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  • U.S. Steel Is Set Up To Take Another Beating [View article]
    All of the things you mention are certainly applicable to MT. In fact, they have a larger EU exposure. Would appreciate your view on this, as well as a view on SLX
    Jan 23, 2012. 09:22 AM | Likes Like |Link to Comment
  • Treasure Island Royalty Trust: A Net Asset Valuation Of The Trust's Core Property Interests [View article]
    James: An interesting opportunity. In essence, it affords the public the opportunity to buy an interest under a drilling well. Or wells. To say much more than that about the opportunity stretches credulity, in my view. Are you developing the production decline curves from offsetting wells completed in the same strata? Do we have some inkling on how long it will take to get this production hooked up to the interstate pipeline system? Have you run a "doomsday" scenario at say, $2.50/mmbtu gas for the next 3 years?

    I'll be honest - this strikes me as a "swing for the fences" investment. One where you are looking for 3:1 on your money at least. Far too much can go wrong to make it suitable for the typical royalty trust investor.
    Dec 28, 2011. 01:02 PM | 1 Like Like |Link to Comment
  • Super Committee Failure: Is The U.S. Political System Broken? [View article]
    I've given a lot of thought to the so-called failure of the "super committee". From the Republican perspective, the outcome (as it now stands) is not too far from optimal. Consider:

    a) No new taxes were enabled.
    b) Considerable spending reductions were set in motion
    c) While the cuts were from some cherished Republican areas (defense), that's not too bad if we are winding down Iraq/Afghanistan.
    d) Obama has vowed to not allow any reversion on the cuts in place.

    Like I said - not so bad when you think about it.
    Nov 23, 2011. 04:12 PM | 1 Like Like |Link to Comment
  • Mortgage Market Still Lost At Sea Despite Record Low Rates [View article]
    I refer to your earlier article quoting Bill Gross at length: "PIMCO's Bill Gross: New Fangled Love Songs". Specifically, the chart depicting FLAT wage growth. Housing is a consumer good. Post mortgage debacle, we're reverting to historic means on the % of households owned vs. rented. Shrinking pool of owners times lack of income = SICK housing market. IMHO, the solution exists outside the realm of interest rates. As for the fortunate that have decent jobs & balance sheets (and I'm one of them, thankfully) - take the freebie and refinance every time the numbers look right. Then say: Thanks Ben! But that doesn't build more houses.
    Sep 8, 2011. 11:57 AM | Likes Like |Link to Comment
  • How to Invest When Your Country Is Going Bankrupt [View article]
    I've pondered this one (same as all the other folks that read S.A. with regularity).

    I come back to this question: What has survived wars, recessions, riots, etc?

    An answer (not necessarily THE answer for you): Top quality Corporate Equities. Shell Oil, Procter & Gamble, etc. Not spectacular returns, but a fairly decent dividend. Me? I'm just trying to hit'em on a market collapse so I'm in cheap.

    That, and get debt paid down. Mortgages may only be 4.5%, but that's a heck of a lot more than you can earn on bonds or cash. Pay yourself first. Mortgage interest as a tax exemption can't last that much longer.
    Aug 3, 2011. 09:54 AM | 1 Like Like |Link to Comment
  • Chesapeake Energy Is 'Priced to Perfection' [View article]
    Well, I suspect that you've simply proven that the market is efficient. FCF models only value the intrinsic value. CHK (or most any growthy company) has tremendous extrinsic option value, if you think of unexplored lands as the option to drill (or not drill).

    Add to that the obvious: CHK is a proxy for a long stream of NG, which will wiggle over time.

    CHK is really more of a market call on the commodity, and your view of their growth prospects.
    Jul 27, 2011. 12:36 PM | 1 Like Like |Link to Comment
  • IEA Oil Release: A Counterproductive Idea and a Market Opportunity [View article]
    Personally, I see election politics at work. Oil is heading down anyway, given the softening of the economy. This action is "piling on" by the U.S. administration - allowing the election claim that "See - we broke the backs of the oilcos and OPEC". I agree that the action is conflicted as this does have a stimulative effect on the economy, but the primary motivator is probably political
    Jun 24, 2011. 12:22 PM | 3 Likes Like |Link to Comment
  • FirstEnergy (FE +4.9%) leads S&P 500 gainers, as Citigroup raises its price target to $46 following a "large positive surprise" in the capacity auction at wholesale power market PJM: a 2014 price of $125.99/megawatt-day, up from a year-ago $27.73. (earlier: ENOC)  [View news story]
    Not so sure, youngman. Lots of coal plants leaving the grid with the advent of MACT regulation...
    May 16, 2011. 02:25 PM | 1 Like Like |Link to Comment
  • Why Oil Is Not Going to $200 [View article]
    Short term, oil is inelastic, long term very elastic, which is your point. I'd be a bit careful with respect to electricity, however. In the U.S., we are at the sunset of cheap electricity. Legacy powdered coal power plants given their highly depreciated state, often produce power for 2¢/kWh. As environmental regs close these units, the nearest replacement (Nat. gas CCGT's) are coming in at 6¢/kWh. Wind? 12¢. Nuclear? 13¢+ kWh. Electric cars are no panacea.
    Mar 8, 2011. 08:48 AM | 2 Likes Like |Link to Comment
  • Contrarian Ideas: The Most Underestimated Companies Trading Near 52-Week Lows [View article]
    John Maynard Keynes said: "Successful investing is anticipating the anticipations of others."

    You've constructed a nice watch list - but absent a sign of incipient upward momentum, this list is, to use another cliche, catching a falling knife.

    Gotta have momentum. We all dream of catching a stock at the absolute bottom, but its dumb luck and really risky.
    Mar 4, 2011. 09:35 AM | 2 Likes Like |Link to Comment
  • History Lesson: Oil Price Spikes and Their Aftermath [View article]
    A great article that implicitly separates the near term events (largely inconsequential) from the fundamental supply/demand balance issue. The latter tends to give the former "legs"
    Mar 3, 2011. 02:23 PM | Likes Like |Link to Comment
  • A Sense of Optimism for Steel Stocks [View article]
    Hot rolled steel is ticking at $880/short ton stateside, up from $620-ish a couple of months ago. Iron Ore is completely bull. X has a much better ore position than most. Steel producers are like oil refiners - playing the spread between product and ore (or product and scrap). X is truly integrated, which at this time is a real +.
    Feb 17, 2011. 01:59 PM | Likes Like |Link to Comment
  • Expecting Australian Coal Mines to Remain Under Water for Months [View article]
    Yes, cost of steel production is going up. BUT - the availability of materials is not uniformly distributed. Asian mills are more dependent on Australian mines. To manage their material shortages, I am expecting these mills to increase prices to shoo their customers away for a little while. Those customers still need steel, and who has it? The mills that have the intact raw material supply chains. The thesis is that N.American mills (but not all mills) would benefit.
    Jan 19, 2011. 09:55 AM | Likes Like |Link to Comment
  • Expecting Australian Coal Mines to Remain Under Water for Months [View article]
    Tracking your investment thesis to its logical end, one should short Asian/European steelmills and go long North America/S. America. Also, one should go long scrap exporters. Lack of coking coal = lack of coke = lack of pig iron = reduced steelmake.

    Scrap (a fungible substitute for pig iron) should become more valuable. Ergo, a firm like Schnieder Steel (SCHN) should get perky. If anything, they're selling off after a nice rally. Hmm...

    Steelmakers with undamaged supply chains (SA, NA) should see the orders come their way. AKS, NUE come to mind. AKS is not looking so hot. NUE a bit better, but no reaction to this news.

    So, I guess I'm not totally buying the "Australia is knocked out" thesis. I'm sure that met coal producers will talk their book, but the steel market just doesn't seem to moving in sympathy where it should be moving.
    Jan 17, 2011. 09:58 AM | 2 Likes Like |Link to Comment
  • Calculating Mesabi Trust's Q4 Distribution [View article]
    Nice work dissecting an investment that has had a ton of momentum and two tons of opacity. Feel a lot better about it now. Nice work
    Dec 20, 2010. 03:48 PM | 1 Like Like |Link to Comment