Pch101's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/231498/comments http://seekingalpha.com/article/91980-how-you-can-invest-in-the-pickens-plan?source=feed#comment-238980 238980
Pickens is selling a pipe dream that the US is going to become energy independent. The US has a snowball's chance in Hades of achieving energy independence.

Energy independence cannot possibly be achieved in the United States without major lifestyle changes and reductions in commerce that Americans will simply not make, under any circumstances.

The Pickens Scam is simply a corporate welfare scheme that will produce no bang for the buck for anyone, except for Pickens and his cronies. It's a pork barrel project that appeals to our base instincts and to those who can't do a bit of research or use a spreadsheet.]]> Mon, 25 Aug 2008 23:51:36 -0400
Pickens is selling a pipe dream that the US is going to become energy independent. The US has a snowball's chance in Hades of achieving energy independence.

Energy independence cannot possibly be achieved in the United States without major lifestyle changes and reductions in commerce that Americans will simply not make, under any circumstances.

The Pickens Scam is simply a corporate welfare scheme that will produce no bang for the buck for anyone, except for Pickens and his cronies. It's a pork barrel project that appeals to our base instincts and to those who can't do a bit of research or use a spreadsheet.]]> http://seekingalpha.com/article/91980-how-you-can-invest-in-the-pickens-plan?source=feed#comment-237245 237245
Even in the best case scenario, it's a drop in the bucket. It is simply impossible to generate enough wind power that it could meaningfully reduce US usage of natural gas for electricity generation and to divert that to powering motor vehicles.

Anyone who spends ten minutes with the numbers can see this. Most electricity in the US is generated from coal, and most natural gas is not used to create electricity. Even if you could reduce electricity generation from natural gas by 10% (a totally unrealistic assumption, by the way), you would only reduce demand for natural gas by about 3%. The math does not compute.

Ultimately, the Pickens Scam would make the US even **more** dependent upon imported energy, because the US lower 48 is depleting what is left.

Over time, the US is destined to import more of its gas from foreign sources, which means more money for the countries that have it, such as Russia and Iran. In other words, the usual suspects.

The Pickens Scam ultimately appeals to the greed and stupidity of the American voter, who doesn't want to accept the reality that the quickest route to using less imported energy is to consume less energy.

That means downgrading your lifestyle and figuring out how to use less energy, even if it means walking, using public transit or just staying home. Americans apparently lost their rationing gene sometime around 1945, and they are bound and determined to never, ever get it back.

(None of this is a criticism of the article, by the way. I'm watching GE, too, but I doubt that Pickens can buy enough windmills to do much for their fundamentals.)]]> Sat, 23 Aug 2008 13:26:16 -0400
Even in the best case scenario, it's a drop in the bucket. It is simply impossible to generate enough wind power that it could meaningfully reduce US usage of natural gas for electricity generation and to divert that to powering motor vehicles.

Anyone who spends ten minutes with the numbers can see this. Most electricity in the US is generated from coal, and most natural gas is not used to create electricity. Even if you could reduce electricity generation from natural gas by 10% (a totally unrealistic assumption, by the way), you would only reduce demand for natural gas by about 3%. The math does not compute.

Ultimately, the Pickens Scam would make the US even **more** dependent upon imported energy, because the US lower 48 is depleting what is left.

Over time, the US is destined to import more of its gas from foreign sources, which means more money for the countries that have it, such as Russia and Iran. In other words, the usual suspects.

The Pickens Scam ultimately appeals to the greed and stupidity of the American voter, who doesn't want to accept the reality that the quickest route to using less imported energy is to consume less energy.

That means downgrading your lifestyle and figuring out how to use less energy, even if it means walking, using public transit or just staying home. Americans apparently lost their rationing gene sometime around 1945, and they are bound and determined to never, ever get it back.

(None of this is a criticism of the article, by the way. I'm watching GE, too, but I doubt that Pickens can buy enough windmills to do much for their fundamentals.)]]> http://seekingalpha.com/article/87929-impact-of-gm-destroying-the-ev1?source=feed#comment-223315 223315
You must be kidding. I have no love for General Motors, one of the most ineptly run enterprises on this planet. GM is at best a short-term day trade, which is rotten on the fundamentals and has few prospects in its present form.

But in this case, GM made the appropriate business decision to walk away from the CARB-mandated, unwanted-by-consumers EV1. A similar decision that, you will note, was **also** made by Toyota and Honda, two highly successful car companies that do understand US consumers and how to make products that consumers want to buy.

All of the major car makers, whether they are successful and unsuccessful, have one thing in common -- they don't see a market for a mainstream electric vehicle. If they did, they would have made the effort sometime during the last century to make them in large quantities and to sell them, because profit is a strong motivator.

There are no profits to be made in these cars. Toyota's and Honda's choice to commit to hybrids shows that they understand this. Hybrids solve the very problems of range and refueling that you deny are problems -- obviously, Toyota and Honda also believed them to be problematic, otherwise they wouldn't have bothered investing effort into mass-producing these cars.

Now, Toyota sells more hybrids in just a few days than GM could lease EV1's for the entire length of the program. I think that you've got enough clues at this point to long hybrids, and short EV's. If you're looking for PE, it's all P and no E. ]]> Tue, 05 Aug 2008 13:31:02 -0400
You must be kidding. I have no love for General Motors, one of the most ineptly run enterprises on this planet. GM is at best a short-term day trade, which is rotten on the fundamentals and has few prospects in its present form.

But in this case, GM made the appropriate business decision to walk away from the CARB-mandated, unwanted-by-consumers EV1. A similar decision that, you will note, was **also** made by Toyota and Honda, two highly successful car companies that do understand US consumers and how to make products that consumers want to buy.

All of the major car makers, whether they are successful and unsuccessful, have one thing in common -- they don't see a market for a mainstream electric vehicle. If they did, they would have made the effort sometime during the last century to make them in large quantities and to sell them, because profit is a strong motivator.

There are no profits to be made in these cars. Toyota's and Honda's choice to commit to hybrids shows that they understand this. Hybrids solve the very problems of range and refueling that you deny are problems -- obviously, Toyota and Honda also believed them to be problematic, otherwise they wouldn't have bothered investing effort into mass-producing these cars.

Now, Toyota sells more hybrids in just a few days than GM could lease EV1's for the entire length of the program. I think that you've got enough clues at this point to long hybrids, and short EV's. If you're looking for PE, it's all P and no E. ]]> http://seekingalpha.com/article/87929-impact-of-gm-destroying-the-ev1?source=feed#comment-223135 223135
You have to forgive me, but I thought that this was a business website, that features authors who had an understanding of the workings of a market economy.

Obviously, the range is a problem. We know this because people are not buying electric cars and are not particularly asking for electric cars, particularly when offered at an unsubsidized price.

I can assure you that nobody would have leased an EV-1 if it was offered at a price that matched its cost of production. That shows that demand does not exist -- consumers are unwilling to pay the freight for these vehicles.

The Prius proves my point. It deals with the main turnoff of pure electric vehicles -- the EV's uncanny ability to leave their drivers stranded for lack of fuel or the time to refuel it. The Prius has hurdled the range and recharging limitations of the electric car and therefore has found a market. That makes perfect sense, and there is clearly a market for a part-electric vehicle that doesn't create risk for the driver.

The percentage of journeys that are taken within range of a battery is irrelevant. The point is that there is a high enough percentage of journeys that do exceed that battery range that it is enough to kill the market.

Most consumers don't want a vehicle that is bound to fail serving their needs for 10 or 20 or 30 or whatever percent of their lives, particularly when that vehicle is costly and consumes a lot of space. Very few car buyers want a car that offers the equivalent of Russian roulette (Do I get stranded on the shoulder today or not? Can I get to the grocery store or not?) There certainly aren't enough of these car buyers to constitute a viable market, given the capital intensive nature of car manufacturing.

We have a name for companies that refuse to accept consumer wants and market reality: Bankruptcy. We don't respond by congratulating them, but by shorting their stock. ]]> Tue, 05 Aug 2008 10:46:09 -0400
You have to forgive me, but I thought that this was a business website, that features authors who had an understanding of the workings of a market economy.

Obviously, the range is a problem. We know this because people are not buying electric cars and are not particularly asking for electric cars, particularly when offered at an unsubsidized price.

I can assure you that nobody would have leased an EV-1 if it was offered at a price that matched its cost of production. That shows that demand does not exist -- consumers are unwilling to pay the freight for these vehicles.

The Prius proves my point. It deals with the main turnoff of pure electric vehicles -- the EV's uncanny ability to leave their drivers stranded for lack of fuel or the time to refuel it. The Prius has hurdled the range and recharging limitations of the electric car and therefore has found a market. That makes perfect sense, and there is clearly a market for a part-electric vehicle that doesn't create risk for the driver.

The percentage of journeys that are taken within range of a battery is irrelevant. The point is that there is a high enough percentage of journeys that do exceed that battery range that it is enough to kill the market.

Most consumers don't want a vehicle that is bound to fail serving their needs for 10 or 20 or 30 or whatever percent of their lives, particularly when that vehicle is costly and consumes a lot of space. Very few car buyers want a car that offers the equivalent of Russian roulette (Do I get stranded on the shoulder today or not? Can I get to the grocery store or not?) There certainly aren't enough of these car buyers to constitute a viable market, given the capital intensive nature of car manufacturing.

We have a name for companies that refuse to accept consumer wants and market reality: Bankruptcy. We don't respond by congratulating them, but by shorting their stock. ]]> http://seekingalpha.com/article/87929-impact-of-gm-destroying-the-ev1?source=feed#comment-221948 221948
Unless these problems are fixed, there will never be a market that is large enough to serve profitably.

Electric cars have existed for over a century, but no one has ever solved these problems. That is a strong hint that these problems may well be insurmountable, or are not worth the effort.

GM created the EV1 lease program because of the California Air Resources Board's then-pending Zero Emissions Vehicle requirement. None of the automakers wanted the ZEV requirement, but had no choice but to comply in some modest way. The goal of the car makers was to show that the electric car was ultimately impractical and unachievable, so that the ZEV rules needed to be modified. When the car companies were able to get the rules changed, they canceled their ZEV cars and went back to business.

There is nothing wrong with electric cars per se. But there is something terribly wrong with using batteries as a fuel storage medium. There is no point in building large quantities of products that nobody would buy, and to sell or lease them at a significant loss. Getting a few hundred bucks per month for a product that costs six figures to produce made no sense at all, for anyone.]]> Mon, 04 Aug 2008 01:47:10 -0400
Unless these problems are fixed, there will never be a market that is large enough to serve profitably.

Electric cars have existed for over a century, but no one has ever solved these problems. That is a strong hint that these problems may well be insurmountable, or are not worth the effort.

GM created the EV1 lease program because of the California Air Resources Board's then-pending Zero Emissions Vehicle requirement. None of the automakers wanted the ZEV requirement, but had no choice but to comply in some modest way. The goal of the car makers was to show that the electric car was ultimately impractical and unachievable, so that the ZEV rules needed to be modified. When the car companies were able to get the rules changed, they canceled their ZEV cars and went back to business.

There is nothing wrong with electric cars per se. But there is something terribly wrong with using batteries as a fuel storage medium. There is no point in building large quantities of products that nobody would buy, and to sell or lease them at a significant loss. Getting a few hundred bucks per month for a product that costs six figures to produce made no sense at all, for anyone.]]> http://seekingalpha.com/article/88544-starbucks-on-sale-part-i?source=feed#comment-221182 221182
It's pretty straightforward -

-Brand: This is one of the best brands in America, with high identity and a good deal of loyalty from a diverse, aspirational demographic. Most companies would kill for a brand this good; Starbucks just needs to be sure to keep that brand intact.

-Market share: In its space, Starbucks probably has about 80% market share in the US market. Its rivals such as Caribou, Peets and Coffee Bean and Tea Leaf don't come anywhere close; none have a plan to dethrone the leader.

-Revenues: Sales continue to grow, despite a gloomy economy. This suggests that consumers are hanging on to the product, despite difficult times. They may decline a bit as troubles deepen, but this is a product that many consumers will fight to keep in their lives.

Starbucks doesn't so much as sell coffee as it does lifestyle. If it can keep its brand intact and manage its costs effectively long enough to ride through the downturn, it will emerge from the economic rebound.

I'm not completely sold on some of the project initiatives and I suspect that 2009 will have slowing revenue growth as the economic crisis deepens, but otherwise they are well poised to ride the tide upward. I expect that the stock price may slip more if the indexes take a hit, but on the fundamentals, it's a good company that will recover and eventually will merit a long position. The questions now are when, and by how much.
]]> Sat, 02 Aug 2008 16:56:00 -0400
It's pretty straightforward -

-Brand: This is one of the best brands in America, with high identity and a good deal of loyalty from a diverse, aspirational demographic. Most companies would kill for a brand this good; Starbucks just needs to be sure to keep that brand intact.

-Market share: In its space, Starbucks probably has about 80% market share in the US market. Its rivals such as Caribou, Peets and Coffee Bean and Tea Leaf don't come anywhere close; none have a plan to dethrone the leader.

-Revenues: Sales continue to grow, despite a gloomy economy. This suggests that consumers are hanging on to the product, despite difficult times. They may decline a bit as troubles deepen, but this is a product that many consumers will fight to keep in their lives.

Starbucks doesn't so much as sell coffee as it does lifestyle. If it can keep its brand intact and manage its costs effectively long enough to ride through the downturn, it will emerge from the economic rebound.

I'm not completely sold on some of the project initiatives and I suspect that 2009 will have slowing revenue growth as the economic crisis deepens, but otherwise they are well poised to ride the tide upward. I expect that the stock price may slip more if the indexes take a hit, but on the fundamentals, it's a good company that will recover and eventually will merit a long position. The questions now are when, and by how much.
]]> http://seekingalpha.com/article/86416-as-american-express-goes-so-goes-the-economy?source=feed#comment-212223 212223
But I do question the value of using AmEx as a proxy. For one, AmEx maintains a niche within the financial sector, targeting business users and higher spenders with its cards and travel services, so it does not represent the economy or the financial sector as broadly as do the banks, Visa or Mastercard. For another, AmEx is facing ever increasing competition from Visa, Mastercard and online travel businesses for its various foreign exchange and travel services, so it is slowly getting squeezed in a space where it once had a strong brand and considerable market share.

In that sense, I think that using AmEx as a barometer for the broader economy would be akin to evaluating the performance of the automotive sector by focusing on BMW, instead of Toyota. AmEx is too specialized a company and there's too much other potential noise in the numbers to use it definitively. Perhaps companies such as Bank of America and Visa would provide better shorthand on the financial side.]]> Wed, 23 Jul 2008 08:55:56 -0400
But I do question the value of using AmEx as a proxy. For one, AmEx maintains a niche within the financial sector, targeting business users and higher spenders with its cards and travel services, so it does not represent the economy or the financial sector as broadly as do the banks, Visa or Mastercard. For another, AmEx is facing ever increasing competition from Visa, Mastercard and online travel businesses for its various foreign exchange and travel services, so it is slowly getting squeezed in a space where it once had a strong brand and considerable market share.

In that sense, I think that using AmEx as a barometer for the broader economy would be akin to evaluating the performance of the automotive sector by focusing on BMW, instead of Toyota. AmEx is too specialized a company and there's too much other potential noise in the numbers to use it definitively. Perhaps companies such as Bank of America and Visa would provide better shorthand on the financial side.]]>