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  • Looking Beyond The Obvious: Critical Thinking And Investment Decisions (Part 1) [View article]
    No blog updates since July 26. No comments since July 13.

    Nothing but crickets for 7+ weeks now. I wonder what happened?

    First and foremost, I hope everything is OK and there's not anything seriously wrong that's preventing him from posting, like health issues.

    I'm also kind of curious to see how his investments have fared over the interval given the volatile market conditions. If he was buying volatility, he might have done pretty well.
    Sep 15, 2015. 05:05 AM | 1 Like Like |Link to Comment
  • Fasten Your Seatbelt - Natural Gas Is Ready To Blast Off [View article]
    Thanks for all the work documenting your research in the nat gas space. I have come to a similar conclusion. Current nat gas prices should self-correct at some point.

    Here are a couple companies to consider for investing if you have a desire to buy into the beat down energy sector in hopes of brighter days going forward:

    ARLP: Big coal producer with increasing cash flow, an increasing dividend, and a current yield above 10%. Cash flow exceeds payout by 70%.

    USAC: Compression services provider to the pipeline/gas well industry. They are growing steadily and also yield around 10%. Recently increased their distribution.

    GLOP: LNG tanker provider. Long term contracts in place and more specialized ships on order. Yield around 9%.

    The prices on these companies are beaten down due to the energy sector issues, though their business performance is running smoothly. Be aware they are all MLPs and will have the usual issues associated with issuance of K-1 forms at tax time.

    Please do your own due diligence before investing. I'm not Warren Buffett and I might be proven wrong by Mr. Market. Understand what risks you are facing before committing your capital.
    Sep 4, 2015. 12:31 PM | 5 Likes Like |Link to Comment
  • These Are Future Dividend Champions, My Friends [View article]
    "I have been pondering lately whether I will produce a Top 40 DG Stocks for 2016. (I skipped 2015.) If I do, I am pretty sure that I will just do the Top 40 themselves and leave out the how-to-do-it portions, because the latter has become so extensive that it now deserves and requires a separate treatment." - DVK

    If my opinion counts for anything in the decision making process, I'd request that you leave the how-to material in. Even if you simply copy what was in the 2014 version verbatim, leave it in. That material is such a tremendous educational tool that I believe it is actually worth more than your list of 40 stocks (no offense intended). Your detailed explanation of DGI methods and principles is one of the best I've come across.

    Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for life.

    Corollary: Show a man Fish's CCC spreadsheet, and you help him find the premium DGI catches. :-)
    Sep 2, 2015. 07:50 PM | 9 Likes Like |Link to Comment
  • Why I Still Own Gold Resource Corporation [View article]
    "GORO is a silver zinc mine....with residual gold." - IPDaily69

    What difference does that make if GORO is profitable? As Shakespeare would say, "A rose by any other name would smell as sweet." They could be digging up fossilized dinosaur turds for all I care, as long as they're profitable.

    "Regarding Goro's financial position, ... Allow me to point you in the right direction. Go back and reexamine asset sales that have been funneled back into the treasury to artificially prop up the depletion that would have resulted." - IPDaily69

    Based on the recent quarterly balance sheets the "Property/Plant/Equipm... Total - Gross" category increased from $32.3 million to $55.7 million in the past year. They don't appear to be a net seller of 'assets'. In fact they have increased the value of their physical plant by 67%.

    Also in the past year:

    Their Current Liabilities have decreased from $17.9 million to $15.3 million.

    Their Total Long Term Debt has decreased from $1.6 million to $0.1 million.

    Their Total Liabilities have decreased from $22.4 million to $18.1 million.

    Shareholder Equity has increased from $89.0 million to $94.6 million.

    Sure the illegal work stoppage and the unexpected water issues reduced Q2 revenues by $5 million, but that's the sort of thing that happens when you run a complex business.

    Despite that revenue reduction of $5 million, GORO managed to hold Shareholder Equity constant over the quarter, reduce Liabilities by $4.3 million, and with only a $6.7 million reduction in assets. Backing out the "missing" $5 million leaves a 'loss' of liquid assets of only $1.7 million. That's a reasonable cost of eliminating $4.3 million of liabilities. Given the $21 million in cash sitting in the bank, that's hardly what a business person would consider a "tipping point" for complete failure going forward.

    Financial Statements:

    As for drilling, GORO has been working on expanding their resources too, with promising results. Check out their presentation:

    For a company which had a $5 million hole blown in their top line revenue by unexpected events, GORO has done a pretty good job keeping things running. They have almost no debt and $21 million in cash for operations goiing forward. When their revenue returns to normal, as it will, they'll be OK, IMHO.

    Disclosure: Long GORO and dripping.
    Sep 2, 2015. 07:07 PM | 3 Likes Like |Link to Comment
  • These Are Future Dividend Champions, My Friends [View article]
    I love Tractor Supply Co. There was a store in my hometown and I used to wander around inside while Christmas shopping over the holidays.

    Who wouldn't want to see a PTO log splitter for your tractor arrive in Santa's bag? Especially if you can get it on sale.
    Sep 1, 2015. 08:39 PM | 4 Likes Like |Link to Comment
  • How Dividend Reinvestments Will Increase My Cash Flow Over The Coming Year [View article]
    "Buy assets, collect cash from those assets, use it to purchase more assets. It's a virtuous circle." - DVK

    A virtuous circle ... kinda like a belt for your magic pants?

    Aug 31, 2015. 11:33 PM | 6 Likes Like |Link to Comment
  • These Are Future Dividend Champions, My Friends [View article]
    My recent investigations have led me to finding potential gems among the "discredited" energy sector. They're all MLPs and three of the four are not dependent on the price of the commodity they handle.

    ARLP - Growing distributable cash flow and low cost coal producer with 10+% yield and growing dividend. They're able to grow profits even at today's low coal prices. When coal prices recover they will really benefit.

    USAC - Compression services company in the gas industry with 10+% yield and growing dividend. Profits are not dependent on NG prices as the service they provide is needed to run current wells and pipelines.

    KNOP - Specialty oil tanker business for remote fields, again with the growing income and 10+% yield and increasing dividend. One of the top two providers with long term leases in place.

    GLOP - LNG tanker business, also with long term leases in place. Yielding 9+% and growing the dividend. FWIW, I love their symbol. LOL.

    For those who don't mind dealing with the K-1s at tax time, these MLPs are worth looking into, IMHO. They are some of the up-and-comers in the energy field. Potential Champions of tomorrow if they keep things going the way they are now.
    Aug 31, 2015. 07:36 PM | 2 Likes Like |Link to Comment
  • Liquidation Of Crowded Hedge Fund Energy Positions [View article]
    Good thought process. Find the gems that got tossed out with the garbage in the natural resources space.

    I picked up shares in USAC and KNOP at yield points over 10% recently. They are both solid and well run service companies in the oil/gas industry that continue to grow and reward shareholders despite the recent carnage among producers and the companies who supply them.

    Gas producers and pipelines will continue to lease and add compressors to their current and new assets from USAC.

    KNOP will continue to lease out their tankers in oil producing locations without access to pipelines or rail transport.

    It's only a matter of time before 'the crowd' realizes that these companies are grossly undervalued. Until then, I'll collect my 10+% payouts waiting for their prices to recover.
    Aug 27, 2015. 04:59 PM | Likes Like |Link to Comment
  • This Dividend Stock Yields Over 11%, Has 9 Straight Hikes And Just Raised Guidance [View article]
    Thanks for writing up an article on this growing stock. It looks like another gem amid the wreckage caused by the steep decline in energy prices.

    At first I thought you might be writing about ARLP, which is a similar story. I'll investigate and probably add some share of each before Mr. Market regains his senses.
    Aug 16, 2015. 01:35 PM | Likes Like |Link to Comment
  • Alliance Resource Partners: 11% Yield And 29 Consecutive Quarterly Distribution Increases [View article]
    I agree with the author, ARLP is priced in the "back up the truck" zone. I've picked up shares at simply crazy prices recently. A rebound will eventually happen, it's just a matter of time. Meanwhile I'm collecting 10.5% (and growing) dividends on my investment.
    Aug 14, 2015. 10:43 PM | 5 Likes Like |Link to Comment
  • The MnM Portfolio Supplement - It's Hard To Go Shopping When Nothing Is On Sale [View article]

    Most of the retiring coal plants are small and old. Even the government's own Annual Energy Outlook 2015 estimates that coal use will grow from 18 quadrillion Btu (925 million short tons) in 2013 to 19.0 quadrillion Btu (988 million short tons) in 2040.

    Coal is the lower cost means of generating power most of the time. NatGas generation is less expensive at prices below $4/mcf (which has occurred about 12% of the time since 2000).

    The EIA further estimates that “Coal-fired capacity declines from 304 GW in 2013 to 260 GW in 2040 in the Reference case, as a result of retirements and very few new additions."

    Clean Air regulations will surely weed out older plants, but it won't close them all. A drop of 40 GW from 304 GW over 27 years is less than 0.5% annually. Meanwhile ARLP will be selling the remaining coal fired plants coal, making profits, and rewarding shareholders.

    Again, the current price of ARLP is worth a look based simply on business performance going forward. Coal fired generation plants are going to be around for a long time to come.
    Aug 13, 2015. 11:14 AM | 1 Like Like |Link to Comment
  • The MnM Portfolio Supplement - It's Hard To Go Shopping When Nothing Is On Sale [View article]
    You might find ARLP interesting. It's crazy undervalued and worth investigating.
    Aug 13, 2015. 05:17 AM | Likes Like |Link to Comment
  • The Coal Industry Is Ready To Implode [View article]
    Articles like this one will be the ones identified as the contrarian evidence of a turning point in the coal mining industry, IMHO.

    Markets weed out inefficient or financially unsustainable producers over time. Today's currently overleveraged coal producers will suffer while the better-run companies use the opportunity to acquire more properties at discount prices, eventually making them viable producers.

    Disclosure: Long ARLP and AHGP, and likely to buy more at these bargain prices.
    Aug 10, 2015. 11:58 AM | 1 Like Like |Link to Comment
  • Gold Resource Corp.: Commentary On The Second Quarter Results [View article]
    Thanks for the update and taking the time to put all that information into a concise format so that it can be easily compared.

    It does appear that GORO had a rough 2Q, but despite the 'triple whammy' they managed to eke out a small profit. Any complex business needs to endure such rough patches if it plans to succeed. They seem to be doing the right things to overcome the hurdles that they encounter.

    Despite all the negatives, GORO has paid their dividends and only used $3+ million over the past year. They have enough cash to weather another 6 years under those conditions, and one might reasonably expect the 'whammies' to be resolved in much less time than that. The illegal strike is already over and the company is working to remedy the water issues in the current site and develop another mine site, which would reduce the importance of having their one mine site stop producing. Sadly, there's nothing the company can do to improve the prices of gold and silver, or the other metals they produce.

    I'm long GORO and dripping the dividend into more shares. I believe that the company will continue to improve as they work through the current issues.
    Aug 7, 2015. 09:31 AM | 3 Likes Like |Link to Comment
  • Avoiding The Endowment Effect: Should Mike Sell? [View article]
    "First off, I hope I'm not being presumptuous in assuming that I am the "noted DGI investor."" - Mike Nadel

    Perhaps the original post was missing a white space and intended to say 'not Ed' (which is easily verified by reviewing your profile - your name is NOT Ed).

    Once upon a time we had a 'notbob' around these parts, but he went legit and changed his name to Robert.

    Aug 2, 2015. 03:14 PM | Likes Like |Link to Comment