Why Apple Shares Probably Won't Be Hitting $700 Anytime Soon [View article]
Some more food for thought: consider the relationship costumers.
My thesis is that AAPL is a consumer electronics company, not a tech industry company. Its Bread and butter is consumers who buy products that are relatively simple to operate (not to make) and become obsolete in 3-5 years, and customers are not deeply locked in.
This is different from corporate/industrial customers who buy vastly complex systems they build their businesses around.
Thus AAPL is more like a super-sucessful version of Sony, Dell, Nintendo, or RIMM. AAPL is NOT like a super-successful version of INTC, MSFT, or CSCO. The customer relationship evolves on a different timescale.
Looks approximately in line. Verizon and Toyota are outliers in P/E, in verizon's case, the 5% yield makes up for it. I think INTC and MCD would probably be the best comparison for AAPL now, which makes AAPL about fairly valued (assuming it can maintain sales and margins). However, being in consumer electronics, that is a significant risk. The darlings of the industry rarely get more than 5-10 years before losing their crown. AAPL is already halfway into that. Hats off to all who bought AAPL. I wouldnt buy in now.
Spain Announces Beginning Of End: The Unfolding Global Fiasco Is Near [View article]
they'll print. History is blindingly clear on this one. Every government prints -- the people will be begging them to print! Then they in a couple of years they discover they've printed too much. Then they raise rates. We're marching down the same road by the way. I think a great deal of care is taken that EU and USA march together, so the balance of power is maintained.
Natural Gas Continues Its Epic Fall [View article]
what demand?
the USA natgas market is pretty isolated. There are currently NO LNG ship export terminals in the US. Over the last decade we just finished building a bunch of import terminals (now all idle). some are being converted for export, due to come online in 2015.
Nationwide storage (in huge underground caves) for natgas is maxed out (on a seasonally adjusted basis-- empty storage is reserved for gas produced in the summer to be released in the winter).
I don't think Significant Pipeline export to Canada or Mexico isn't happening, they have their own supply, and their limited ability to fill LNG ships for export is maxed out.
Our country currently has tiny natgas vehicle infrastructure, and the bill in congress to give tax breaks for building filling stations and subsidizing vehicle conversions (natgas act of 2011, now 2012) is being sat on for reasons I don't understand.
The industries that can switch to natgas have done so, and won from it: chemical (fertilizers) oil refining (use natgas instead of oil to power the refining process) electricity generation per unit heat or electricity produced, natgas has been cheaper than coal since about $4 / kcf. Notice coal is plunging too, by the way.
And still we are drilling like mad, and flaring away. Market is flooded. Perhaps this is an effort by the natgas industry to kill off other competing energy projects (coal, solar, wind), by tempting the market to direct its investments into bringing more natgas electricity generation online. If this is indeed their strategy, prices would be low for a couple of years. 2015 should be a big turning point, as exports come online.
Silver Sell Off Hitting Historic Levels [View article]
im not disagreeing with everything you say, but the price ratio does not have to be the same as the relative abundance of gold vs silver in the earth. it also depends on how costly they are to extract, and the demand. and the historical 15:1 price ratio is for old times before the modern age of fiat money, when there was a practical need for massive amounts of silver to use as small change. (can't be buying a stick of gum with a gold coin, after all).
there are some pretty good arguments that we might be going back there, but the modern way of doing things is far from finished... what people think of this question will totally influence the gold/silver *ratio*.
Oil Price Inflated, Time to Take Profits From Resource Related Investments in Your Portfolio [View article]
dont forget natgas. in some parts of the world, automobiles are being converted to run on CNG... and here in the US we are overflowing with the stuff to the point of not being able to sell it!
The Gold Bubble That Just Won't Pop [View article]
actually, the only thing that has to happen for a massive dump of gold and silver is high interest rates for a sustained period of time (5-10%). this will lead to mass exit from gold (and commodities and maybe even stocks) into bonds. happened before in early 80's- lead to the demise of the USSR as a superpower, since they relied on high oil price to get $$$.
If it happens too soon this time, it will lead to the demise of the USA as a superpower so lets hope that doesn't happen. Instead we got to inflate away the debts of the world's governments, THEN we can jack up rates and kill the commodities. nasty game.
Japanese Meltdown Will Inhibit U.S. Recovery [View article]
Thanks for the great article! I want to comment because Steve Hansen was an engineer in the nuclear industry- the observation about debris in the cooling loop really drew my attention. Anyhow, a couple of points.
1. our media's coverage of the situation is ridiculous. Made it look like the quality of the Japanese government response was like Katrina or maybe even US-air-force-on-9/11 (i.e., the system failed miserably). I found this nice, organized news source on the exact status of the reactors:
take a look at the 'reactor status' pdf's -- in spreadsheet format! why can't our media be this organized?
2. more than a week after the accident, they discovered the idea of putting a fire hose onto a crane with a very long boom to apply the water (instead of helicopters). It took them a week to figure this out? seemed obvious to me. I suspect TEPCO was stalling to either cover something up or allow the guilty parties to make their escape.
Ok no more conspiracy nut stuff!
3. Most important- money flow is good for business, regardless of whether it is productive (good for society) - yes indeed! Just like after the 2008 crisis here, the central bank will save the day!
4. Look for major political changes in Japan coming out of this. I don't know enough about Japanese politics to say anything else but you can bet your last dollar that Japanese politicians will take this and run with it and maybe even use it to enact changes they haven't had the votes to do previously, similar to the Republican party in the USA and 9/11.
Tesla's Not-So-New Manufacturing Model [View article]
Steve, as a mechanical engineer, you ought to know that JIT is not primarily about the cost savings from carrying less inventory. In fact these cost savings are often negated for many years by the burden of implementing such system.
Instead, JIT is a "training tactic" for an organization to step up the quality of its manufacturing processes, AND its design, since they are opposite sides of the same coin. With reduced or nonexistent mid-process inventories, any irregularity in any process step gets felt by everyone down the line, forcing the organization to make its processes perfect, or at least to have unvarying yield.
It's a huge distraction for an immature company, not something they should be doing now. Similar to runners training at high altitude to deprive themselves of oxygen during training. They run much slower at first and it takes a long time to pay off, but it eventually does. One of Toyota's old "secrets", still misunderstood by US style management that focuses primarily on finance.
Deliverance Day: The New Middle East Of America By 2020? [View article]
Delaying the Keystone XL is also a gift to the other transportation option - railroads. (Warren Buffet, who owns the 2 biggest rails in the US, says thanks!).
Deliverance Day: The New Middle East Of America By 2020? [View article]
With fracking, the groundwater pollution is only part of the story. Most of the fracking fluid (millions of gallons per well) is recirculated. Chemicals that are naturally present in the rock a mile underground, where they hurt nobody, are mixed and dissolved into the water and brought up to the surface where they are not normally found. When it comes back up the water is a lot less clean than what was pumped down. Even if the fracking fluid is just soap and sand, what you end up with is a mix of water with hydrocarbons that would be toxic to a woodland environment with significant freshwater resources. The wastewater has to get disposed of somewhere.
Perhaps In Texas there are many old dead oil wells you can pump the wastewater into, or maybe you can just dump it wherever and noone cares because a lot of land down there isn't worth much. Not so in the northeast, where population is more dense, and toxic chemicals lower landowner's property value.
Anyway, fracking is not inherently evil. But it *IS* an obvious source of industrial accidents waiting to happen. Our society's track record with this kind of situation is pretty poor so it's right to be suspicious.
How To Profit With James River Coal Company [View article]
It's the perfect technical stock. Just be aware that at their current (estimated 2012q4) burn rate they will run out of liquidity at the end of this year and will return to bankruptcy. Kindof a hand grenade hot-potato game.
Why Apple Shares Probably Won't Be Hitting $700 Anytime Soon [View article]
My thesis is that AAPL is a consumer electronics company, not a tech industry company. Its Bread and butter is consumers who buy products that are relatively simple to operate (not to make) and become obsolete in 3-5 years, and customers are not deeply locked in.
This is different from corporate/industrial customers who buy vastly complex systems they build their businesses around.
Thus AAPL is more like a super-sucessful version of Sony, Dell, Nintendo, or RIMM. AAPL is NOT like a super-successful version of INTC, MSFT, or CSCO. The customer relationship evolves on a different timescale.
Why Apple Shares Probably Won't Be Hitting $700 Anytime Soon [View article]
ticker p/e div-yield
AAPL 17.6 2.65
CAT 14.5 1.7
GE 16 3.4
INTC 11.8 3
MCD 18.7 2.9
BA 14 2.3
WMT 13.5 2.6
XOM 10.2 2.2
BP 5.6 4.2
TM 59 1.5
GM 5.8 0
AA 19 1.2
AXP 14 1.4
BAC - 0.4
JNJ 19 3.45
KFT 19.2 3.0
VZ 45.5 5.19
Looks approximately in line. Verizon and Toyota are outliers in P/E, in verizon's case, the 5% yield makes up for it. I think INTC and MCD would probably be the best comparison for AAPL now, which makes AAPL about fairly valued (assuming it can maintain sales and margins). However, being in consumer electronics, that is a significant risk. The darlings of the industry rarely get more than 5-10 years before losing their crown. AAPL is already halfway into that. Hats off to all who bought AAPL. I wouldnt buy in now.
Spain Announces Beginning Of End: The Unfolding Global Fiasco Is Near [View article]
Natural Gas Continues Its Epic Fall [View article]
the USA natgas market is pretty isolated. There are currently NO LNG ship export terminals in the US. Over the last decade we just finished building a bunch of import terminals (now all idle). some are being converted for export, due to come online in 2015.
Nationwide storage (in huge underground caves) for natgas is maxed out (on a seasonally adjusted basis-- empty storage is reserved for gas produced in the summer to be released in the winter).
I don't think Significant Pipeline export to Canada or Mexico isn't happening, they have their own supply, and their limited ability to fill LNG ships for export is maxed out.
Our country currently has tiny natgas vehicle infrastructure, and the bill in congress to give tax breaks for building filling stations and subsidizing vehicle conversions (natgas act of 2011, now 2012) is being sat on for reasons I don't understand.
The industries that can switch to natgas have done so, and won from it:
chemical (fertilizers)
oil refining (use natgas instead of oil to power the refining process)
electricity generation
per unit heat or electricity produced, natgas has been cheaper than coal since about $4 / kcf. Notice coal is plunging too, by the way.
And still we are drilling like mad, and flaring away. Market is flooded. Perhaps this is an effort by the natgas industry to kill off other competing energy projects (coal, solar, wind), by tempting the market to direct its investments into bringing more natgas electricity generation online. If this is indeed their strategy, prices would be low for a couple of years. 2015 should be a big turning point, as exports come online.
Silver Sell Off Hitting Historic Levels [View article]
there are some pretty good arguments that we might be going back there, but the modern way of doing things is far from finished... what people think of this question will totally influence the gold/silver *ratio*.
if you ask me, gold's a much safer bet.
Oil Price Inflated, Time to Take Profits From Resource Related Investments in Your Portfolio [View article]
The Gold Bubble That Just Won't Pop [View article]
If it happens too soon this time, it will lead to the demise of the USA as a superpower so lets hope that doesn't happen. Instead we got to inflate away the debts of the world's governments, THEN we can jack up rates and kill the commodities. nasty game.
Japanese Meltdown Will Inhibit U.S. Recovery [View article]
1. our media's coverage of the situation is ridiculous. Made it look like the quality of the Japanese government response was like Katrina or maybe even US-air-force-on-9/11 (i.e., the system failed miserably). I found this nice, organized news source on the exact status of the reactors:
www.jaif.or.jp/english/
take a look at the 'reactor status' pdf's -- in spreadsheet format! why can't our media be this organized?
2. more than a week after the accident, they discovered the idea of putting a fire hose onto a crane with a very long boom to apply the water (instead of helicopters). It took them a week to figure this out? seemed obvious to me. I suspect TEPCO was stalling to either cover something up or allow the guilty parties to make their escape.
Ok no more conspiracy nut stuff!
3. Most important- money flow is good for business, regardless of whether it is productive (good for society) - yes indeed! Just like after the 2008 crisis here, the central bank will save the day!
4. Look for major political changes in Japan coming out of this. I don't know enough about Japanese politics to say anything else but you can bet your last dollar that Japanese politicians will take this and run with it and maybe even use it to enact changes they haven't had the votes to do previously, similar to the Republican party in the USA and 9/11.
Microsoft Finds A New Enemy In The Browser Wars [View article]
Is It Time For The Next China Growth Scare? [View article]
Tesla's Not-So-New Manufacturing Model [View article]
Instead, JIT is a "training tactic" for an organization to step up the quality of its manufacturing processes, AND its design, since they are opposite sides of the same coin. With reduced or nonexistent mid-process inventories, any irregularity in any process step gets felt by everyone down the line, forcing the organization to make its processes perfect, or at least to have unvarying yield.
It's a huge distraction for an immature company, not something they should be doing now. Similar to runners training at high altitude to deprive themselves of oxygen during training. They run much slower at first and it takes a long time to pay off, but it eventually does. One of Toyota's old "secrets", still misunderstood by US style management that focuses primarily on finance.
Deliverance Day: The New Middle East Of America By 2020? [View article]
Deliverance Day: The New Middle East Of America By 2020? [View article]
Perhaps In Texas there are many old dead oil wells you can pump the wastewater into, or maybe you can just dump it wherever and noone cares because a lot of land down there isn't worth much. Not so in the northeast, where population is more dense, and toxic chemicals lower landowner's property value.
Anyway, fracking is not inherently evil. But it *IS* an obvious source of industrial accidents waiting to happen. Our society's track record with this kind of situation is pretty poor so it's right to be suspicious.
Coming Soon: More Losses At Clean Energy Fuels [View article]
How To Profit With James River Coal Company [View article]