k45

Your Oil Stocks Aren't Coming Back

<<<The major difference between the aforementioned tech giants during the peak of the dot com bubble and the oil and gas stocks now, is that the tech giants were coming down from price-to-earnings multiples of 30, 40, even 50!>>>

Please go back and check your information. Cisco was selling at a P/E of 300 right before the tech stock bubble burst. A 100 PE had been "normal" during Cisco's big growth years, but that was almost reasonable since the PEG was 1 (yes, Cisco was doubling earnings each year for many years). At that point, Cisco had the largest market cap in the world, bigger than either GE or Exxon. The storm flags were flying!

Exxon Apostasy: A Closer Look at the Oil Giant's Real Valuation

Exxon didn't run out and pay inflated prices for new assets when oil was over $100/bbl. Management knew it was a bubble and didn't squander it's cash. Hopefully now that prices are down, it will be picking up some bargains.

Exxon has smart management. Smarter than most. That's the sort of company that I like investing in for the long haul.

Foreclosure Moratoriums: It's Time to Get Real

If we keep people in houses they cannot afford, we keep the housing prices too high so that deserving people cannot afford them.

Housing prices have to come down to historical norms. Until then, houses are overpriced and wise thinking people cannot afford them.

The bubble HAS to be worked off. Anything that tries to maintain the status quo just extends the bubble. Eventually it HAS to be worked off. Until that point, the pain continues.

McDonald’s: Dividend Stock Analysis

"From the end of 1998 up until December 2008 this dividend growth stock has delivered a ***negative*** annual average total return of 6.70% to its shareholders."

I think you need to recheck your numbers. Even without dividends, Yahoo Finance, Goggle Finance and Valueline all show POSITIVE returns for the last ten years.

Environmentalism May Face Major Setback in 2009

I agree that global warming is a hoax. Shams like Kyoto would do nothing to improve the environment, it would just shift "dirty" industries to places like China, where Kyoto does not impose limits, while destroying the U.S. economy. That's the real goal of Kyoto.

Ethanol is another scam, designed to reward politician's friends.

The extreme swings in fuel prices is disruptive to both our economy and any reduction in imported oil. If we had true leadership (instead of payola) in Washington, they would set long term goals for fuel prices (say $2.50/gallon, with a 5%/yr inflation factor). When prices get lower, taxes would be added to reach the goal. When prices get higher, taxes would be refunded to bring it down. THAT would provide a stable development platform to make U.S. independence viable. People and corporations could plan intelligently.

Barron's Finds a Win in Linn

The Barron's article sure sounded good (warning bells, "too good to be true"?). But a quick look at the stock's financials on Google finance looked pretty scary. Too many big negative numbers there for me to feel comfortable.

In the distant past, I've found some great stock picks in Barron's (e.g. FCFS) but lately I can't get excited about their recommendations. Maybe I'm wrong.

Junk Bonds Today: Realistic Levels?

<<< However, the real unknown is how high the default rate will get.>>>

True. However, many of those bonds at the most risk are already trading at steep discounts (30-50% off of face value). Even if they default, they probably won't be worthless. I've heard that GM(?) is offering 30 cents on the dollar.

Personally I've picked up several individual junk bonds as well as the ETF. Time will only tell if they were a wise choice.

Exxon Mobil: Rationale for Being Short

As crude oil prices drop, Exxon's profit margins in it's chemical operations and retail sales improve. True, those do not fully offset the reduction in profits from crude, but it certainly provides a cushion.

Long term, Exxon has been a good investment through up and down markets. It's a very well managed company with the financial strength to continue building shareholder value. Exxon didn't run out and make expensive acquisitions when the oil bubble peaked. I look for them to make acquisitions at the bottom. Management is probably wiser than most of us.

Restaurant Spending, Then and Now

Considering what my wife spends for groceries, we've come to the conclusion that eating out is not much more expensive than eating at home, maybe even less expensive.

Exxon Apostasy: A Closer Look at the Oil Giant's Real Valuation

<<<XON is still stiffing the people in alaska who had their livelihoods destroyed when the valdez went aground.>>>

Exxon has worked hard to do anything reasonable to remediate the problem. Of course to some greedy people, nothing will ever be enough.

Do you realize that MOST of the Exxon Valdez problem was BP's fault? BP was contractually responsible for fast response and containment. They cut corners and failed in both areas: fast response and containment. If BP had done the job they were responsible for, the magnitude of the problem would have been tremendously smaller.

<<<XOM kept its hands clean, stayed with the challenges at hand and now, through its integrity and operational prowess, has thrown possibly the only life preserver to the world through cheap energy prices to get out of this recession.

Integrity and honesty will always trash greed, something that gets taught to the world's population about every eighty years or so to sober it up. >>>

I feel the same way. I hope we are right.

Robert Rosenkranz: Get the Rating Agencies Out of the Regulatory Process

When you pay the fox to guard the hen house, what do you expect? The issuers are paying the agencies for their ratings. That's like a home seller paying the appraiser for a valuation.

Just as laughable is the recent action on GE: Putting GE on creditwatch for a possible downgrade IN TWO YEARS! By then, GE will either be bankrupt or past the problems. I wonder if these guys drive down the freeway watching out the rear window?

Why We Need Higher Gas Prices

What we need is more stability in energy prices instead of the wild gyrations that inflict heavy damage on our economy and individuals.

I pity the folks who believed gas was going to $6 and $8 a gallon and went out and traded in the existing vehicle (at a low trade in price) for an overpriced "efficient" vehicle. They wasted money AND energy (how much energy went into producing the new vehicle?)

All these wild variations are doing is driving people to make bad decisions. Our economy would be much better off if we set a reasonable price for gas, such as $2.50 a gallon (with perhaps a 8 or 10% per year increase) and added tax when it was lower and used that same tax money to rebate prices when it went higher. THEN people and corporations could make intelligent long term decisions.

Of course such a sensible plan will never be done because too many of our politicians and their friends make money from the gyrations.

The Banker's Choice

On one hand I agree with @constructe that it's amazing how Congress writes blank checks with no clear requirements as to how it is to be used. However, when you think about it, having Congress deciding how industry should be run is probably the worst possible way to manage. After all, bad decisions in Washington have largely been responsible for the mess we are in.

(Think of it this way: what's worse than the Big Three management? Washington management.)

Three Inconvenient Energy Policy Truths

Inconvenient Truth #4 - We cannot reach any degree of energy independence as long as the environmentalists stymie everything. The Sierra Club even fought against wind power.

The U.S. and Canada has more oil (shale and oil sands) than Saudi Arabia ever had. Of course low prices and environmentalists keep us from using that, or our coastal oil. No, it's better to squander our resources on rip-offs like corn/ethanol.

Wind and solar power are not reliable enough and in the right locations to provide more than a small amount of our needs.

Of course we could save a lot of oil if we got intelligent and started building nuke plants, especially fast breeder reactors. France gets 80% of it's power from safe nukes. But of course, that's another roadblock from the environmentalists and the NIMBYs.

IBM Drops Two Bombs on Microsoft

"As one of our sales people put it: "You mean someone at Procter & Gamble may not be able to open my quotation/presentation because I created it in OpenOffice and they use Microsoft?" "

LOL. Nikola, you nailed it on the head. I'm retired from P&G IT that THAT exactly is what caused the standardization on the Windows/Office environment.