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Lake Investor

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  • Environmental Decision: Natural Gas Transportation Or Keystone-XL? [View article]

    You sound like an environmentalist who doesn't like oil. The more options available to users of energy (consumers, industry, etc.) the more stable their operating costs will be. It will also make it likely that businesses will invest in chemical and refining businesses--which produce good paying jobs and which lamentably are being shipped to other countries because we don't support them.

    We should deep six ethanol. If we're going to have government subsidies, they should be for LNG or CNG transportation alternatives to bring down the cost differential between gas and gasoline vehicles. We should do everything we can to insulate ourselves from business dealings with tinpot dictators in Venezuela, middle east, Brazil, etc.
    Apr 15, 2013. 07:53 PM | 3 Likes Like |Link to Comment
  • Apple Should Pay Its Tax Bill [View article]
    Do you own apple shares?
    Apr 15, 2013. 04:23 PM | Likes Like |Link to Comment
  • Apple Should Pay Its Tax Bill [View article]
    High US corporate taxes hurt out ability to attract the next plants and fabs. If they have to build another Foxconn plant they will use the foreign cash reserves.

    A lot of smart execs (all the CEOs of successful drug, biotech and tech companies) tend to hold a lot of cash overseas. It's like our tax policies were written by the Irish, Chinese and Puerto Ricans who get a lot of the good jobs we chase away.
    Apr 15, 2013. 04:20 PM | Likes Like |Link to Comment
  • Apple Should Pay Its Tax Bill [View article]
    I agree with you that they should take shareholder friendly actions like dividend increases and share buybacks. I disagree on paying the tax. Apple has good company with most successful multinational companies holding more cash overseas. That is the direct result of the wrongheaded tax policy that attempts to tax worldwide income for entities headquartered in the U.S. Apple and other multinationals can afford to take the long view and wait for political change. I back management's current decision to park the money overseas.

    If Obama were smart, he'd get on with his legacy building. He needs a strong recovery. A lower repatriation tax would both raise a lot of revenue in the short run and set off a wave of investment that would kick start the job market. He's not smart enough to do that however.
    Apr 15, 2013. 04:15 PM | Likes Like |Link to Comment
  • Petrobras' (PBR) worst debt situation in a decade may be boosting the chances it will step aside and let Exxon (XOM) and Shell (RDS.A) buy offshore exploration licenses in Brazil's upcoming first-in-six-months auction, Bloomberg says. XOM is said to have been the most active in requesting data about the acreage Brazil is offering next month to take advantage of PBR holding back. [View news story]
    Tread carefully. Brazil tried to levy a fine in the tens of billions of dollars against Chevron for a 2,000 barrel leak. One little mishap and they own you. I would do everything through a subsidiary if you are going to invest in Brazil. I would also extract concessions in the contract to prevent the crazy regulator actions. There are a lot of places wanting big investments in oil right now from Russia, Iraq, Mexico, Brazil and Africa. Get assurances and contracts that you can enforce in international tribunals.
    Apr 12, 2013. 06:44 PM | 6 Likes Like |Link to Comment
  • Reasons To Buy JPMorgan At Its Current Valuation [View article]
    I had a few shares when the London Whale debacle hit that I had held for years. When the market cap dropped over $50 Billion on a projected loss of $2 Billion (which grew to $5 Billion) I quadrupled down. I sold about 2/3 of my position at $50.66 but maintain a large position. I love those kinds of opportunities. I didn't really lighten up on banks but diversified into WFC, RY and HBC. There's been good news since I sold (dividend increase and buyback) and a slight price decline so I might be tempted back in for a larger position.

    Still, 2008 and 2009 are in the back of my mind and they were brutal for financials. I'm a little underweight the sector, partly out of concern for political risks. Thanks for the article Jeroen.
    Apr 11, 2013. 01:44 PM | Likes Like |Link to Comment
  • Exxon Mobil (XOM) and Mexico’s state-controlled oil giant Pemex reach a deal to collaborate in research, science, technology and human resources training for the exploration, drilling, production, transportation and storage; the agreement does not involve paid services. Pemex seeks to modernize, as its crude output has been dropping steadily for years. [View news story]
    Something is missing from this blurb. Why would Exxon need to do a deal with Pemex to collaborate on science and technology? Exxon has to be light years ahead. I presume that Exxon got something from this deal like certain offshore lease rights held by Pemex? Otherwise why do it?
    Apr 3, 2013. 04:55 PM | 2 Likes Like |Link to Comment
  • Exxon's Stock Buyback Is Good, But One Caveat [View article]
    The tax savings from step-up in basis at death is real but does no good to the decedent. He can't spend money when he's dead. Everyone needs spendable cash while they're alive.

    Assuming people will need money in retirement at some point, the "tax difference is minimal for long term investors."

    For quite a few years long term capital gains rates have approximated rates payable on dividends. Sure some people hold money in IRAs and 401k's but for taxable accounts the difference is negligible.
    Mar 28, 2013. 02:01 PM | Likes Like |Link to Comment
  • Exxon's Stock Buyback Is Good, But One Caveat [View article]
    I am surprised by the black and white attitudes of everyone on both sides of the buyback vs dividend argument. Both are good and return money to shareholders. Tax difference is minimal for long term investors.

    Both actions are preferable to unwise spending on diversification. To the extent they focus management they are both desirable.

    Stocks that pay good (and growing dividends) as well as stocks that regularly reduce float through buybacks are attractive to me.
    Mar 28, 2013. 12:29 PM | Likes Like |Link to Comment
  • Exxon's Stock Buyback Is Good, But One Caveat [View article]
    I'll grant you that. The underperformance in that period may be attributable to the XTO deal. No way to spin that one. It was a miss.
    Mar 27, 2013. 03:27 PM | Likes Like |Link to Comment
  • Exxon's Stock Buyback Is Good, But One Caveat [View article]
    I'm not sure how that policy slants in favor of management at the expense of shareholders. Both the buybacks and the steadily growing dividend favor shareholders. No company in the history of the world has ever come close to giving so much money to their shareholders. Look at the long-term chart (40 years) and you can see what the buyback has done for you. I'm going to keep my shares.
    Mar 27, 2013. 03:26 PM | Likes Like |Link to Comment
  • Exxon's Stock Buyback Is Good, But One Caveat [View article]
    That was a bubble price when crude went to over $150. Look at their long term chart from 1970 to present. They've managed well through crude shortages and gluts. Beats getting .1% in a cd. Hedged with real assets and a company that returns 8-9% per year to shareholders.
    Mar 26, 2013. 06:53 PM | 4 Likes Like |Link to Comment
  • Exxon's Stock Buyback Is Good, But One Caveat [View article]
    That is true of many companies but not Exxon. The most shareholder friendly company in the world. Too many let cash burn a whole in their pockets and they make stupid acquisitions.

    XOM has shown discipline in buybacks which have resulted in major decreases in the float--not more awards to execs. They are not like tech companies who hand out stock too freely to employees.

    They miss on some investments. XTO was not well timed given the gas glut. However, their size, scale and expertise let's them get in on a lot of great deals. They are a preferred partner in the Russian Arctic. They hedge against nationalization risk there by requiring Rosneft to invest in their North American deals (giving them an offset if they get worked over). They seem to be walking a fine line in Iraq and despite some early indignation from the Iraqi government may end up with deals with the Kurds and Iraq (and maybe an improved Iraq deal).

    Most important they understand the money belongs to shareholders.
    Mar 26, 2013. 06:51 PM | 5 Likes Like |Link to Comment
  • When Searching For Dividend Growth Look For Share Count Reduction [View article]
    Oracle and Intel are also big purchasers of their own stock. BP announced a big buy back today also. I bet Larry Ellison will take advantage of yesterday's pullback. Stock lost something like 10% of its market cap in two days after missing on revenue (not earnings) by a per cent. Ellison bought back $10 billion last year and this fall will allow him to retire more shares at a great price and allow further eps increases.
    Mar 22, 2013. 06:16 PM | Likes Like |Link to Comment
  • Google's Battle With Samsung Will Reshape The Smart-Phone Market [View article]
    so how do you feel about DOD dumping BB for Apple products as was announced yesterday
    Mar 21, 2013. 12:08 PM | Likes Like |Link to Comment