AEP: The Good, The Bad, Or The Dirty? [View article]
99.5% of fracking fluid consists of water and sand (most of which is recycled many times over). But most environmentalists conveniently gloss over this fact. Less than 1% of fracking fluids is rust inhibitors and other chemicals.
AEP: The Good, The Bad, Or The Dirty? [View article]
Fitz, nice to see a new article from you.
Agree 100% with you on EVs and the problems you highlighted. EVs are simply being used as a public relations vehicle (pun intended) to show that utilities are on the forefront of the green revolution. Reality is that most utilities have only 10% spare capacity for new users on the grid. This translates to being able displace only a small percentage (not more than 20% in most cases) of the current gasoline powered fleet with EVs.
The problem with going to natural gas is the strong lobby groups that are against fracking. Neither Obama nor Romney wants to near fracking during or even after an election campaign. The cost of replacing coal with natural gas would easily be recovered just in the elimination of the expense of scrubbing and disposing of toxic emissions from coal fired plants. Natural gas fired CO2 emissions can be vented directly or directed to algae ponds (bio-diesel) for complete elimination.
While COP is good company to invest in, I do believe XOM and CVX are much better, purely from their long business stratifies. All three are well positioned for the next energy transition (i.e. unconventional natural gas). But only XOM and CVX have a "beyond petroleum" long term plan in place with biodiesel and biotunal, COP has no alternative such investments in place.
Perfect Retirement Investing Is The Enemy Of Good Retirement Investing [View article]
I definitely agree with your choices of XOM, JNJ, PEP and PG as good investments for retirement.
My personal strategy for choosing stocks share the three following characteristics:
1) Stood the test of test (100+ yr companies are good candidates) Usually boring stocks that grandmothers would invest in (a la Peter Lynch) 2) Dividend paying 3) Sustainable growth (good recovery from economic events)
XOM, CVX, COP, JNJ, PG, KO, PEP and IBM would pass all these criteria.
Companies like T, VZ and GE meet 1 and 2, but are still trading at 50% or less of their value in the year 2000 .
I would avoid completely companies like AAPL, GOOG and AMZN that don't pay dividends and have grown at unsustainable rates. When a company is paying 20-60% of its earnings in dividends, it usually has discipline in the way it invests shareholder money. Non-dividend payers like GOOG tend to use a shotgun approach to investing in new projects and as a result tend to have a 1 in 10 success rate for new projects (e.g. 4 failed attempts to dethrone Facebook)
Oil And Gas Dividends For The Fixed-Income Investor [View article]
When the RIG dividend was announced in mid-2010, I believe it was supposed to be only 4 x payments starting in June 2011 with the last payment made in March 2012. If they suspend the dividend in June 2012, I can see the stock taking a hit with the money going to drillers that are paying good dividends like DO and SDRL.
Making A Case For Special Dividends [View article]
Excellent article !
Many people doing a superficial scan for dividend paying stocks will often overlook Diamond Offshore, since most sites only state the fixed dividend. In the case of DO, it appears that it only pays 0.7%, when in reality it pays a minimum of 4.5% when the special is factored in
Is Exxon Mobil About To Waste $600 Million On Algae Research? [View article]
There is a good reason why Exxon-Mobil has been around since the 1870's; they have a long term view with their investments and business strategy. They have investments spanning all time horizons; short term - conventional oil exploration & production, medium term- unconventional natural gas (i.e. XTO) and long term-biofuels (i.e. algae and other renewables).
Contrast this with many modern day companies like Google (with lots of money, but no long term vision). Their shotgun approach to investing results in ten failures (e.g. four attempts so far trying usurp Facebook ) to every success story (e.g. Android). The more focused Apple and Microsoft will probably be around in 20 years, but I would not bet on Google.
Exxon-Mobil will certainly be around 50 or 100 yrs from now, not in the oil business, but in the energy business.
I would avoid PBR like the plague. Any oil company (PBR, PTR STO, etc) that is majority owned by a government will always be used as a political tool to gain votes at the expense of foreign minority shareholders. PBR does not seem to be concerned with profitability, but rather being a job creation vehicle for Brazil. The extortion of CVX and RIG is clearly politically motivated and will result in PBR losing valuable expertise in the long run when CVX and RIG go elsewhere with their investments.
This blurb from a Reuters article summarizes it well: "The oil company's preferred shares had slumped 27 percent since the start of 2010, partly because of concerns that Petrobras' plans to expand in labor-intensive but less-profitable areas such as refineries were designed to satisfy Lula's political objectives instead of minority shareholders."
My impression was similar to that of many posters that PBR did not own deep sea rigs, but only leased them. But according to the Rig Zone, PBR does in fact own 14 (albeit old ones ) of its own rigs.
But the link also shows that PBR is very dependent on many rigs provided by Transocean and Diamond Offshore.
PBR is government owned and its main priority to serve the political motives of its leaders, not its shareholders. Long term I would go prefer to go with RIG and DO.
StatOil Is A Trifecta Of Value, Income And Growth Potential [View article]
If you like Norwegian owned companies, you are better off with Seadrill. It is majority owned by Norwegian John Fredriksen and based in Bermuda. SDRL pays a generous 8.8% dividend. It has the newest fleet of deep sea drill rigs (giving it an advantage over DO, RIG and other established players).
I used to own STO and found it to be a real laggard compared to its European cousins RDS, TOT and BP. I am not too crazy about companies majority owned by governments like STO, PTR and PBR.
Great opportunities for expanding US oil supplies domestically exist via non-conventional gas and deep sea oil off US coastal waters.
While concerns about shale gas and deep sea oil spills are legitimate, the solution is tighter environmental regulation, not banning industries outright that could help the US economy recover significantly. CVX, XOM and COP are well placed to benefit from this.
Profiting From Environmentalist Folly [View article]
Environment concerns are very important, but there are many other issues on the table as well.
1) No money sent to Canada to buy oil has ever been used to sponsor terrorists. We cannot say the same for Saudi Arabia that has provided 15 of the 19 9/11 terrorists.
2) Canada is the USA's large trading partner. For every dollar spent on Canadian oil and other products, 80% is returned to the USA through the purchase of USA made goods by Canadians. Less than 1% of money spent on Saudi Arabian oil is returned to the USA.
3) Domestic shale gas and deep oil production certainly could use tighter regulation, but not restrictive regulations. A huge bonanza of high paying jobs in these sectors have been shelved to due overly cautious environmental concerns by the Obama administration.
4) What environmentalists fail to mention is that US coal powered power plants create 80 times more green house gases than the entire oil sands industry in Canada.
What's The Connection Between Gold And Natural Gas? [View article]
Nice to see you back Fitz.
The biggest obstacle to domestic natural gas usage is not government, but environmentalists who prefer to buy oil from sponsors of terrorism rather than permit any domestic NG frac'ing at all.
Domestic unconventional NG production is an industry in its infancy and tighter (but not prohibitive) regulations certainly would be a good idea.
ExxonMobil: Time to Add the Favorite Son of Standard Oil to Your Portfolio [View article]
I rather be invested in oil. I can live the rest of my life without ever needing an ounce of gold, but we would all be back in the stone age without oil. Besides transportation, oil and gas have over one thousand uses: cooking, heating, power generation, plastics, medicines, pesticides, fertilizers, etc, etc, etc.
AEP: The Good, The Bad, Or The Dirty? [View article]
http://bit.ly/M4ph3s
AEP: The Good, The Bad, Or The Dirty? [View article]
Agree 100% with you on EVs and the problems you highlighted. EVs are simply being used as a public relations vehicle (pun intended) to show that utilities are on the forefront of the green revolution. Reality is that most utilities have only 10% spare capacity for new users on the grid. This translates to being able displace only a small percentage (not more than 20% in most cases) of the current gasoline powered fleet with EVs.
The problem with going to natural gas is the strong lobby groups that are against fracking. Neither Obama nor Romney wants to near fracking during or even after an election campaign. The cost of replacing coal with natural gas would easily be recovered just in the elimination of the expense of scrubbing and disposing of toxic emissions from coal fired plants. Natural gas fired CO2 emissions can be vented directly or directed to algae ponds (bio-diesel) for complete elimination.
ExxonMobil Is A Buy - Just Not Yet [View article]
While COP is good company to invest in, I do believe XOM and CVX are much better, purely from their long business stratifies. All three are well positioned for the next energy transition (i.e. unconventional natural gas). But only XOM and CVX have a "beyond petroleum" long term plan in place with biodiesel and biotunal, COP has no alternative such investments in place.
Charlie Munger: Civilized People Don't Buy Gold [View article]
I can live quite happily without ever having any gold, but would be living a medieval existence without oil.
Long: XOM, CVX, COP, BP, TOT, RDS
Perfect Retirement Investing Is The Enemy Of Good Retirement Investing [View article]
My personal strategy for choosing stocks share the three following characteristics:
1) Stood the test of test (100+ yr companies are good candidates) Usually boring stocks that grandmothers would invest in (a la Peter Lynch)
2) Dividend paying
3) Sustainable growth (good recovery from economic events)
XOM, CVX, COP, JNJ, PG, KO, PEP and IBM would pass all these criteria.
Companies like T, VZ and GE meet 1 and 2, but are still trading at 50% or less of their value in the year 2000 .
I would avoid completely companies like AAPL, GOOG and AMZN that don't pay dividends and have grown at unsustainable rates. When a company is paying 20-60% of its earnings in dividends, it usually has discipline in the way it invests shareholder money. Non-dividend payers like GOOG tend to use a shotgun approach to investing in new projects and as a result tend to have a 1 in 10 success rate for new projects (e.g. 4 failed attempts to dethrone Facebook)
Oil And Gas Dividends For The Fixed-Income Investor [View article]
Making A Case For Special Dividends [View article]
Many people doing a superficial scan for dividend paying stocks will often overlook Diamond Offshore, since most sites only state the fixed dividend. In the case of DO, it appears that it only pays 0.7%, when in reality it pays a minimum of 4.5% when the special is factored in
Is Exxon Mobil About To Waste $600 Million On Algae Research? [View article]
Contrast this with many modern day companies like Google (with lots of money, but no long term vision). Their shotgun approach to investing results in ten failures (e.g. four attempts so far trying usurp Facebook ) to every success story (e.g. Android). The more focused Apple and Microsoft will probably be around in 20 years, but I would not bet on Google.
Exxon-Mobil will certainly be around 50 or 100 yrs from now, not in the oil business, but in the energy business.
Beware The Bubble In Brazil [View article]
This blurb from a Reuters article summarizes it well:
"The oil company's preferred shares had slumped 27 percent since the start of 2010, partly because of concerns that Petrobras' plans to expand in labor-intensive but less-profitable areas such as refineries were designed to satisfy Lula's political objectives instead of minority shareholders."
2 Oil Drillers To Buy, 3 To Avoid [View article]
http://bit.ly/xlBICg
But the link also shows that PBR is very dependent on many rigs provided by Transocean and Diamond Offshore.
PBR is government owned and its main priority to serve the political motives of its leaders, not its shareholders. Long term I would go prefer to go with RIG and DO.
StatOil Is A Trifecta Of Value, Income And Growth Potential [View article]
I used to own STO and found it to be a real laggard compared to its European cousins RDS, TOT and BP. I am not too crazy about companies majority owned by governments like STO, PTR and PBR.
The Wildcard For U.S. Oil Supply [View article]
Great opportunities for expanding US oil supplies domestically exist via non-conventional gas and deep sea oil off US coastal waters.
While concerns about shale gas and deep sea oil spills are legitimate, the solution is tighter environmental regulation, not banning industries outright that could help the US economy recover significantly. CVX, XOM and COP are well placed to benefit from this.
Profiting From Environmentalist Folly [View article]
1) No money sent to Canada to buy oil has ever been used to sponsor terrorists. We cannot say the same for Saudi Arabia that has provided 15 of the 19 9/11 terrorists.
2) Canada is the USA's large trading partner. For every dollar spent on Canadian oil and other products, 80% is returned to the USA through the purchase of USA made goods by Canadians. Less than 1% of money spent on Saudi Arabian oil is returned to the USA.
3) Domestic shale gas and deep oil production certainly could use tighter regulation, but not restrictive regulations. A huge bonanza of high paying jobs in these sectors have been shelved to due overly cautious environmental concerns by the Obama administration.
4) What environmentalists fail to mention is that US coal powered power plants create 80 times more green house gases than the entire oil sands industry in Canada.
What's The Connection Between Gold And Natural Gas? [View article]
The biggest obstacle to domestic natural gas usage is not government, but environmentalists who prefer to buy oil from sponsors of terrorism rather than permit any domestic NG frac'ing at all.
Domestic unconventional NG production is an industry in its infancy and tighter (but not prohibitive) regulations certainly would be a good idea.
ExxonMobil: Time to Add the Favorite Son of Standard Oil to Your Portfolio [View article]