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  • Taking A Detour From Goldcorp  [View article]
    "do you know if GG or detour gold have any warrants in them? love to be able to make a long term investment in them and just forget about it." - chewy

    Why bother with warrants? Some of the junior mining stocks are priced so low that they function as long term options on the price of gold. And they never expire. Just be sure that they will manage to remain in business long enough to catch the wave when gold turns back up.
    Oct 4, 2015. 04:50 PM | Likes Like |Link to Comment
  • The Future Of Coal Companies  [View article]
    1) Grasping at straws? OK. Let's follow the bouncing ball of misinformation you use for supporting your 'conclusion':

    I pointed out that you mis-quoted the EPA claiming that 32% of ozone emissions sourced from coal fired plants.

    "According to the EPA, 32% of ozone emissions come from electricity generation." - Duane Bair

    What they actually said was different:

    "The electric power sector accounted for 32% of U.S. total greenhouse gas emissions in 2012." - EPA

    I then pointed out that factual error, which you then labelled as 'grasping at straws'. OK. Let's examine the 'straw' a little more closely:

    Components of "Greenhouse Gas" per the EPA:

    CO2 - Carbon Dioxide
    CH4 - Methane
    N2O - Nitrous Oxide (note this is NOT NOx)
    Flourinated Gases

    Golly gee. Don't see any NOx in that list. So how does your use of the above EPA quote regarding greenhouse gasses support implementing stricter Ozone regulations? None of the EPA's list of greenhouse gasses are Ozone precursors.

    Not only do you mis-quote the EPA's statement, you then compound the error by mis-using it to 'prove' coal is causing 12.5% of ozone:

    "The US Energy Information Administration statistics show that 39% of all electricity produced in the US comes from coal, therefore making coal account for 12.5% of all ozone emissions." - Duane Bair

    Every following conclusion you draw based on this line of reasoning is utter nonsense. Production of EPA's 'greenhouse gasses' has no impact on ozone concentrations in the atmosphere since those greenhouse gasses, by the EPA's own definition, aren't ozone precursors.

    Sorry, but hard science doesn't work the same way that Political Science does. You can't just point at some numbers on a website and then erroneously use them for something totally unrelated to make a talking point in support of your pre-determined conclusion. In hard science the facts have to support your conclusion.

    Your article would have more appropriate if you had instead focussed on the increased costs to the power generation industry from stricter NOx emission regulations. Electric Utilities are the businesses which will face the lion's share of added costs that result, not coal companies. Even power plants burning Natural Gas might be impacted, despite their inherently lower NOx emissions.

    2) How about looking at estimates for coal use? The US Energy Information Administration predicts coal use will increase by 1.6% in 2015. Hardly the sign of an imminent collapse for the coal industry. Lower coal prices will certainly force a restructuring to the benefit of lower cost producers, but it does not indicate their demise.
    Oct 4, 2015. 05:26 AM | 1 Like Like |Link to Comment
  • Taking A Detour From Goldcorp  [View article]

    I feel your pain on the gold stock front. I have a few shares that are also languishing, despite ongoing improvements in fundamentals. My plan is to stick it out for the eventual swing of the pendulum back to the mean.

    One possible stock for you to consider is Gold Resources (symbol: GORO). They are a small outfit operating in Mexico and expanding into Nevada. They are profitable and have a focus on returning earnings to shareholders. The stock currently yields about 4.4% (more than twice Goldcorp) and the business has a rock solid balance sheet with no long term debt and plenty of cash, despite building a new mill in 2013. They are sitting on very high grade ore and seem to do everything on what amounts to a "cash on the barrelhead" mindset. There is a lot of potential and they just keep working toward growing their operations, avoiding debt, and paying shareholders a cut of the proceeds.

    Company's Investor Relations site:

    The shares currently trade around $2.60 (USD), down from highs near $30 back in 2011. I picked my shares up at about $3.55 and have been DRIPing the dividends. I believe that the shares will do very well when the trend in gold and silver prices turn back up (eventually). When that happens is anyone's guess, but I believe that GORO will still be operating at that time and shareholders will benefit.

    Maybe that's beneficial for your plans, maybe not, but it's another option to evaluate that I feel is a good long term play that pays a little bit now and might pay a lot later on.
    Oct 3, 2015. 11:18 AM | Likes Like |Link to Comment
  • Quarterly Portfolio Review - So Many Options Q3 2015  [View article]
    Congrats Faye! Sounds like you are well on your way to making options pay you.

    If you can collect 1% of your portfolio per quarter in premiums while still holding some stocks then you'll probably do OK over the long run.

    Selling those cash backed puts sure beats waiting for a limit order to get filled, eh?

    Plus you'll have some fascinating small talk material for the next Black Tie Gala you attend. (I can hear it now ... "Hmmm, yes, that antique Peruvian Fertility Goddess statue over there ... I picked that up with the option premium I received from selling Naked Puts on my shares in Bank of Nova Scotia. I say, do you have any Grey Poupon?")

    Good show! :-)
    Oct 2, 2015. 06:46 PM | 1 Like Like |Link to Comment
  • The Future Of Coal Companies  [View article]
    "I expect what they are shooting at is the ground-level ozone that is generated, among other ways, by VOCs and NOx interacting. It forms, reacts, forms, reacts, etc." - TimeOnTarget

    Yes, indeed the EPA is targeting the reduction of NOx and VOC. The EPA report linked in the article makes that clear. However, the author stated that the EPA was targeting reductions in Ozone emissions, which is factually wrong. I re-quote the author's article on this point:

    "Under current standards, the EPA allows up to 75 parts per billion (ppb) of Ozone to be released. The EPA committee of scientists has recommended that the standards be lowered to 60 ppb." - Duane Bair

    If you look at the EPA report Mr. Bair links in his article, you will see in Section 3.3.4 (page 3-25) that they are in fact targeting reductions in NOx and VOCs. Not Ozone. The author's article is factually wrong.

    Mr. Bair also mis-stated the following:

    "According to the EPA, 32% of ozone emissions come from electricity generation." - Duane Bair

    What the EPA's (linked) website actually states is the following:

    "The electric power sector accounted for 32% of U.S. total greenhouse gas emissions in 2012."

    Note they are talking about greenhouse gas emissions, not Ozone. I managed to cut and paste this statement directly from the EPA's website, so I must presume the author substituted 'Ozone' for the EPA's 'greenhouse gasses' intentionally. Again, another factual error.

    The EPA's website then goes on to claim that these greenhouse gasses are causing climate change, a claim which is debatable at best.

    Natural gas power plants produce greenhouse gasses and NOx too. Wouldn't the author's logic also apply to the NG industry? A simple extension of logic would imply that the NG industry is about to founder with the coal industry, right? Yet the author focusses on only the coal industry.

    In addition, extrapolating the EPA's 'war on climate change' to the imminent downfall of the coal industry is a stretch. Even if the EPA imposes new regulations, the power companies will continue to burn coal for power production, pass the additional regulatory and cap-ex costs on to power utilities, which will in turn get rate increases to collect the added costs from the consumers they serve. That's how markets work. The alternative is to stop producing 39% of all electricity for the grid (good luck making that happen) or building out hundreds of new non-coal burning power plants in a hurry (not likely with the NIMBY crowd around).

    What ever happened to fact checking, or reasonableness in an argument? The EPA won't stop the use of coal for electricity generation any time soon. They're simply going to make it more costly to provide that resource to the public in an attempt to make an improvement in air quality. Whether the added cost will be worth the gain is up for debate at this point.

    IMHO, the article should have had a bit more thought put into it before it was submitted for publishing. The author mis-states his 'facts', and then applies pretzel-logic to them in order to demonize one industry.

    In my book, that's "bogus". I understand that opinions vary on the topic, and I'm sorry if some readers and/or the author disagree, but that's how I see it. If you're going to draw conclusions it's best to get the facts straight first. Conflation of the terms used to support a position doesn't 'prove' anything. It's just another opinion disguised as (supposed) facts.
    Oct 2, 2015. 03:06 PM | 2 Likes Like |Link to Comment
  • The Future Of Coal Companies  [View article]
    "According to the EPA, 32% of ozone emissions come from electricity generation." - Duane Bair

    Yes. Operating a generator, or an electric motor, creates ozone. Pretty much any electric discharge does the same (lightning, for instance).

    The ozone cited by the EPA is created by running the turbine to generate electricity, not by burning the coal. In fact ozone is unstable at high temperatures and 'self destructs'. Ozone's half life is less than one second at 250 deg Celcius and coal burns a LOT hotter than that. The amount of ozone coming out out of the top of a coal fired smokestack borders on zero.

    However, you would STILL create ozone if you power the same turbine using natural gas, nuclear power, water power, wind power, or monkeys-on-bicycles power. It's the high voltages in the running generator that create ozone, not the fuel being burned.

    The remainder of your line of reasoning is bogus as you have misunderstood how the ozone actually gets generated. The only sure-fire way to eliminate ozone generation at power plants is to shut them all down.

    By the way, why not write an article on the positive uses of ozone. It's a very good oxidizer and is used to help purify water, among other things.
    Oct 1, 2015. 07:35 PM | 4 Likes Like |Link to Comment
  • 5 Reasons To Consider Alliance Resource Partners, Including A 10.98% Dividend  [View article]
    "No tax is paid at the partnership level; partnership income passes through and is taxed only at one level – that of the individual partner." - rlp2451

    This is one of the great points of MLPs and REITs. By paying taxes only at the shareholder / unitholder level, the after tax distributions are higher than with even a Qualified stock.

    Avoiding the 35% corporate level taxation puts more money in your pocket.

    A 15% Qualified dividend is taxed at the 35% corporate rate, then again at the 15% personal rate, leaving 55.25 cents of every dollar available to pay out.

    At the top personal tax rate of 39.6% an MLP or REIT leaves 60.40 cents after taxes. The amount left is higher for those in lower tax brackets.

    . Tax ............. Amount
    Bracket ........ Remaining
    39.6 ............... 60.40
    35.0 ............... 65.00
    33.0 ............... 67.00
    28.0 ............... 72.00
    25.0 ............... 75.00
    15.0 ............... 85.00
    10.0 ............... 90.00

    If your total taxable income is below $200,000 you will keep more of the money available to pay out from MLPs and REITs than from C-Corps.
    Sep 27, 2015. 10:28 AM | 3 Likes Like |Link to Comment
  • 5 Reasons To Consider Alliance Resource Partners, Including A 10.98% Dividend  [View article]
    Released today: Sept 24, 2015

    Most recent ARLP rating on Sept 18, 2015 by FBR Capital as 'Outperform' with a target price of $34.

    Cash flow coverage of ARLP is 1.7x dividend payment, which seems like a reasonable safety factor to me, though opinions do vary.

    The company seems to think the recent finalization of the White Oak acquisition will add to the bottom line and so one might reasonably expect the dividend to (at least) hold or (probably) increase going forward.
    Sep 24, 2015. 12:34 PM | 1 Like Like |Link to Comment
  • 5 Reasons To Consider Alliance Resource Partners, Including A 10.98% Dividend  [View article]
    "At best they are all outdated and at worst they are all wrong. What source do you have for" - rlp2451

    I'll grant you that some of the higher end estimates may be outdated as I haven't checked in a while, but they're available to anyone who can use the Google search engine:

    I see the upper end of estimates has been lowered to $36, which is reasonable given the lower expected earnings in 2015. Historically ARLP has traded for roughly a P/E of 10. It's currently at 6. As a VERY rough measure, a price in the mid 30's would not be out of the ordinary.
    Sep 24, 2015. 09:47 AM | 4 Likes Like |Link to Comment
  • 5 Reasons To Consider Alliance Resource Partners, Including A 10.98% Dividend  [View article]
    For a long term income investor, ARLP is as close to a no-brainer as you can get.

    I sold a few Sept 25 Puts that got exercised. My cost basis on those shares is $22.90 (after consideration of the option premiums) which gives me a yield of 11.8% on the initial money I put into the buy. What's not to like?

    Analysts 1 year price forecasts run from $28 to $41 and the current price is a tad over $24. That's somewhere from 14% to 41% undervalued. That's a pretty good margin of safety to sweeten the deal.
    Sep 23, 2015. 07:05 PM | 2 Likes Like |Link to Comment
  • How I'm Reacting To The Ups And Downs Of My Portfolio  [View article]
    Nice summary Robert and a good job of outlining the 'disintermediation' effect of DGI.

    The next logical question to ask is:

    What are your thoughts as to which stock(s) will get your next batch of re-invested dividends?

    As you point out with XOM, Mr. Market is presenting some very interesting deals in the energy sector and in raw materials these days. I guess the $64 question is whether he will sweeten those deals even more if you wait a bit.
    Sep 22, 2015. 01:52 PM | 1 Like Like |Link to Comment
  • High-Dividend Stock Yields Over 9%, Goes Ex-Dividend This Week, Has Future 25% Hike  [View article]
    "The trouble is that there are so many container ship companies out there that it is truly a crap shoot. I speak from the humble experience of loosing thousands on Eagle Shipping and NAT which at the time I bought shares they were the "golden" selections in this industry. There is virtually no moat for any company in the shipping industry." - Bingo 2

    GSL isn't IN the container ship industry. They own the ships and LEASE them on long term contracts to the companies that ARE in the container ship industry.

    GSL's revenue is a lot more consistent than the shipping companies that lease the ships from GSL.

    The one area where GSL might have challenges is managing their debt while they grow. Buying / building a ship costs a lot of money up front. If they ever have troubles with rolling over their short term debt they might run into cash flow issues and need to reduce or cut the dividend as a result. I'm not saying this is a big risk, but it's one to keep an eye on for sure.
    Sep 21, 2015. 12:01 PM | Likes Like |Link to Comment
  • High-Dividend Stock Yields Over 9%, Goes Ex-Dividend This Week, Has Future 25% Hike  [View article]
    Thanks for pointing out another potential up-n-comer growth stock to consider. I have picked up some good undervalued growers from some of your prior pieces.

    That said, I think it would be useful if you would make it easier for your readers to dig into the details, if they are interested.

    For example, why not include a link to the company's website?:

    Or their most recent investor presentation?:

    Other areas to consider mentioning are the company's cash flow, payout ratio, debt, and credit rating. Small companies can make things look pretty rosy for a while by taking on a lot of debt (not saying that's necessarily the case for GSL).

    Thanks again and keep 'em coming.
    Sep 20, 2015. 09:53 AM | 1 Like Like |Link to Comment
  • These Are Future Dividend Champions, My Friends  [View article]
    "TSCO ... customer base ... just keep coming back every week and loading the pickup truck with more animal feed, horse fence sections, oil for the tractor etc. They also have virtually no competition for what they do. There is no other nationwide store chain that does this" - Pepsiguy5

    There are regional competitors however. In the Northeast US for instance, they compete with Agway:

    That said, I'll point out that there was an Agway store in my hometown for at least 40 years before TSCO arrived, and yet TSCO appears to be making a go of it anyway. Agway likely competes pretty well in the feed and small equipment areas but it wouldn't surprise me to learn that TSCO has a significant edge in the larger equipment lines.
    Sep 19, 2015. 01:49 PM | Likes Like |Link to Comment
  • No Fed Rate Rise And The Market Dropped Anyway?  [View article]
    Everyone and their brother is waiting for an 'official' FED announcement about raising rates at one of their future meetings (usually the next one).

    The trouble with such a plan is that every big bank or hedge fund on Wall Street is waiting with High Frequency Trading computers all revved up to hear what's going to happen. Naturally they intend to scoop up big profits by front-running everyone right after the FED makes a scheduled announcement.

    I would not be at all surprised to see the FED make an unscheduled announcement to start the rate raising party off just so that everyone can start from the same position of hearing the unexpected news. The reason why is less important than the timing at this juncture.

    The author reminds us of an important point. Stick to the plan. Reinvesting the ever-larger dividends received at much lower prices will pay off down the road.
    Sep 18, 2015. 07:57 PM | 2 Likes Like |Link to Comment