epeon

Is Crude Oil Headed Lower?

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.

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

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

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.