fatpitch2

STEC's Massive Selloff: It All Hinges on EMC

proactive:

Are you seeing insiders buys at current prices?
I am not seeing that, but my information feeds may be slower than yours.....

I see no real activity since Masoud unloaded several MILLION shares back in early August.

Three Asset Classes that Can Actually Outpace Coming Inflationary Price Increases

Nice article, thanks.

I'm just going to toss out some random stuff here:

1) Indeed returns on gold do not seem to be well correlated with inflation but perhaps more correlated to periods of "unrest". So even without inflation on the horizon gold is not a bad place to park some cash?

2) Inflation vs. Deflation ... can't we have BOTH?
It seems to me it's not as simple as one or the other...
Certainly some assets/classes will be suffering "deflation" for years to come ... residential and commercial RE seem to have large inventories to work off for example. On the other hand it seems we could be in for shortages of ag. commodities, energy, and other "hard" assets. The stuff that the BRIC needs to build out their countries?

3) oil being held off the market - well I guess that could be the case, but a VLCC holds about 2M bbls, and with worldwide consumption at 80M+ bbls/day could there BE enough tankers willing to sit at anchor to really make a big difference???

Axion Power: Time Is Right for Gas Guzzlers to Dual Mode EV Conversions

John thanks again!

I bought Axion @ about $0.95 and at least at this point... wish I'd bought more... ;-)

Anyway... my comment:

Currently, as I understand it, there is no commercially feasable recycling method available for Li-base batteries, while there is recycling available for lead-based batteries.

I did not see a line item in your estimate for the scrap value of the 2 (3?) sets of spent lead-based battery packs... is there any scrap value, or does the cost of handling pretty much offset any residual value?

Thanks!

Has Crude Turned the Corner?

Don't forget the "supply" side....
Depletion rates are even by conservative estimates 5% or better ...
(Cantarel is dropping by double-digit rates) that's good for cutting production by at least 4M bbl/day off every year...

and it doesn't take a rocket scientist to figure out that with current low prices that capex spending is way down so new sources are not being found and new wells are not getting drilled. Stripper wells are shutting down. All of this activity takes a while to circle around to impact supply due to long lag times ... if may be interesting when we figure it out....

Don't forget that a lot of the oil stored in super tankers and other places is by design - taking advantage of the strong contango pricing of oil... buy now for $35/bbl hold it for 6-month sell it for $65/bbl even after carrying costs... what's not to like?

When Will the Oil Price Pop?

Jim:

Thanks for this review!

I have a couple of random comments:

1) My personal suspicion is that a 4.5% depletion rate is optimistically low. I suspect the current rate is perhaps 5% - 6% and that it will rise in the coming years. Cantarell is, for example, depleting at double-digit rates.

2) Nuclear energy could do a lot for us; but we gotta get moving. I attended a presentation last night by Duke power, Areva, and several other US players in the nuclear field and the time line for building a nuclear plant is as follows: 6 YEARS of paperwork (environmental impact, public comment, NRC, ....) then 6 years to actually build the plant.

3) Nuclear and most alternative energy sources, as we all know do not produce liquid fuels, a real bummer in our current world of liquid fueled transportation.

4) Even if wind and solar COULD become major contributors, and I am skeptical .... we will need additional technology behind these producers to "smooth" out fluctuations in supply -- the winds stops blowing, it is a cloudy rainy day, .....

It's a huge mess ... and I am long energy

Oil: Despite Decline, A 'Must-Have' Profit Play

Demand is one thing... don't forget SUPPLY issues

Demand may be off slightly as a result of the current economic crisis but the emerging world does not all have to buy cars to boost demand ... just imaging say 5% of India and China's population buying an extra gallon of gasoline per week to put in their Moped? In the USA there is 1 car PER PERSON, in China there are roughly 3 cars per 100 people... lots of room to grow.

Now... how about SUPPLY?
I do not believe you will find any reputable source that will tell you that the depletion rate from current oil fields is less than 5%. Many geologists believe it is closer to 9%. Mexico's Canterell field is depleting at double-digit rates. So we have to add say 5M bbl/day just to keep even? With prices < $40/bbl do you think this is happening? I do NOT....

deep water projects are cancelled, oil sands CapEx is being slashed, stripper wells are being capped.... etc.................

When it turns around and as Keith says ... the date is not clear... but when it does... it will get FUGLY fast...

Just my humble opionion.

Asset Class Rotation: A Simple System

Mebane:

I just came back from the MoneyShow in Orlando and spent some time with FundX people. Overall, I was impressed, but as SteveTN asserts, the FundX family (except for a new offering they have just come out with: TACTX they do not do any "tactical" or market timing.

I was much impressed with your article a few months back: "The global tactical approach" I'm sure you have considered the paring of rotation with tactical allocation; what are the results?

Do any of the funds you've listed do something like this?

Thanks!

Does Wealth Equal Money?

Jim:

Any thoughts on the "net" effect on interest rates for LT treasuries?

I do agree that we have vaporized far more "virtual" dollars than the puny stimulus levels can (currently) overcome... but I do expect our government to keep trying harder and harder....

Here we are at what... ~2.25% which is what a 200 year low, and implies that buyers do not expect any inflationary pressures for 10+ years?

This in a bond environment where the government is ever rolling over existing debt and piling on new debt at a rate in excess of $1T+ per year for the next several years?

Thanks!
Jim

What Was Good About Boom-Era 'Lazy' Portfolios

Here is the review of Farrell's lazy options:

www.marketwatch.com/la...

3 year returns are all negative, 5 year returns are at best about neutral.

2 Geothermal Heat Pump Stocks to Consider

Chris B:
Sorry for the delay, I wish SA had a way for me to get notified when one of my comments was replied to ;-/

That price is from a good friend of mine who is in the residential and commerical business for HVAC.

Due to lack of large open spaces, in my area the ground loop is installed vertically in what amounts to a well shaft similar to a water-well with a loop of tubing in it. one well shaft is required for each ton or so of capacity - in my case 3.5 tons meant 3 well shafts @ 6K+ each for drilling, sleeves, tubing, ..... etc... very disappointing.

If I lived near a pond or if I could use the horiziontal approach it would be less for sure, I do not know by how much.......

On Dec 22 11:39 AM Chris B wrote:

> fatpitch2,
>
> $20k to dig a hole and install some tubing in the back yard? That
> seems kind of high to me. You could rent a backhoe yourself for
> a couple hundred a day! Sounds like you either have no space to
> work with or live on extremely rocky soil. If not, I'd suggest another
> estimate. Sometimes, a highball quote is a contractor's way of saying
> no thanks to a too-small job.
>
> Where I live there are dozens of subdivisions popping up in rockless,
> flat beanfields. Each house has the minimum insulation required
> by code and the cheapest HVAC system available. That's because most
> buyers are more interested in the paint and tile colors than the
> long term cost of operation. If those buyers would wise up, the
> builders would offer what they want. Likewise, if building codes
> improve, expect geotherm to get a look in such applications. That
> might not happen soon, but you can't go wrong investing in already
> profitable companies that have that possible upside.

Oil Futures Market: Unwinding the Bubble

Jimmy46:

I understand your point, and it is well taken, I appreciate it.
Two questions for you if you have time:

1) Clearly the "cash cost" of production varies considerably depending on the source; I would think that the middle east has the lowest cash costs while the Canadian oil sands might have some of the highest....???

Do you have any data on the cash costs for major producers?

2) If I were a producer and had cash cost less than current market price I would throttle production to the bare minimum that was required to cover my expenses and leave the rest in the ground for a better day and a higher price. Perhaps there are few producers with this much leeway, and they are all producing as much as they can in an attempt to cover expenses... ???
On the other hand, some producers having higher variable costs of production (oil sands?) might be able to more easily throttle production and still remain viable. Are there enough producers (any?) in the category to make a difference?

Thanks!





On Dec 29 05:39 PM jimmy46 wrote:

> Why does oil keep going down? Surely, at under $40, marginal producers
> should just stop production and wait until price is good enough for
> them.""&amp;quot.....
>
> For some of the recent deep water projects, the TOTAL COST OF PRODUCTION
> may be $70 or more.
>
> But, most of that cost is upfront drilling for the oil,
> once production starts the CASH COST OF PRODUCTION is probably no
> higher than for shallow water oil.
>
> CASH COST is what drives the extraction industry in the short term,
>
> TOTAL COST is only used for deciding whether to START a new project.
>
>
> RESULT: NO ONE IS GOING TO HOLD PRODUCTION DOWN TILL PRICES GO HIGHER.
>

2 Geothermal Heat Pump Stocks to Consider

Tom:
WFI & also on installing a ground loop heat pump at my house.
I was dismayed to learn that the cost of a ground loop system would be more than 3X that of the simple air-to-air system. The cost of creating the ground loop in my case (vertical well shafts) would add $20K+ to the system cost (for 3.5 ton unit). I live in typical suburbia so some of the other ground loop creation options are not available to me - trenching is not an option and I have no handy body of water to use either.... I live in the mid-atlantic and concluded that without some serious subsities the ROI was not going to close. In less temperate climates I do think they are a great idea.

Here is another interesting concept, have you hear of it?

Claim is 30% better efficiency, cheaper, and the working fluid is water
no special freon type gasses involved....

Even if only half true, still pretty good ????

blogs.zdnet.com/green/...

Your thoughts appreciated....

What Was Good About Boom-Era 'Lazy' Portfolios

Larry:
Yes, being "lazy" has not been good... of course being "anything" but in cash or gold for the calendar year 2008 has not been so hot ... as of about a week ago I read that gold was the only asset showing net positive return YTD.

No matter, in general being lazy (in the correct way) removes emotion and frees up time for important stuff like ... oh ... like having a life.

Based on your research can you recommend any semi-lazy portfolios?

I'm trying help build one for a young friend just leaving college with a small inherited nest egg, and as a younger boomer am trying to make my own portfolio lazier as well ;-)

Hedge Fund Redemptions May Crash Q1 Markets

I guess I wonder what is left to redeem?

Tudor Investment Group had $5.7 billion invested at June 30 as disclosed in its 13-F. Its September 30 filing shows only $453 million.

Atticus Capital, another much-celebrated hedge fund, went from $8.1 billion to $510 million.

SAC Capital, run by the Steven Cohen, went from $14.4 billion to $7.7 billion.

Vinik Asset Management, led by Jeffrey Vinik, who once ran Fidelity Magellan, went from $11.8 billion to $1.8 billion!

These numbers are as of September 30. So they do not include the awful months of October or November, so current assets at these funds would be even lower now, but if you are already down 90% .... who cares?

The reduction is of course the combination of selling to meet redemption requests, and a decline in market value of existing positions, if these funds are anywhere close to "typical" I have to conclude that downward pressure on the market on a go-forward basis has got to be minimal as ... well as they are all pretty much out of money....?

Bye Bye Greenback

I am current shareholder of both the Prudent Global Income Fund (PSFAX) and the BEARX fund. While the income fund has not done amazingly well it has held up in "relative terms". BEARX on the other hand I am pleased with....

Unfortunately the take over by Federated Investments results in the funds now becoming front-end load funds which is very disappointing for folks that are not current shareholders -- current no-load shareholders as of date of conversion are grandfathered into the no-load shares even for additional purchases ... at least as I understand it.