epeon's Comments

Barron's on ExxonMobil: 'What a Gusher'

Mon, 16 Nov 2009 09:17:23 -0500

I have liked big oil for some time. I have heard it stated that it takes $1 Trillion per year in investment just so that the world oil capacity remains constant. We have not been spending that money. So, I think depletion will continue to maximize oil's value over the next few years. Alternative energy is insignificant. It is just this year's ethanol. I have, however, preferred BP because of the dividend. I don't know when the next oil spike is coming, but I would rather be collecting a 6% dividend while I wait.

Senator Schumer Misses the Full Picture on A-Power's Joint Texas Wind Farm

Sun, 15 Nov 2009 19:37:55 -0500

Please document your statements. In California, the public utilities are buying back windpower generating electricity for $.18/kwhr. I also went and checked the Denmark power, too. The cost is $.18/kwhr. So, please, document to me some where the non-subsidized and fully amortised (i.e. no govenment funding) cost of windpower is $.04 to $.06/kwhr.

On Nov 06 10:48 AM jerrydd wrote:

> Ferdinand E,
>
> Sweden could have all hydro and tidal at far lower cost that nuke.
>
>
> In Denmark they are below sea level in much of the country so rather
> hard to have hydro. And their high electric cost is from taxes, not
> from wind. So learn a little before spouting off.
>
> Also most Denmark windgens are owned by the community thus make good
> money from them.
>
> In the US wind is about $.04-.06/kwhr for big wind, similar to coal
> and far cheaper than new nuke. Home size wind can be far less since
> you can now buy one for $1.5k/kw including inverter.
>
> Since they last 50 yrs and pay back in 2-5 yrs, home wind in suitable
> sites which 50% of US are, they are by far the lowest energy cost.
> If one doesn't have a good site they can buy a share in a large one,
> switch to PV which is dropping in price fast. At under $2/wt-2k/kw
> they are competitive. Now you can buy them for $2.38/wt retail so
> that time is coming soon.
>
> Facts are even with the huge subsidies oil, coal and nuke get, RE
> is about as cost effective and getting cheaper. Fossil fuels, nuke
> is getting more expensive. Which is a better investment? What will
> happen when one of those Chinese, other nukes meltdown?

Opportunities in the Wind Energy Value Chain

Wed, 11 Nov 2009 10:33:14 -0500

this generation's ethanol

Amazon and Barnes & Noble: A Tale of Two Booksellers

Mon, 09 Nov 2009 09:29:00 -0500

I have been thinking about this, too. AMZN is so highly valued that I see no way it can deliver a reasonable return to the investor. BKS, on the other hand, pays a reasonable dividend, has the cashflow to maintain it, and you can write covered calls against and make reasonable money. I kind of like BKS.

U.S. Handling of Financial Crisis - A Less Optimistic View

Sun, 08 Nov 2009 03:13:04 -0500

I must admit that I am very disappointed by Obama. Since the US government owns several banks what I don't understand is why the administration doesn't break these up into smaller pieces. Pieces that are not "too big to fail." What Obama is doing is just giving tax money away. Very disappointing.

Looking for Out-of-Favor Stocks

Sat, 07 Nov 2009 05:59:27 -0500

I have owned ARLP for some time. Granted, it has been out of favor and I have not made a lot of money. However, it has paid a steady 8% dividend and I have written covered calls against it. For example, I wrote a covered call at 40 for December. Between the covered calls and the divy I have managed to eak out a steady 12 to 14%. So, I will probably keep it and write another covered call in December. It will be at 40 and out a few months.

Is Crude Oil Headed Lower?

Fri, 06 Nov 2009 08:20:51 -0500

Two things support the price of crude. First, there is a 5% depeletion going on continously. This means that crude production is going down unless we build new oil production infrastructure. It has been estimated to maintain current capacity that the world needs to spend $1 Trillion/year. We are not doing that. Secondly, the US dollar is going down in dollar. So, a lot of the price increase is merely inflation.

Senator Schumer Misses the Full Picture on A-Power's Joint Texas Wind Farm

Fri, 06 Nov 2009 08:12:06 -0500

When windpower is described as the new ethanol, you are being generous. Windpower derived electricity is priced at $.18/kwhr. It is not competitive. For the US government to spend my money supporting this boondoggle is the heighth of stupidity. But, then again, its government money.

If windpower makes sense it would not need subsidies.

Cisco: Becoming Too Big and Too Acquisitive for Its Own Good?

Fri, 06 Nov 2009 08:07:53 -0500

I basically agree. Cisco has been "dead money" for a decade. Not only has the stock price done nothing, it pays no dividend. It is a bad investment and has been for a long time.

Buffett's BNI Purchase: Bearish Bet on the Economy?

Thu, 05 Nov 2009 13:30:06 -0500

I am a bit puzzled by Buffet's bet, too. He waited till BNI went up from March and then put on top of that another 30% premium. It seems to me, that the US economy has to come around big for him to make out well.

Buffet did this last year when he bought COP at the top. He also bought GE at 20. Of course, in the GE case he got a 10% preferred dividend to tide him over. With the Obama policies, I think we could see several years of low growth. It may take him some time for this to work out. Again, just like COP.

Riding the Rails: Why BNI Was Berkshire's Best Bet - And Vintage Buffett

Wed, 04 Nov 2009 08:55:43 -0500

I wonder about this one. Is this just another cop buy? First, he paid a substantial premium for BNI. And, he paid that premium after the stock price had risen substantially since March. Secondly, with current government macro policies, the US could be entering a "lost" decade like Japan. I am not optimistic about the US economy over the next five years. We shal see.

Hydrogen-Fueled Cars Become a Thing of the Present

Tue, 03 Nov 2009 11:14:07 -0500

I hate repeating myself, but no one apparently listens. The problem with hydrogen as a fuel supply is two fold. The first is how to generate it. The only practical approach is nuclear power but we really don't have enough nukes. However, I concede that this could be done.

Secondly, how do you store and handle it? Hydrogen is stored a cryogenic temperatures. Are you really proposing a cryogenic tank for an auto? That, frankly, is not practical nor economic. No one has solved this issue. There has been research on metal hydride technology but, as of this date, nothing has happened to make it practical or economic. Until this last problem is solved, hydrogen is a pipedream.

'Too Big to Fail' Is Too Hot to Handle

Fri, 30 Oct 2009 11:11:36 -0400

Any bank that received TARP money should be viewed as a fail institution. Therefore, as part of the "workout", the goal should be to reduce its size so that it is not "too big to fail." Thus citigroup and bank of america should be broken up into smaller banks that can be allowed to fail.

Bemused by GDP Figures

Thu, 29 Oct 2009 15:21:42 -0400

Sure doesn't seem like happy days to me. I live in Houston and we are just getting by. The big engineering firms talk about new projects, but they keep getting delayed. I just don't see a turnaround here, yet.

Cap and Trade Would Sink the U.S. Economy

Thu, 29 Oct 2009 15:07:04 -0400

On a more serious note, passing Cap and Trade would be the deathknell of the democratic party. Consider the following scenario: we pass this trash and the result is 10 to 12% unemployment for the next decade, industry does a mass migration to China and India. The democrats go to the electorate which is suffering and says, "Hey, in a century the earth might be cooler by a degree!" Yes, that will be a good sell. I don't see how a republican could loose in that scenario.

Cap and Trade Would Sink the U.S. Economy

Thu, 29 Oct 2009 15:03:31 -0400

Hey, if you don't like cap and trade then leave the country. Go to some place like......China, or India. Yeah, that's it. Take your money, your stinking jobs, your economic future. We don't need it. We got Hope and Change. Yeah, that's the story.

You know this is the same sort of stuff they said about California a few years ago. They said that all that regulation, taxation, greenie economics would cause the state budget to implode and the economy to stink. And, we know that never happened. Right??

Fixing GMAC: Paging JPM

Wed, 28 Oct 2009 15:09:32 -0400

We deserve this debacle. We voted in fools to run the government and they do what fools do: foolish things. This makes over $100 billion we have poured into the GM rathole.

BP Income Statement Analysis for September 2009 Quarter

Wed, 28 Oct 2009 09:19:26 -0400

As I have said many times, I believe oil is a great longterm investment. Its price is determine by worldwide demand, not just US. So, it is somewhat immune to the shenanigans of US politicians. Secondly, BP is a major that pays a good dividend. So, you get paid while you wait for the next oil spike. All good. So, I keep a big part of my portfolio in BP.

Chrysler: The View from the White House

Thu, 22 Oct 2009 11:38:24 -0400

Well, the conclusion that everyone ended up better with Rattner's solution is obviously wrong. I am a taxpayer. Did I end up better? I think not, I got stuck with the tab for all the job Rattner doled out.

Big Banks: The Consensus Is Cracking

Wed, 21 Oct 2009 11:43:32 -0400

I completely, totally agree. This whole concept of "too big to fail" is just disasterous. The best way to handle this is to break up these big oligopolies so that they are, indeed, small enough to fail with no systemic consequences. Why a democrat like Obama wants to defend such concentration of power is beyond me.

Private Equity, Business Flipping and Asymmetrical Outcomes

Mon, 19 Oct 2009 10:46:33 -0400

Let me make another devil's advocate. Years ago I worked for a company called Central Soya. Central Soya was a processor of soybeans. It was very good at this business. It knew how to build, modify, and run these plants very efficiently. It had an excellent engineering department. Central Soya had good cashflow. However, the management of the company insisted in investing in businessess it really knew nothing about (frozen, packaged foods). Management also had a fleet of airplanes and awesome offices.

Well, the company was bought out and the PE company that came in divested them of their frozen food operations and sold of the airfleet. It basically stripped them down to what they were good at. This, of course, enhanced cash flow. They then sold the company at a tidy profit.

Now, did this PE company add much? Well, in a way, they did. They focused the company on what it was good at and it stripped it of non-performing assets. Could the company's management have done this? Sure, but the never did.

What a Portfolio Approach to Climate Policy Means for Your Stock Portfolio

Mon, 19 Oct 2009 09:02:58 -0400

From an economic perspective, investing in alternative energy sources is generally foolish. For example, the cost of electricity generated via wind is about $.18/kwhr which is easily three to four times the cost of electricity generated by coal. There are exceptions, of course, nuclear power being one.

All of these alternate energy scenarios are based upon the premise that government policies will be implemented and maintained while they punish citizens (i.e. voters). Is this really plausible? If you believe this, then alternate energy longterm makes sense. However, if you believe this, why not just invest in China ETFs? They are not about to drink this climate change kool-aid and they will make out like bandits as industry shifts there to avoid this nonsense. Even if the west comes to its senses, China is still a pretty good longterm investment. So, I say, the best alternative play is China ETFs.

Hudson City Bancorp: Yielding Total Returns for Option Writers

Wed, 14 Oct 2009 10:44:24 -0400

You are too slick for me. I just buy and write covered calls on this one. have for some time. doing ok

Ford: Popular Fiesta Hatchback Coming to the U.S.

Wed, 07 Oct 2009 10:20:37 -0400

I bought a Ford escape about six months ago. I must say, it is a surprizingly good car. My wife has a Lexus and I can truthfully say I prefer the Escape. It is comfortable, convenient, and (so far) the quality is excellent. It has the small engine and six speed transmission so I get 26 mpg. Oh, the Escape is about half the price of the Lexus.

Ford is really making nice automobiles and they are inexpensive.

Private Equity, Business Flipping and Asymmetrical Outcomes

Wed, 07 Oct 2009 10:15:56 -0400

Let me play the devil's advocate here. Many of the companies that were bought out by PE were bought out on the cheap because their stock price was low. It was low because the management of said companies never properly rewarded their stockholders. These companies were run as private little fiefdoms by the management and the stockholders were, at best, an afterthought. Consequently, the stock's value languished. This made them cheap and an easy buyout target. PE then raped them.

Was PE wrong? Sure. But,these companies made themselves such easy targets by allowing their stock price to be very low in relation to their value. I guess what I am saying is that there is wrong on both sides of that buyout.

U.S.: Left Behind in Nuclear

Wed, 07 Oct 2009 08:41:26 -0400

I did not say you could not build windpower plants. I just said that with its availability of 28% you would have to build almost four times more in capacity then you actually needed. Thus, you need to factor that in the economics. I have seen way too many times someone will quote the cost of a 100 kilowatt nameplate capacity windmill farm and compare it to the equivalent 100 killowat coal or nuke power generation system. You really have to have about 400 kilowatt nameplate capacity to get 100 killowat constant and it needs to be spread out geographically.

On Oct 06 05:32 PM terravario wrote:

> Epeon restates an often repeated view that wind turbines only generate
> a percentage of their nameplate capacity (28% in West Texas according
> to him). Therefore wind is unreliable, variable, not available 24/7
> like nuclear. He also makes the point that the wind resource area
> of West Texas is distant from major load centers and that transmission
> capacity is lacking to wheel that power to those load centers. One
> is to draw the conclusion that wind power a poor bet to compete with
> nuclear.
>
> I do not suggest that nuclear should be left totally out of the mix
> of power sources that we will have to employ to address energy independance
> and climate change. However, the argument that wind power is not
> a suitable replacement for baseload coal and nuclear is really a
> myth that is being propagated by "clean coal" and nuclear advocates.
>
>
> If one looks at a single wind power project, intermittency or availability
> is an issue. For a large robust grid that includes wind power as
> the chief component, variability, not intermittency, is the issue.
> MISO and others now agree that wind power, deployed across a diverse
> north-south and east-west regional grid, can be characterized as
> baseload capacity. Variability can be addressed through the use of
> hydroelectric and pumped storage capacity (huge batteries that already
> exist in several major regions in North America).
>
> For example, generating capacity in the Great Lakes region (Canada
> and US within the Great Lakes watershed) is currently 75+ gigawatts.
> This capacity serves a population of 42 million people in a relatively
> concentrated load center. The Great Lakes region is the third largest
> economy in the world (behind the US and Japan) and is responsible
> for roughly 10-15% of total greenhouse gas emissions. The regional
> wind resource, both onshore and offshore, is estimated to be 300+
> gigawatts, one of the very best in the world. Under the DOE goal
> of 20% Wind by 2030, wind could, at a MINIMUM, replace 15-20 gigawatts
> of current base load capacity within the Great Lakes region. We also
> have available several gigawatts of hydroelectric and pumped storage
> capacity at Ludington (seekingalpha.com/symbo...), Robert
> Moses (seekingalpha.com/symbo...), and Sir Adam Beck (Ontario)
> within the Great Lakes watershed (plus Quebec) to balance out such
> a robust and diverse grid. No need to wheel wind power from the plains
> states and provinces. Power from West Texas and the Great Plains
> should be part of a regional grid that serves Denver, Dallas, Houston,
> Omaha, and Kansas City.
>
> The movement away from coal in the Great Lakes is real. Ontario plans
> to replace all its coal capacity with wind and other renewables within
> two decades (with some minimal contribution from nuclear) and supports
> this development with a new feed in tariff law. The Michigan Public
> Service Commission has refused to issue certificates of convenience
> and necessity for any new coal plants in favor of wind and renewables.
> More megawatts of wind capacity are currently being built than coal
> capacity all across the Great Lakes. Add solar to the mix and it
> is all win-win.
>
> For more information, see the DOE 20% Wind by 2030 report and the
> Great Lakes Wind Collaborative website at <www.glc.org/energy/win...;;.
>
>
> On Oct 05 09:40 AM epeon wrote:

U.S.: Left Behind in Nuclear

Mon, 05 Oct 2009 09:40:30 -0400

Be real careful when someone says that they can build wind powered capacity for $1 K to $2 K per kwhr. For example, that may be nameplate capacity, but availability of wind power is approximately 28% in West Texas. therefore, the cost is probably $4 to $8 per kwhr to get a kwhr at 100% utilization like a nuke. And, how do you get the power to the grid from West Texas? You need power lines which do not exist. If you include that cost, then the cost of wind power is more like $6 to $12 per kwhr.

U.S.: Left Behind in Nuclear

Mon, 05 Oct 2009 08:48:46 -0400

I absolutely agree with you that we need to build nuclear plants. It is a real shame that no one in the Obama administration understands this and provides any leadership.

As far as the comment about graying engineers and the need to graduate new engineers, well as a graying engineer, I have a few comments. The problem is this: there is no economic base for hiring engineers in the US. I live in Houston and there are very few companies actually hiring eingineers. Most people with technical degrees don't even work in their field.

My son graduated with honors from Georgia Tech with degrees in electrical engineering and a masters in computer engineering. His wife graduated from yale with a finance degree. He makes $80,000 as an engineer, she makes $350,000 as a hedge fund analyst. And, yet, she asks him all the time to help her with the mathematical analysis of her accounts. So, which field do you want to go in to?

The Real Deal with Ken Lewis

Fri, 02 Oct 2009 11:08:51 -0400

One thing not mentioned is that when he found out bad news about Merril Lynch he intentionally hid this information from the stockholders. Ken Lay did the same thing. Frankly, the deceit bothers me more.

4 Stocks to Consider in This Whipsaw Environment

Tue, 29 Sep 2009 08:51:08 -0400

I do like basic coal stocks. However, I prefer ARLP. It is in the same basic business and, being an MRLP, it pays a very nice 8+% dividend. So, you get paid while ou waitl