Caterpillar Partnership With Westport Will Provide A Competitive Advantage [View article]
Steve, thanks for your comments. We do agree on many points. If you go back and review what I have written in most of my comments, my bone of contention is that Westport Innovations (WPRT) IS NOT a natural gas engine manufacturer, as may bloggers and analyst have all written the company to be. THAT ia a BIG LIE.
Let's be honest with ourselves. WPRT is nothing but a natural gas engine fuel system manufacturer that is looking for diesel engines to convert and put their hardware on. That is the only way they can sell their products. In your words, it is a "nuts and bolts" manufacturer.
WPRT is not any different from companies like Dana who produce axles or Twin Disc who produce marine transmissions. These manufacturers need to befriend vehicle manufacturers and engine manufacturers to convince them to engineer and use their products with their vehicle or engine products.
That is why WPRT has been scrambling to establish "alliances" with all the engine OEMs like Weichai, Cummins and Caterpillar so that their hardware can be engineered into the products of these engine manufacturers and hopefully offered to truck OEMs and end users as alternatives to diesel engines.
Some people call this a "capital efficient" business model, which to me is just a fancy way of saying that they are using OPM (other people's money) to achieve their own objectives of selling their hardware to the engine OEM's. By calling WPRT a "leading natural gas engine manufacturer" people like WPRT themselves and Ruling the Markets and other "analysts" have already discredited themselves for being dishonest in the way they present the company to the investing community. Let's stop calling a pussy cat a jaguar or a tiger!
And remember, engine manufacturers like Cummins and Caterpillar are no suckers. When they are footing the bill to finance research and development to engineer WPRT's fuel systems into their own products, you can be sure they wil not pay a premium price for WPRT's products. Yes, WPRT will be able to make some money per unit of fuel system sold to these OEMs, but believe me it will not be much. I know this because I know how manufacturers like Cummins, Caterpillar, Ford and GM negotiate prices with their suppliers.
Let me give you an example. Years ago when I used to work for a company not in the equipment industry, a company that produces premium quality consumer products. We had people like Dodwell and Mark & Spencer of the U.K and JC Penney, Sears and Walmart knocking on our doors wanting to talk to us. They all wanted us to produce similar products for them but in their own brand names and to their own specifications. And they knew exactly how much it would cost us to produce the products for them and what kind of materials have to be used. They even showed us their costing sheets.
They all wanted to make use of our facilities which was equipped with the most modern machinery and staffed with well-trained personnel for that kind of job. The catch was, they will only allow us to make no more than 5% gross margin on anything we sell to them. We said thanks but no thanks. We can produce all the products we can sell at much higher profit margins. Fortunately we are not like WPRT. We do not depend on these big box marketers to sell our stand-alone products.
Oh, by the way, my protective stops have already been triggered on my WPRT short positions and I was able to make some profit. Thanks to WPRT and all the suckers out there.
By the way, how do you keep LNG fuel cool enough when installed in an on-highway truck traveling through the hot environment in, say, New Mexico? I know the tanks have to be insulated, but come on, no amount of insulation is perfect.
Westport Innovations: June Natural Gas Pricing Update Confirms Investment Thesis [View article]
Yes, there is definitely a big differential between the prices of diesel fuel and natural gas today, but I think that differential will narrow going forward when and if natural gas demand goes up and diesel and gasoline demand goes down.
The present situation will only be temporary, but for how long only God knows. Wait until companies start to export LNG in earnest and in significant qualtities and see how quickly the price of natural gas fuels for the domestic markets will rise. The situation will be the same for both the USA and Canada.
RIght now there is a big differential between prices of diesel and natural gas engines as well. The selling price differential is really much bigger than the actual differential in manufacturing costs for basic models of the same engine families but with different power and torque output because these fuels have different heating values or power densities. The extra tag-along equipment required for using LNG further inflates the price of LNG-powered natural gas engines.
Westport Innovations: June Natural Gas Pricing Update Confirms Investment Thesis [View article]
Cigarette and tobacco smokes are also carcinogenic. And alcohol consumption is no less bad than being carcinogenic. Do you know if natural gas is carcinogenic when ingested in large quantities?
Caterpillar Partnership With Westport Will Provide A Competitive Advantage [View article]
Steve,
Seriously speaking, WPRT can be a good stock that is worth investing for the long term if natural gas in the form of LNG takes off as a transportation fuel in North America, but that won't happen for a while. In other parts of the world, as I have commented in another blog, there are millions of vehicles large and small running on CNG on city streets and on highways.
There are well-developed natural gas (and LPG) fuel service stations alongside regular gasoline and diesel fuel service stations to service the needs of these vehicles. Conversions from gasoline engines to use CNG is normally quite inexpensive, starting from about US$1,300 and up depending on vehicle type and size, and this price includes everything necessary including either barrel-shaped or doughnut-shaped fuel tanks installed.
NOBODY uses WPRT products. It's not even heard of. The popular conversion kits come from Italy and other European countries as well as Japan and Korea. They are all well-proven and the conversion jobs comes with at least a 1-year warranty.
CNG is widely available for trabsportation everywhere, but LNG is a different story. LNG is only available for use in utility power generation and as feedstock for petro-chemical industries. Using CNG reduces fuel costs by up to 70% for typical vehicles. That is why all taxicabs use CNG as fuel. And car manufacturers are already offering CNG engine options in new vehicles that they sell, from small Japanese sub-compacts to the biggest European and Japanese on-highway trucks. Sorry, but American car and truck manufacturers are way behind the curve when it comes to natural gas engine offerings in their vehicles. The CNG train has already left the station a long time ago, my friend.
Caterpillar Partnership With Westport Will Provide A Competitive Advantage [View article]
Good for you Steve. We need lots of people like you to make a lot of money. I started to short WPRT at $49 because it was incredibly overpriced and bought a lot more on the way down to $25, which was still way overpriced for a company that has been losing money since DAY 1.
I happily bought back everything to cover my short positions at about $23. Now all I have is dry gun powder ready for another over-hyped stock to short. I started shorting WPRT again just yesterday at $32.50 and intend to cover my short positions when the stock price falls below $18 in the near future.
Please continue to buy long so that I can short a lot more! Ha-Ha-Ha. There is a sucker born every second! This stock is driven by news and hot air and nothing more.
Westport Innovations: A Good Play For Those Willing To Take On A Bit Of Risk [View article]
WPRT is a purely speculative stock at the moment. Show me the money, not projections and guesses which are not guaranteed to happen. Those promoting the stock will always come up with rosy forecasts.
Caterpillar Partnership With Westport Will Provide A Competitive Advantage [View article]
If you read the latest CAT annual report and other statements in CAT's website you will note that the Chinese market for construction equipment, mining machinery and diesel/natural gas engines accounts for only a few percentage of CAT's total sales of over $60 Billion in 2011. Therefore, the current slowdown in China will not affect CAT's overall performace much. Whether China's GDP growth rate slows to 7.5% or less in 2012 is not very material. The slowdown is already here and will continue for some time.
However, we definitely have to consider the slowdown in other areas of the world like Europe and the Americas including the U.S. and Canada when trying to determine whether CAT is a good investment or not at this moment. Review CAT's stock performance on a weekly and monthly basis over many years and you can see how cyclical it is historically.
Caterpillar Partnership With Westport Will Provide A Competitive Advantage [View article]
Since when did Westport Innovations became a "global leader" in natural gas powered engines? Please show us where their factory or factories are located where they actually physically manufacture natural gas engines of their own design (not CAT or Cummins or Weichai, etc.) in a production and assembly line or lines.
Too many talking heads and bloggers are perpetrating this baloney and hogwash about Westport Innovations being a leader in natural gas engines so they can pump up the price of WPRT and unload it on unsuspecting individual investors. All WPRT does is produce natural gas fuel systems to convert diesel engines to use natural gas as fuel.
WPRT is a fuel system manufacturer, NOT a leader in natural gas engines. The engine OEMs like CAT, Cummins and Weichai are paying the costs to engineer and fit those fuel systems onto their engines. Because of this, the engine OEMs will definitely limit the amount of profit that WPRT can make from selling their fuel systems.
If WPRT plays hard ball, the engine OEMs certainly have the technical capability of designing and engineering their own HPDI natural gas fuel systems for their own engines regardless of any existing WPRT patents. These are electro-mechanical fuel systems and not rocket science and there are ways to go around those patents.
Perhaps in the far future the company may qualify as an investment-grade stock but a present it has no proft to show and will continue to swim in red ink for the forseeable future. WPRT is therefore just another high-beta speculative stock right now.
Investing In The Rise Of Natural Gas Vehicles [View article]
I do not know what is the problem in the USA and Canada regarding natural gas fueled vehicles. If you travel to Europe and Asia you can see many cars and trucks on the road operating on CNG/gasoline dual fuel systems.
Almost all taxicabs in many developing countries are now powered by either LPG (older vehicles) or CNG (newer vehicles). Many private cars and vans as well as pick-up trucks use CNG as fuel. Even vocational and heavy-duty trucks run on CNG inter-city and intra-city. New LPG and CNG refuelling stations are popping up everywhere because demand for these fuel is growing very fast.
None of these were the results of government subsidies. And alll these despite the fact that natural gas prices in these countries are 5 to 6 times those in North America. It's all happening because gasoline and diesel fuels have become too expensive compared to LPG and natural gas.
Wake up, Americans and Canadians. You thought you were among the most advanced countries in the world, didn't you? Not any more. While your government officials were sleeping, other countries have leaf-frogged you and the natural gas train has already left the station in many countries.
Westport Innovations Made A 23% Gain In 10 Days - Now's Your Second Chance [View article]
TruffelPig,
Thanks. That was what I thought to be the real reason behind the big jump in price because short seller's trailing stops were taken out sequentially as the price of the stock moved up. The big price jump is not just because of the announcement since nothng has really changed for the foreseeable future. And the volume was 3x normal which tells me a lot about short-covering activities.
SodaStream Consumables Tell You All You Need To Know [View article]
Who are SodaStream's largest competitors both in North America and worldwide? How are they doing businesswise compared to SodaStream?
The author wrote that SodaStream's sales of consumables have shown significant increase in recent years? Who are the major competitors for these consumables in the market?
There are a lot of juice and flavor brands available than can be used in lieu of the company's products, and I am sure the CO2 gas cartridges can also be refilled by other than the company's authorized outlets.
The company's products do not require rocket science to develop and market and therefore the barriers to entry is relatively low.
Westport Innovations Made A 23% Gain In 10 Days - Now's Your Second Chance [View article]
Tuesday's news about the new Caterpillar-Westport Agreement is good for both companies, most likely much better for CAT than for WPRT. Why? CAT is the true global leader in both diesel and natural gas engine industry, products that they have been selling to all industries requiring engine power for a long, long time.
With the addition of the High Pressure Direct Injection (HPDI) LNG fuel system option for their existing natural gas engine product line, they are in a strong position to take advantage of the emerging opportunities for LNG-fueled natural gas engines. Historically, they have been very successful in selling their well-proven and time-tested CNG-fueled natural gas engines into many applications worldwide. And now, within 5 years as the new announcement mentioned, they will be in a position to offer their customers the option to use the denser (thus more powerful) LNG-fueled version.
Granted, engines equipped with the LNG fuel system will no be cheap by any means compared to the existing CNG fueled engines but some customers may still choose to buy the more expensive configuration because of specific application requirements (e.g. limited available space but needing higher horsepower and torque) . These translate to incrememtal sales and revenues for CAT.
As for WPRT, they will get to supply CAT with components of their HPDI fuel injection system and get a share of profits from these sales with every CAT LNG natural gas engine sold to CAT's customers. But remember, the fuel system accounts for only a small percentage of the total price of the engine (most likely less than 10% to 15%), so WPRT's share of the profits that can be derived from their sales will be rather limited.
To me, this does not justify the sudden 21.33% surge in WPRT's stock price compared to the 0.47% rise in CAT's stock price. Don't let the euphoria surrounding this knee-jerk reaction to the announcement influence your investment decision. WPRT is still bleeding in their bottom line and will continue to do so until the market for LNG truck and other natural gas engines develop momentum to sustain ther profitability with sales of their fuel systems in high enough volumes.
WPRT is NOT a natural gas engine manufacturer by any means. They are just a fuel system manufacturer hoping to sell their products to engine OEMs in big volumes sometime in the future. Meanwhile, CAT and CMI are much better bets for companies that can profitably capitalise on the emerging LNG natural gas engine opportunities.
Canadian Banks: Is Now The Time To Get Out While You Still Can? [View article]
I assume the author is a Canadian who lives in Canada or he would not have a good insight into how Canadian banks operate in the real estate mortage lending market.
Unlike in America, Canadians buying real estates are required to put up a down payment in real money. How much depends on the appraised value of the property in question as well as the documented monthly income of the borrowers (employer's certificate or income tax returns).
Total mortgage loan usually do not exceed 80% of the appraised value of the property to maintain a margin of safety for the banks. What is more restrictive is monthly mortgage payments are not allowed to exceed 30% of the borrower's gross monthly income. This is a limiting factor that is used to calculate the amount of down payment required to be put up. If one does not have money forget about buying a dream house in Canada. Buying a dream house is not a birth right and Canadian legislators are a lot smarter and more sensible then their American counterparts.
Personal life insurance coverage for the borrower is required (paid for by the borrower) with the lender being the beneficiary should the borrower pass away before the mortgage is paid off. Unemployment insurance is optional which covers the mortgage payments for a fixed number of months in case the borrower becomes involuntarily unemployed (laid-off). Again, the borrower has to pay for this coverage and the cost is not cheap.
In case of dlinquency in paying mortgage payments to the lender. the lender can foreclose on the property and commence legal procedures to recover the outstanding loan amount from the borrower very quickly. No if's and no but's. Each party knows exactly what are their responsibilities in the transaction, which are spelled out fully in the contract documents.
I would therefore like to ask the author where he sees the risks are for the lenders under the above circumstances. The banks may lose money from some of their other businesses in the course of normal business, but I do not see them losing money in the residential mortgage lending business. Canadian banks are no dummies, especially the Big 5 chartered banks. And the Canadian Government is pretty strict in regulating the banking industry nowadays after learning from their mistakes in the past.
One last thing, talking about Chinese investors in Canadian properties. You will be surprised that most of the Chinese buyers of Canadian (and US) properties pay cash up front and have no need to borrow money from banks. Don't ask how they got their money. It is common knowledge among the local Chinese communities why these newcomers from China or elsewhere have so much cash.
Chinese are known to be ardent savers. Recent news I heard indicate that the average income earner in China saves up to 40% of his or her yearly income. Remember, there are no unemployment benefits in China or the rest of Asia for that matter.
When one sells a small apartment in Beijing, Shanghai, Guangzhou, Hong Kong, Taipei or Singapore these days, he or she can easily afford to buy a big detached house in Canada or the U.S. with the proceeds. Yes, property prices are that expensive in many Asian countries and city states. If you think property prices in Vancouver and Toronto are expensive, think again.
I would not be worried about Canadian banks being adversely affected by falling property prices for their existing mortgage loan portfolios. But new mortgage loan business volume will suffer when real estate prices suffer a setback, as they definitely will because the property markets in Vancouver, Toronto and even Calgary are all in a big bubble right now, and to a lesser extent this is also true in other areas around the country.
More QE = more money printing = more currency depreciation in purchasing power = higher gold and precious metals prices = more inflation and misery down the road for all Americans in Main Street.
More QE will only go to prop up the evil bankers who willl use it to get into more risky derivative trades and more highly leveraged gambling with other people's money for personal gains rather than loan the money out to the people who really need the funds for their business survival.
But then again Bernanke and Company thinks that Americans can eventually borrow their way to prosperity. Who dares to argue against that fallacy among the sheeple of America? There is only one way this circus will end, and that is default by the US Government on it's massive and unsustainable sovereign debt and not paying it's debt ever.
Is it any wonder that creditors want out by using their daily depreciating dollars to buy real assets like farm land, agriculturals products, oilfields, natural gas fields, gold and silver mines, uranium mines, coal mines, etc.? And who is to blame for all these? Ask Ron Paul, Porter Stansberry, Peter Schiff and others if anyone wants to know.
The Greeks, The Americans And The Economic Cliff [View article]
jrkib8,
Have it your way. Let's just agree to disagree. In the end the U.S.A. will fall just like Babylon, Greece, Rome, and others before it because of widespread political corruption and deteriorating moral character of the population at large and it's currency will become worthless as it continue to print money out of worthless paper to support it's profigate lifestyle. The rise and fall of nations continue in cycles like clockwork.
Caterpillar Partnership With Westport Will Provide A Competitive Advantage [View article]
Let's be honest with ourselves. WPRT is nothing but a natural gas engine fuel system manufacturer that is looking for diesel engines to convert and put their hardware on. That is the only way they can sell their products. In your words, it is a "nuts and bolts" manufacturer.
WPRT is not any different from companies like Dana who produce axles or Twin Disc who produce marine transmissions. These manufacturers need to befriend vehicle manufacturers and engine manufacturers to convince them to engineer and use their products with their vehicle or engine products.
That is why WPRT has been scrambling to establish "alliances" with all the engine OEMs like Weichai, Cummins and Caterpillar so that their hardware can be engineered into the products of these engine manufacturers and hopefully offered to truck OEMs and end users as alternatives to diesel engines.
Some people call this a "capital efficient" business model, which to me is just a fancy way of saying that they are using OPM (other people's money) to achieve their own objectives of selling their hardware to the engine OEM's. By calling WPRT a "leading natural gas engine manufacturer" people like WPRT themselves and Ruling the Markets and other "analysts" have already discredited themselves for being dishonest in the way they present the company to the investing community. Let's stop calling a pussy cat a jaguar or a tiger!
And remember, engine manufacturers like Cummins and Caterpillar are no suckers. When they are footing the bill to finance research and development to engineer WPRT's fuel systems into their own products, you can be sure they wil not pay a premium price for WPRT's products. Yes, WPRT will be able to make some money per unit of fuel system sold to these OEMs, but believe me it will not be much. I know this because I know how manufacturers like Cummins, Caterpillar, Ford and GM negotiate prices with their suppliers.
Let me give you an example. Years ago when I used to work for a company not in the equipment industry, a company that produces premium quality consumer products. We had people like Dodwell and Mark & Spencer of the U.K and JC Penney, Sears and Walmart knocking on our doors wanting to talk to us. They all wanted us to produce similar products for them but in their own brand names and to their own specifications. And they knew exactly how much it would cost us to produce the products for them and what kind of materials have to be used. They even showed us their costing sheets.
They all wanted to make use of our facilities which was equipped with the most modern machinery and staffed with well-trained personnel for that kind of job. The catch was, they will only allow us to make no more than 5% gross margin on anything we sell to them. We said thanks but no thanks. We can produce all the products we can sell at much higher profit margins. Fortunately we are not like WPRT. We do not depend on these big box marketers to sell our stand-alone products.
Oh, by the way, my protective stops have already been triggered on my WPRT short positions and I was able to make some profit. Thanks to WPRT and all the suckers out there.
By the way, how do you keep LNG fuel cool enough when installed in an on-highway truck traveling through the hot environment in, say, New Mexico? I know the tanks have to be insulated, but come on, no amount of insulation is perfect.
Westport Innovations: June Natural Gas Pricing Update Confirms Investment Thesis [View article]
The present situation will only be temporary, but for how long only God knows. Wait until companies start to export LNG in earnest and in significant qualtities and see how quickly the price of natural gas fuels for the domestic markets will rise. The situation will be the same for both the USA and Canada.
RIght now there is a big differential between prices of diesel and natural gas engines as well. The selling price differential is really much bigger than the actual differential in manufacturing costs for basic models of the same engine families but with different power and torque output because these fuels have different heating values or power densities. The extra tag-along equipment required for using LNG further inflates the price of LNG-powered natural gas engines.
Westport Innovations: June Natural Gas Pricing Update Confirms Investment Thesis [View article]
Caterpillar Partnership With Westport Will Provide A Competitive Advantage [View article]
Seriously speaking, WPRT can be a good stock that is worth investing for the long term if natural gas in the form of LNG takes off as a transportation fuel in North America, but that won't happen for a while. In other parts of the world, as I have commented in another blog, there are millions of vehicles large and small running on CNG on city streets and on highways.
There are well-developed natural gas (and LPG) fuel service stations alongside regular gasoline and diesel fuel service stations to service the needs of these vehicles. Conversions from gasoline engines to use CNG is normally quite inexpensive, starting from about US$1,300 and up depending on vehicle type and size, and this price includes everything necessary including either barrel-shaped or doughnut-shaped fuel tanks installed.
NOBODY uses WPRT products. It's not even heard of. The popular conversion kits come from Italy and other European countries as well as Japan and Korea. They are all well-proven and the conversion jobs comes with at least a 1-year warranty.
CNG is widely available for trabsportation everywhere, but LNG is a different story. LNG is only available for use in utility power generation and as feedstock for petro-chemical industries. Using CNG reduces fuel costs by up to 70% for typical vehicles. That is why all taxicabs use CNG as fuel. And car manufacturers are already offering CNG engine options in new vehicles that they sell, from small Japanese sub-compacts to the biggest European and Japanese on-highway trucks. Sorry, but American car and truck manufacturers are way behind the curve when it comes to natural gas engine offerings in their vehicles. The CNG train has already left the station a long time ago, my friend.
Caterpillar Partnership With Westport Will Provide A Competitive Advantage [View article]
I happily bought back everything to cover my short positions at about $23. Now all I have is dry gun powder ready for another over-hyped stock to short. I started shorting WPRT again just yesterday at $32.50 and intend to cover my short positions when the stock price falls below $18 in the near future.
Please continue to buy long so that I can short a lot more! Ha-Ha-Ha. There is a sucker born every second! This stock is driven by news and hot air and nothing more.
Westport Innovations: A Good Play For Those Willing To Take On A Bit Of Risk [View article]
Caterpillar Partnership With Westport Will Provide A Competitive Advantage [View article]
However, we definitely have to consider the slowdown in other areas of the world like Europe and the Americas including the U.S. and Canada when trying to determine whether CAT is a good investment or not at this moment. Review CAT's stock performance on a weekly and monthly basis over many years and you can see how cyclical it is historically.
Caterpillar Partnership With Westport Will Provide A Competitive Advantage [View article]
Too many talking heads and bloggers are perpetrating this baloney and hogwash about Westport Innovations being a leader in natural gas engines so they can pump up the price of WPRT and unload it on unsuspecting individual investors. All WPRT does is produce natural gas fuel systems to convert diesel engines to use natural gas as fuel.
WPRT is a fuel system manufacturer, NOT a leader in natural gas engines. The engine OEMs like CAT, Cummins and Weichai are paying the costs to engineer and fit those fuel systems onto their engines. Because of this, the engine OEMs will definitely limit the amount of profit that WPRT can make from selling their fuel systems.
If WPRT plays hard ball, the engine OEMs certainly have the technical capability of designing and engineering their own HPDI natural gas fuel systems for their own engines regardless of any existing WPRT patents. These are electro-mechanical fuel systems and not rocket science and there are ways to go around those patents.
Perhaps in the far future the company may qualify as an investment-grade stock but a present it has no proft to show and will continue to swim in red ink for the forseeable future. WPRT is therefore just another high-beta speculative stock right now.
Investing In The Rise Of Natural Gas Vehicles [View article]
Almost all taxicabs in many developing countries are now powered by either LPG (older vehicles) or CNG (newer vehicles). Many private cars and vans as well as pick-up trucks use CNG as fuel. Even vocational and heavy-duty trucks run on CNG inter-city and intra-city. New LPG and CNG refuelling stations are popping up everywhere because demand for these fuel is growing very fast.
None of these were the results of government subsidies. And alll these despite the fact that natural gas prices in these countries are 5 to 6 times those in North America. It's all happening because gasoline and diesel fuels have become too expensive compared to LPG and natural gas.
Wake up, Americans and Canadians. You thought you were among the most advanced countries in the world, didn't you? Not any more. While your government officials were sleeping, other countries have leaf-frogged you and the natural gas train has already left the station in many countries.
Westport Innovations Made A 23% Gain In 10 Days - Now's Your Second Chance [View article]
Thanks. That was what I thought to be the real reason behind the big jump in price because short seller's trailing stops were taken out sequentially as the price of the stock moved up. The big price jump is not just because of the announcement since nothng has really changed for the foreseeable future. And the volume was 3x normal which tells me a lot about short-covering activities.
SodaStream Consumables Tell You All You Need To Know [View article]
The author wrote that SodaStream's sales of consumables have shown significant increase in recent years? Who are the major competitors for these consumables in the market?
There are a lot of juice and flavor brands available than can be used in lieu of the company's products, and I am sure the CO2 gas cartridges can also be refilled by other than the company's authorized outlets.
The company's products do not require rocket science to develop and market and therefore the barriers to entry is relatively low.
Westport Innovations Made A 23% Gain In 10 Days - Now's Your Second Chance [View article]
With the addition of the High Pressure Direct Injection (HPDI) LNG fuel system option for their existing natural gas engine product line, they are in a strong position to take advantage of the emerging opportunities for LNG-fueled natural gas engines. Historically, they have been very successful in selling their well-proven and time-tested CNG-fueled natural gas engines into many applications worldwide. And now, within 5 years as the new announcement mentioned, they will be in a position to offer their customers the option to use the denser (thus more powerful) LNG-fueled version.
Granted, engines equipped with the LNG fuel system will no be cheap by any means compared to the existing CNG fueled engines but some customers may still choose to buy the more expensive configuration because of specific application requirements (e.g. limited available space but needing higher horsepower and torque) . These translate to incrememtal sales and revenues for CAT.
As for WPRT, they will get to supply CAT with components of their HPDI fuel injection system and get a share of profits from these sales with every CAT LNG natural gas engine sold to CAT's customers. But remember, the fuel system accounts for only a small percentage of the total price of the engine (most likely less than 10% to 15%), so WPRT's share of the profits that can be derived from their sales will be rather limited.
To me, this does not justify the sudden 21.33% surge in WPRT's stock price compared to the 0.47% rise in CAT's stock price. Don't let the euphoria surrounding this knee-jerk reaction to the announcement influence your investment decision. WPRT is still bleeding in their bottom line and will continue to do so until the market for LNG truck and other natural gas engines develop momentum to sustain ther profitability with sales of their fuel systems in high enough volumes.
WPRT is NOT a natural gas engine manufacturer by any means. They are just a fuel system manufacturer hoping to sell their products to engine OEMs in big volumes sometime in the future. Meanwhile, CAT and CMI are much better bets for companies that can profitably capitalise on the emerging LNG natural gas engine opportunities.
Canadian Banks: Is Now The Time To Get Out While You Still Can? [View article]
Unlike in America, Canadians buying real estates are required to put up a down payment in real money. How much depends on the appraised value of the property in question as well as the documented monthly income of the borrowers (employer's certificate or income tax returns).
Total mortgage loan usually do not exceed 80% of the appraised value of the property to maintain a margin of safety for the banks. What is more restrictive is monthly mortgage payments are not allowed to exceed 30% of the borrower's gross monthly income. This is a limiting factor that is used to calculate the amount of down payment required to be put up. If one does not have money forget about buying a dream house in Canada. Buying a dream house is not a birth right and Canadian legislators are a lot smarter and more sensible then their American counterparts.
Personal life insurance coverage for the borrower is required (paid for by the borrower) with the lender being the beneficiary should the borrower pass away before the mortgage is paid off. Unemployment insurance is optional which covers the mortgage payments for a fixed number of months in case the borrower becomes involuntarily unemployed (laid-off). Again, the borrower has to pay for this coverage and the cost is not cheap.
In case of dlinquency in paying mortgage payments to the lender. the lender can foreclose on the property and commence legal procedures to recover the outstanding loan amount from the borrower very quickly. No if's and no but's. Each party knows exactly what are their responsibilities in the transaction, which are spelled out fully in the contract documents.
I would therefore like to ask the author where he sees the risks are for the lenders under the above circumstances. The banks may lose money from some of their other businesses in the course of normal business, but I do not see them losing money in the residential mortgage lending business. Canadian banks are no dummies, especially the Big 5 chartered banks. And the Canadian Government is pretty strict in regulating the banking industry nowadays after learning from their mistakes in the past.
One last thing, talking about Chinese investors in Canadian properties. You will be surprised that most of the Chinese buyers of Canadian (and US) properties pay cash up front and have no need to borrow money from banks. Don't ask how they got their money. It is common knowledge among the local Chinese communities why these newcomers from China or elsewhere have so much cash.
Chinese are known to be ardent savers. Recent news I heard indicate that the average income earner in China saves up to 40% of his or her yearly income. Remember, there are no unemployment benefits in China or the rest of Asia for that matter.
When one sells a small apartment in Beijing, Shanghai, Guangzhou, Hong Kong, Taipei or Singapore these days, he or she can easily afford to buy a big detached house in Canada or the U.S. with the proceeds. Yes, property prices are that expensive in many Asian countries and city states. If you think property prices in Vancouver and Toronto are expensive, think again.
I would not be worried about Canadian banks being adversely affected by falling property prices for their existing mortgage loan portfolios. But new mortgage loan business volume will suffer when real estate prices suffer a setback, as they definitely will because the property markets in Vancouver, Toronto and even Calgary are all in a big bubble right now, and to a lesser extent this is also true in other areas around the country.
Global Economic Descent Continues [View article]
More QE = more money printing = more currency depreciation in purchasing power = higher gold and precious metals prices = more inflation and misery down the road for all Americans in Main Street.
More QE will only go to prop up the evil bankers who willl use it to get into more risky derivative trades and more highly leveraged gambling with other people's money for personal gains rather than loan the money out to the people who really need the funds for their business survival.
But then again Bernanke and Company thinks that Americans can eventually borrow their way to prosperity. Who dares to argue against that fallacy among the sheeple of America? There is only one way this circus will end, and that is default by the US Government on it's massive and unsustainable sovereign debt and not paying it's debt ever.
Is it any wonder that creditors want out by using their daily depreciating dollars to buy real assets like farm land, agriculturals products, oilfields, natural gas fields, gold and silver mines, uranium mines, coal mines, etc.? And who is to blame for all these? Ask Ron Paul, Porter Stansberry, Peter Schiff and others if anyone wants to know.
The Greeks, The Americans And The Economic Cliff [View article]
Have it your way. Let's just agree to disagree. In the end the U.S.A. will fall just like Babylon, Greece, Rome, and others before it because of widespread political corruption and deteriorating moral character of the population at large and it's currency will become worthless as it continue to print money out of worthless paper to support it's profigate lifestyle. The rise and fall of nations continue in cycles like clockwork.