip demand is going to be neg/flat for a while.
>
> CSCO-Not great equipment, but Corps will need to maintain network
> status quo.
>
> HQP odd chimera of IT. Consumer sales will be neg/flat. I'd think
> their best days are over
>
> IBM as a friend wrote to me "we're outsourcing everything that's
> not bolted down" IBM should be able to capitalize on that
>
> TOM-Think consumer capital expenditures will not be great for some
> time.
>
> So, This is my 2 min Cramer exercise--look at IBM, GOOG, and pharm.
> I'd also be interested in Consumer Staples that have strong balance
> sheets/ low debt/equity ratios--Help me people!! Most consumeer staples
> seem to be too highly leveraged.

The Bull Run Begins This Week

Don't quote me on this but i thought I heard recently that NYT ad revenues for 2008 were roughly 50% of 2007 levels. I also understand that circulation is down 35% year over year. I don't question Carlos Slim's business savvy but I don't understand the rationale for taking a stake. Unquestionably, the print media is going the way of the dinosaur, reorganization or not. I think people have had enough of reading a paper that tells them who to vote for. About all this paper is good for is the bottom of my birdcage. I hope Sulzberger and his cronies rot in hell.


On Jan 20 02:03 PM curbs-in wrote:

> Yank:
>
> I heard the NY Times Corp. just got a cash infusion from a Mexican
> investor to keep them going. I'm not sure how that model will work...
> Now they charge $5.00 for their Sunday papaer -- the NYT just sits
> everywhere I've seen it for sale.

The Bull Run Begins This Week

Dixie:
You were right about the NY Times and CNN spouting Obama propaganda ad nauseum. And we thought Bush's presidency was the "Imperialist" presidency. Forgetabout it! The mass media has elevated Obama to a deity. It's absolutely revolting if you ask me. The day that the NY times declares bankruptcy will be a fine day. I will enjoy "dancing on their grave". As for Obama. Well what can you expect when one candidate outspends the other by 20:1 and is given a free pass by the media. And wasn't Barrack just a positive campaigner when he accused McCain of playing the race card, and then turned around and played it himself (...did I happen to mention the other candidate is black?) There's only one problem with Barack's comment. McCain NEVER made that statement. But it went unchallenged by the media because the NY times was too busy cooking up a fraudulent and slanderous article on McCain accusing him of cheating on his wife. Funny how once it was proven false there was no retraction or apology by the Times. Ooops.
Let's be honest. Obama is extremely inexperienced and beholden to massive special interests that have no interest in fixing this economy. Trial lawyers, union activists, corrupt judges, and others are "leeches" on an economy that is now on life-support. He has ZERO foreign policy experience. Oh I almost forgot. Joe Biden and HIllary are going to walk him through that one. Yeah right. This guy will be the ultimate "bagholder" victimized by European leaders who want to see us pulled down to their level. And more likley than not bushwhacked by a Putin-led Russia just itching to test Obama's resolve. Too bad that we will find out he has none. This guy is a fraud and charlatan. All talk. No substance whatsoever. We will be paying the price for his inexperience for a long time.

Yank


On Jan 20 09:26 AM Dixie Dawg wrote:

> Completely agree, it seems like every plane I'm on is full to overfull
> (yes, routes & flights have been cut), every mall parking lot
> is, if not completely full, full enough to make a lot of people say
> "what economic downturn?"
>
> Now, this discounts the growing unemployment numbers, mortgage defaults
> and earnings losses, but frankly how else will we ever see a turnaround
> unless consumer spending "comes back". Isn't the only thing we have
> to fear is negative media? Now that Obama is in the White House,
> look for uplifting and positive spin articles from NYT & CNN
> to flood the market, so that people aren't afraid to buy buy buy...
>

False Data Clobbers the Markets

ozzy:
excellent analysis of the article. As you say "cherrypicking" countries with declining population rates and conveniently omitting countries with INCREASING population like China and India is not analysis. It's misinformation. As much as the crtics want to trumpet lower growth rates for both China and India; 9.5% and 8% annual growth still look pretty good compared with US economic growth. More importantly both countries are rapidly industrializing and adopting a "Western" lifestyle. You know what that means? More cars, appliances, infrastructure, etc. I do however agree with the author that there is an incredible amount of manipulation going on right now in the stock markets. With actual physical shortages of gold and silver now how can anyone explain the rationale for a 30% decline in precious metals? The answer: Central Bank short selling.

Yank