Mark Divy's Comments

Latest Case-Shiller Housing Report and Its Ramifications: Seeds of a 2010 Crisis?

Thu, 31 Dec 2009 10:43:48 -0500

Another aspect of the Case Shiller index to consider is how much of the pricing is based on the short sells / repo houses. The CS index is based on sales price comparison over the years, but I see nothing that would remove, or make exception for the repo sales. These sales have obvious effects on the housing prices, but I see these as being exaggerated in the current market.

Also would concur with the Superman07 comment. Housing below the $200K range seems to be moving very quickly in Louisville area - many homes selling in less than a month at pre-recession prices. I think that some of the delay in higher priced homes is based on the lenders liquidity concerns more than other market forces.

As usual, the areas with the highest run in the bubble - NV, CA, FL, NY are the worst hit. Many of us see a much smaller impact in local markets.

Cramer's Mad Money - 3 Safe Dividend Stocks (12/21/09)

Wed, 23 Dec 2009 14:55:29 -0500

Safe Dividends - depends on the outlook. I would avoid any drug company stock, and health care in general with the movement on the new healthcare plan in congress. This would eliminate PFE. Government savings can only come from lower reimbursements to healthcare, and I expect to see fallout similar to the round of legislation that crippled the rehab industry several years ago.

I have found that there are no such stocks as safe dividends. All can come, increase or go. Still best to look at the industry, and find a niche that you can fully understand, watch for impacts from technology and commodities, and adjust for the times. One such area would be the Canadian oil trusts - dividends in the near term, possible take over in the next couple of years as they convert to regular business model. Also links them to oil, which I like long term as well.

For future looking Dividend investors, suggest minor investments in some of the REITs that have been so badly damaged in the last couple of years. With economic recovery, these might be a place for some venture stakes.

Analyst John Kaiser on Rare Earths

Mon, 14 Dec 2009 14:38:55 -0500

Author has provided 25kg of rare earths for the Prius. In previous research, I have only identified 1kg of Neodymium, of which neodymium magnets can have up to 6% of the neodymium substituted with dysprosium and/or terbium - and 10-15kg of lanthanum. What other rare earths are included in the total to reach 25kg?

How Oil and Gas Investors Can Prepare for the Energy Trust Corporate Conversion

Wed, 09 Dec 2009 09:02:09 -0500

As a consistent holder of Canadian Energy trusts since the late 90's with Shining Bank, I am very interested in the points provided in this article. It would be interesting to see the author's take on some of the other trusts that have not yet converted, for balanced producers like PWE, oil heavy folks like BTE, or integrated companies like PVX.

Gold: Expect a Technical Correction Before the Final Frontier

Mon, 07 Dec 2009 15:07:03 -0500

No doubt about it - investor bubble that will drop - just like every other incredible spike in gold, oil, or fil in the blank commodity. Remember, all of those real estate investors were sure of their never ending growth as well. Hoarding of gold, much as in the case of diamonds, is the main reason there is value increase here. When the sellers come out, there will be no demand....

Earth to GE: Boost Your Dividend

Mon, 07 Dec 2009 13:47:19 -0500

I would also not expect any change in the near term. Combined with the CRE exposure, and general market intangibles, I would also like to see them get some of the debt off the books as well. $60 Bil sounds like a lot, but when there accounts payable each quarter are half of that it puts the cash on hand in a different perspective. Remember - many of the companies that have had such a hard time lately also have increased their debt load way too much. A bit more reasonable debt load would be a good first step to creating shareholder value and stability.

Is Oil Demand Increasing or Shrinking?

Fri, 04 Dec 2009 14:50:11 -0500

And, of course, all of that supply is waiting to be had for $10 a barrel? Cheap oil is getting hard to find - oil that will require additional procesisng is pelntiful, but cannot be had cheaply. Supply will keep up with demand only as long as there is a profit margin for the producers. If not, the investments for growth will not materialize in time to meet full demand.

On Dec 04 01:52 PM amdman wrote:

> The Peak Oil scam/bubble is about to pop like all bubbles.
> Like all bubbles it was peak demand, not peak supply, we have at
> least 200 years of oil, not including another 200 years oil shale
> and 1000 years coal that can also be converted to oil.

Peak Oil Demand

Thu, 03 Dec 2009 15:49:24 -0500

I do think that the growth in oil demand in China and India will be the near term catalyst for demand growth. Their increase in demand over the last few years were key to the short term price spikes of $140 a barrel. The unknown is how much growth will occur in Asia, and how much will that growing working class really affect world demand.

Second, the whole demand curve can really change if we would just start working through some of the heavy oil / sour crude that is laying around unwanted. Access to this supply would change the proven reserve count over night.

Lastly, I hope we do continue to decrease our demand in the US for oil. Not a big believer in mercantilism, but sending the amount of cash overseas every year is really slowing us down. So, I hope the IEA projections are correct for the USA.

Top Dividend Stocks to Accumulate Now

Thu, 03 Dec 2009 14:49:20 -0500

MLPs are much like the CONROYS - stocks like these provide high dividends, but are not for everyone. There are specific tax consequences, and IRA vs Open considerations, and risks that many folks just don't like to mess with. Both have good dividends, but would not show up on his list due to variations in payouts, and higher dividend pay out ratio. Many of these are either paying less or not paying during the last year.

But, that said, I do own some of both...

High Gold Prices: It's the Oil, Stupid

Wed, 25 Nov 2009 10:47:18 -0500

Actually, a major portion of the defense budget does go to conservation projects that actually save the government millions each year in utility costs. Based on presidential mandates under Clinton and increased under Bush - most installations are expanding their green initiatives. You shoul dexplore the information available on such items as geothermal projects, solar, and natural gas projects, electric vehicles across the country - funded with defense budgets - cutting use of oil/NG/coal generation.

Do a search for Executive Order 13423 -

Search for Solar and Fort Carson as one example - you would be amazed at how much the DoD is really doing.

On Nov 24 03:54 PM Rokjok777 wrote:

> Superb post, yes, the elephant in the room. Glad to see you excoriated
> both the Bush folks but also the business-as-usual Obamanauts.
...
> Jimmy Carter a little credit. He faced up to the issue and applied
> a windfall profits tax of 1 1/2% of oil company profits for one year.
> That established a fund that lasted for years and delivered energy
> conservation projects that are still saving energy today.
> If Obama really did stand for something new, he would have taken
> 1/50th of the defense budget (soon to exceed $1 trillion annually)
> and funneled it straight to conservation projects.

Rapid Transition to Grid Enabled Vehicles Not Possible or Desirable

Fri, 20 Nov 2009 12:44:24 -0500

John,

I enjoy your articles. Always seem to get a new point of view form them, and the follow up comments. One add for you in addition to the Lithium "shortage" are the other rare earth parts that go into the EV lines. Info listed below from earleir Yahoo new article.

Much like the peak oil discussion and how we can always potentially find more - the truth is that there is a limited supply of identified commodities to work with. How we best use them to aid our energy fight is the real issue.

news.yahoo.com/s/nm/20...

Each electric Prius motor requires 1 kilogram (2.2 lb) of neodymium, and each battery uses 10 to 15 kg (22-33 lb) of lanthanum. That number will nearly double under Toyota's plans to boost the car's fuel economy, he said.

Among the rare earths that would be most affected in a shortage is neodymium, the key component of an alloy used to make he high-power, lightweight magnets for electric motors of hybrid cars, such as the Prius, Honda Insight and Ford Fusion, as well as in generators for wind turbines.

Close cousins terbium and dysprosium are added in smaller amounts to the alloy to preserve neodymium's magnetic properties at high temperatures. Yet another rare earth metal, lanthanum, is a major ingredient for hybrid car batteries

Cramer's Mad Money - 5 Cash for Caulkers Picks (11/18/09)

Thu, 19 Nov 2009 14:32:05 -0500

MB,

Cramer does have some value - but recommending buying a stock at its 52 week high, paying its lowest dividend rate in several years, as in looking over priced - might be a bit of a poor recommendation. Several months ago, when the stock was priced around 7.50 a share, would have made more sense to recommend then. Cramer tends to follow the charts and follow the crowd. Tends to lead one to buy high, and sell low.

Problem is that too many people don't know what DD is, and will loose their shirt just going with Cramer all of the time.

Cramer's Mad Money - 5 Cash for Caulkers Picks (11/18/09)

Thu, 19 Nov 2009 08:24:33 -0500

Cramer is late as usual. After the Canadian trusts have trippled or more over the last 9 months, now he thinks it is a buy because someone might buy one...

If you buy stocks hoping that someone will purchase the company, go ahead and follow Cramer, if you want to make long term profits, stop following someone that is always announcing great stocks after the game is over...

Remember - Cramer wanted to buy more Natural Gas when it was at $14/MCF - too late, and worng time.

Be careful out there.

Toyota Joins Ford and Swings to a Surprise Profit

Mon, 09 Nov 2009 09:51:33 -0500

Interesting comments - just wondering how much trouble would be involved in identifying the actual US Autos -

Would have to eliminate the Pontiacs, mostly from Australia, watch out for the Chryslers and GM products from Canada, Fords made in Mexico, etc.

Also, where should the line be drawn, do Honda and Toyota production in Ohio and Kentucky cound as US autos, or not? Cuttinhg out these folks would eliminate many US jobs there, as well as support operations and part suppliers.

Dow and Then: 1999 vs. 2009

Thu, 15 Oct 2009 08:28:59 -0400

My investment portfolio has increased by over 14x from additional cash and investment income during the period from 1999 to 2009 (not very remarkable, but to prove a point). It is not what the Dow says, it only matters what you buy, when you sale, and why.

The Problems with Brad DeLong's Keynesian Stimulus Proposals

Fri, 02 Oct 2009 13:26:09 -0400

By the way - sounds like a nice retirement plan. Just watch out for those waves.

The Problems with Brad DeLong's Keynesian Stimulus Proposals

Fri, 02 Oct 2009 13:23:49 -0400

The problem is that we have never really applied the teachings of Keynes. His basic belief was to build up a "rainy day" account during good times, and then apply that as stimulus during bad times. With such a large amount of debt, we have never really been in a position to apply this model to our economy. I doubt that he would have thought that stimulus spending as debt that is likey never repaid, and just added to the last recovery cost - would apply to his economic thought.

Got to pay off the debt, and maintain some surplus cash to use Keynesian economics. China remains the only actual example of Keynes theories.

Inventories May Have Dropped, But Crude Oil Prices Still Constrained by Natural Gas Oversupply

Fri, 18 Sep 2009 12:36:31 -0400

Please explain the link from Crude Oil to Natural Gas. Other than some trend lines, what is the actual link? What current use of crude is easy to transfer to natural gas with minimal investment? Just like Stefan, I wonder why so many investors and investment talk treats these two fuel sources as interchangeable. Other than a BTU equivalency, not sure there is any real market factors that would make them correlate. Coal also has a BTU rating, but I don't notice folks predicting price of coal based on price of oil...

3 'Wonderful Dividend Stocks at a Fair Price'

Fri, 18 Sep 2009 12:29:24 -0400

Do you ever consider higher risk stocks? Would be interesting to see what you might consider as future buys, but currently not paying or recently lowered payout companies that should recover in the near term (6-12 months). This is a riskier effort, but one that could proivde upside on the price when a pick regains its payout.

Economics and Its Discontents

Mon, 14 Sep 2009 09:22:11 -0400

Part of the problem is that we have never followed the Keynesian side of economics. China's recent injection of "on hand" capital is really the first chance we have to see what might happen if we really took some of the excess and saved it until there was an economic downturn. I am sure Keynes would not have seen this as the first true test of his theory. We have spent billions during this and previous recessions, but we have never really performed the asset build within the government during the good times to really test the Keynesian side of econimics. Check back in a year or so and then we can compare the actual results of China's recovery with the Keynesian theories.

Oil and Natural Gas: Ratio Explodes in 2009

Thu, 27 Aug 2009 16:21:07 -0400

I completely agree with manya05

Kurt Wulff published an article back when oil was 150 BBL, saying NG would soon be at $20, Cramer calling for buys on NG during the oil spike due to the ratio.

Bottome line - they are not interchangeable - relationship does not work. Why keep beating the incorrect assumption that they are linked?

If you would like stock recommendations during a low cycle in NG, why not take a look at those that are underperforming their cash flow - due mostly to factors external to their business. BBEP is an example of a company with majority of NG (and oil) production hedged until 2011 - but has been beaten down of late due to lower NG prices (which do not hurt their cash flow) and temporary loan covenant issues that do not allow for paying dividends due to institutions lowering their available credit. BBEP has no credit problems, repaying outstanding loan balances every quarter, and plenty of cash to spare. Would suggest this one as a double - especially when they restart dividends in the not so distant future.

How PHEVs and EVs Will Sabotage America's Drive for Energy Independence

Wed, 26 Aug 2009 13:12:18 -0400

Gas - C5H12

Carbon Atomic weight 12

Drop 2 Hydrogen, replace each remaining Hydrogen (Atomic weight 1) with one Oxygen (Atomic Weight 16) during the burn.

Net result molecule of atomic weight of 72 replaced with 5 molecules of CO2 with atomic weight of 44 - total of 220

~3 times the begining weight of gasoline

How PHEVs and EVs Will Sabotage America's Drive for Energy Independence

Wed, 26 Aug 2009 11:52:44 -0400

I do agree with John - this perspective is something that must be considered, especially with the limited supplies of rare earth minerals for building newer batteries, and implications on oil consumption.

Another way to look at this question is how can we reduce/eliminate the 9.2 Million barrels of oil import per day, with gas demand approximately 9.1 Million barrels per day. Without maximizing our resources to cut the most use, we will have a hard time eliminating imported oil.

Mexico's Declining Oil Production: Clarion Call for Cantarell

Tue, 25 Aug 2009 11:31:11 -0400

I love how someone always comments against Electric cars with the question of "where do you get your electricity". There is always a down side to everything, but would the fanatics in the room please quit trying to battle everything? We need to start somewhere, and cutting gas usage & petroleum imports looks like a really good place to start. I would say that replacing electric generation with greener alternatives is easier than replacing gas with "greener" gas.

Think Wind, think solar, better batteries, ultra capicators form Maxwell Technologies, recycle for energy by Global Resources Corp, wave and tide generators, etc.

If you have some better suggestions - please provide them.

Penn West: Distribution at Risk

Fri, 14 Aug 2009 08:33:18 -0400

Purely speculation from the analyst. Even if they double their capital program, the funds flow would easily cover this and the current level of distribution. Div cut would only be based on lower oil/NG prices in the coming months. Current oil price move to upside with pending (hopefully) recovery should assist in funds flow as well.

Has the Housing Market Hit Bottom?

Thu, 30 Jul 2009 16:36:06 -0400

Sometimes it is good to live in a quiet neighborhood. While states like Florida, California, Nevada have dramatic declines (matching dramatic growth of last years before the fall) we in middle America have fairly low level of complications from housing. Higher(>$350K) range homes are very slow moving, but reasonable priced homes are moving fine. Our bigger problem is the unemployment from the Auto bust - which may have more effect on our future housing than current supply and demand considerations.

The Bull Case for EnCana

Tue, 05 May 2009 08:48:00 -0400

Encana is a Canadian Company - not a U.S. company.

MDU Resources: Obama's Kind of Company

Thu, 18 Dec 2008 08:22:06 -0500

I have never understood how the Street's "smart" folks have never looked beyond the name for this stock. Funniest example was Cramer type casting this stock as a basic utility and not liking it, while at the same time puching natrual gas.....

Good to know what you are looking at rather than just looking at the name.

Lehman Brothers Take-over: Implications for Financials

Mon, 25 Aug 2008 12:28:01 -0400

Just fluff - no analysis, something a 5th grader would provide for a school report.

Twenty Dollar Natural Gas in Sight

Tue, 29 Jul 2008 10:42:16 -0400

Love the ratio game with NG, but until NG and oil are both consumed in the same end use, not sure why this is as significant as the pundits would have us believe,