bullpasture

The $7 Trillion Rally

What a joke! I didn't know that financial pundits smoked "funny stuff" so early in the morning...... Quick get your resume into CNBC. They need all the help they can get to "pump up" the the happy outlooks since Jim Cramer was so humiliated by the obvious truth.

By the way this statement of yours containing "...stimulus bill passed earlier this year will only retard the economy's recovery, since it boils down to government grabbing a huge amount of the private sector's money..." is inane and shows you are ideologically fixated as a "knee jerk" conservative. Haven't you grasped the fact that the "money" you worry about the government grabbing doesn't yet exist and won't be taken from the private sector in taxes and instead it is created with the Fed's "Quantitative Easing" after the treasury prints up some more treasury bills and notes to be purchased by them.

Good grief (says Charlie Brown). Get a life!

Six Energy ADRs with Attractive Yields

David H.

Nice quick review you provided here.

A piece of advice though. Generally, Canadian company stock sold on the NYSE in the US is not an ADR but rather the real thing. The difference is that the dividends are reported in C$ and payment to US owners uses the currency conversion rate at time of payment. This provides an additional opportunity to plan for growth gains by anticipating the future currency directions. For example, TRP is the US NYSE listing for TransCanada while it is traded in Canada on the Toronto exchange as TRP-T (or as referenced on the Yahoo finance site as TRP.TO). The general price difference between these two listings is essentially the currency conversion factor. For example, TRP-T closed yesterday at C$30.00 and TRP closed at US$ 24.34 with a computed 0.81 factor of CAD/USD. If you examine Yahoo CADUSD=X conversion quote page and Intraday charting, you will see that the Canadian Dollar closed yesterday with a value of 0.8088 US$. Starting in 2002 until the end of October 2007, the US$ decreased in value against the CAD$. Thus if you plot Canadian stocks (e.g. TRP.TO to TRP or SU.TO to SU) during this period, you will see that the US shares had price appreciation at a greater "rate" than the Canadian exchange shares as our dollar fell in value. Likewise, starting around July 2008 when the US$ began its strengthening run, the Canadian dollar lost value rapidly compared to the US dollar. That's why Canadian stocks bought off the NYSE, such as their popular energy and mining shares, lost value so steeply in the "waterfall" crash last autumn.

What's neat now is that a currency "play" can be had in addition to market growth appreciation when purchasing Canadian company stock. Right now the Canadian dollar will buy "only" about US$0.80. But if you believe that our future US economy will see the US dollar depreciate due to inflation induced with the massive deficits and the Fed pumping money recklessly into the market, while the exchange rate approaches parity again with the stronger Canadian economy, you can get an additional 20% gain in your US exchange stock price over the actual market gain (and perhaps even more if the Canadian dollar shoots past parity)!!! So you should now buy US shares of Canadian companies as a hedge aginst the inevitable inflation we will experience.......

Six Energy ADRs with Attractive Yields

Michael,
Statoilhydro has already announced the board of directors recommended dividend payment which must be ratified by the general stockholders meeting on May 19, 2009. It was contained in their website 2/17/2009 announcement of 4th quarter 2008 results and preliminary annual 2008 report. A regular dividend of 4.40 Norwegian Krones (NOK) per share AND a special supplemental dividend of an additional 2.85 NOK for a total of 7.25 Krone to be paid on May 30, 2009 (ex-dividend 5/20/2009). Using yesterday's closing price of $17.51 the current conversion factor would provide a US$ dividend of $1.0881 for a 6.214% share rate. Not Bad for a stock that should appreciate significantly in the years ahead. Last year the regular dividend was 4.20 NOK with a special supplement of 4.30 for a total of 8.50 NOK. Of course last year the stock had a much higher price in May and thus the dividend actually was smaller than this years proposed one..........


On Apr 09 07:50 AM Michael Fitzsimmons wrote:

> statoil's past dividend, and their website actually says this, that
> the target 45-50% of net income on dividends and share repurchases.
> since the first half of 2008 was a bonanza for statoil, and since
> natural gas prices in europe are higher than in the US, plus the
> russian nat gas scare (again), i think statoil's dividend announcement
> in may will surprise people to the upside. statoil anywhere under
> $20 is a bargain.

Stick with Gold and the Oil Stocks

Hey! Your snide sarcasm is showing........... as it should, and I agree with you totally. Nice summary of this mess that the CNBC "personalities " (sorry I can't call them financial gurus because they are only capable of seeing their reflection in a mirror) AND "wanna be rich" watchers seem to pretend didn't happen due to lax regulation and greed.

Couple of points I'd like to add to your suggestions:
First, CNG conversion kits ARE available right now for only a couple of thousand dollars and can be installed by a "shade tree" mechanic to your existing car. If your home is supplied with natural gas for utilities, you can even set up for a small cost your very own CNG private "pumping station" for refueling. Go to Google and enter CNG and you'll find a wealth of info. The "show stopper" problem is that in the United States we have EPA regulations that do not allow any modifications to an existing engine pollution control components (including and especially the control computer chip) and massive fines are levied against owner and mechanic if caught. It's a shame these laws can't be amended for a CNG conversion because pollution is actually reduced! So retrofit conversions have a political road block and not a technical, marketing, or cost issue.

Second, I agree that oil companies will be a reliable wildly appreciating equity. However, I would shy away from the big integrateds (both domestic, e.g. XOM, CVX, etc. and foreign, e.g. TOT, Shell, etc.) and US based oil producers (e.g. OXY, APA, APC, etc.) because in this country any refiner and/or retail distributor (and possibly US sourced suppliers) of fossile fuels will be taxed severly by environmentally blackmailed politicians. I believe the safest bet is to own the big Canadian oil producers (e.g. CNQ, SU, NXY, and TLM). After all, their oil sands reserves are said to match the original size of the Saudi oil discovery. Right now we are their largest customer and the oil comes directly to us via pipelines (thus making a mockery of the political flag waving against "foreign oil"). If the Obama administration limits "oil sands sourced" oil imports due to carbon emmissions concerns, then Canada will simply add more pipelines directed to their Pacific coast and sell it to China. The additional advantage in owning Canadian oil companies is due to currency issues. When you buy shares in a Canadian oil producer, even though you buy in Dollars from American exchanges, those are actual real shares of stock (not ADRs as is the case for most all other foreign equities) in US dollars. If you believe that in the future our American dollar will eventually depreciate especially against the commodity based Canadian economy and its dollar, the you get an extra "kicker" in equity valuation as the dollar declines. Since the Canadian shares and their US shares are the same, go graph any of these oil producer stock prices for the same company on a Yahoo chart (it will work, e.g. SU and Canadian SU.TO plotted simultaneously) along with the currency exchange rate CADUSD=X). You will see almost 100% correlation between these stock prices and changes in the foreign exchange rates match almost perfectly with the exaggerated changes occuring between the prices of Canadian and US stock share prices. Thus you can see the Canadian Dollar was the strongest at May 20, 2008 simultaneousl with the stock price (it had been getting stronger against the dollar for several years and the US stock prices showed it by increasing faster in prices than their Canadian counterparts). When the oil producer equity market started its decline after May 2008, you'll notice that by June when the US dollar started its strengthening, the price of US based shares of Canadian oil producers declined FASTER. We are at the bottom now and as the dollar will eventually depreciate due to both inflation and weakening relative economies, the US priced Canadian stock shares will eventually zoom up with an additional "kicker" added! Thus you can keep your US dollars and have them grown as if you played the foreign exchange market simultaneously as a side bet.

Gold Bulls Should Stay Away from Gold Stocks

Very informative...... One of the most straightforward artcles I've seen on the topic of physical gold v. miner. Now all the loosely correlated relationships makes sense to me .

The End of Gold, Part Two

The author of this article provides an alternative view that should be considered by all the Goldbugs (myself included!). I believe Bailey's premise (deflation) should be carefully considered as the reason that gold hasn't gone hyperbolic as everyone thought it should this fall when the dollar was expected to collapse. Frankly, the future really is unpredictable as there as way too many variables involved for someone to actually predict outcome. The best we can do is recognize, as the author does, that we live in interesting times. We probably are at a "cusp" that can go either way for gold in the USA while the rest of the world will experience (in their respective currencies) the massive bull market for gold as a secure store of value. The American economy is so large and vast relative to the rest of the world (including Europe and China) that any deflationary collapse in pricing assets might overwhelm anything the Fed can accomplish with a printing press and issurance of treasuries. I myself have most of my investments stored in physical gold yet I'm not sure that while living in the USA it will make me wealthier in the future. The best I can hope for is to preserve some manner of buying power. Perhaps if I chose to emigrate to another country dragging my gold with me I could experience a sense of real wealth increase in the future.

Btw, I really liked the comments that Mr Freddo made and perhaps the best understanding we can obtain from the paradox that gold seems to exist simultaneously in both a bull and a bear market is his comment that "In time of crisis, gold may be the best investment for the individual but the worst investment for the economy".

The Most Important Fact To Know About Oil Investing

Thanks for your lucid and brutally honest assessment of this particular market. Your comments make a lot more sense than all the "self appointed" gurus who spout their "wisdom" via posts on this site. But is is not just oil that your comments apply to! Your assessment pretty much applies to much of the equity market since there is so much leverage and quant trading that now takes place and the small retail trader (or investor) is pretty much simply gambling at this point but without the benefit of knowing what cards have already been dealt.

Even the legendary Boone Pickens really can't predict this market but at least he is big enough (and humble) to admit when he made a mistake as in his call this spring.

Good show!

Occidental Petroleum's Oil Properties Provide Great Value for Investors

Heads up for jjason: The brief articles posted at SA by this author are merely summary capsules of information that have been extracted from his informative weekly bulletins available in pdf format at his web site. Go to mcdep.com (as tagged above for the "author's website") where you can find an amazing collection of research going back for many years. Any particular energy stock he mentions for SA publication, has a complete report available for free and it generally has been analyzed several times a year.

Penn West Energy: More Questions Than Answers

I have really enjoyed following the forum discussions on PWE made by both Jack Yetiv and Dave Bui along with all the comments made by various readers. It has been most enlightening to discover the different ways to approach both the analysis and emotional preference criteria used for decision making. I had seriously considered investing in PWE (and at one time had a small position) but recently I have chosen to place all my royalty income investment in Enerplus Resources (ERF). I do not have the skills to critically assess all the financial data available for these two organizations. But I have tended to acccept David's argument that for some reason, PWE executives are somewhat evasive in providing clear strategic goals, identifying reserve replacement, and "dancing" around accounting numbers. Part of the reason I was initially focused on PWE was the prominent attention that Kurt Wulff gives it at his McDep.com web site over the years. He has strangely been silence with regards to ERF yet he has been providing data on this particular canroy for many years. I have followed the data for ERF on his site and compared it to both PGH and PWE that he has provided over the years. As a result, ERF looks extremely consistent and when I read in detail the material they provide on their web site and all released performance and presentation material with their considerable explanations, I simply felt that over the long haul, ERF makes a better case for future commitment to high income generation no matter what the future tax situation brings.

As an additional note of interest, TheStreet.Com rating website provides a ranking grade for the 7 canroys currently traded on American stock exchanges as ADRs. They recently acquired the Weiss Group who has a fine reputation for evaluation of stocks and banks, etc. using accounting information. As a result it was interesting to see that ERF carried the grade of B-, the highest of all 7 canroys, while PWE caried the grade of D+ with a sell recommendation! FYI, the remaining 5 canroys were rated as: BTE C-, AAV D, HTE D, PVX C, and PGH C........................ Hope this dialog keeps going and I would like to hear what both Jack and Dave think about ERF.