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marpy

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  • ArcelorMittal may build auto-grade steel plant in India [View news story]
    The auto is a sector that is growing in places like India and China and auto grade steels are one of MT's specialties. They invest a lot in R&D and have developed a number of high strength light weight automotive steels.
    May 22, 2015. 03:32 PM | Likes Like |Link to Comment
  • Is It Time To Take A Position In Turquoise Hill? [View article]
    A good analysis Gary - yes their is risk involved as the Mongolian government can be very flaky and we have a Mongolian election coming up in 18 months or so where the nationalization anti foreigner trend may again rear its ugly head as in past elections. The prize due to the quality and size of the ore body is definitely a big plus here and I suspect that the people of Mongolia may be waking up to the damage that some of these anti foriegn investor politicians have caused. It also makes a lot of sense for Rio Tinto to buy out the minority TRQ shareholders from a growth as well as from an accounting perspective but I suspect that Rio Tinto may wait till at least the outcome of the upcoming election before making a move.
    JMO - based on having followed this story for years.
    May 21, 2015. 01:28 PM | 2 Likes Like |Link to Comment
  • Wall Street Breakfast: PMI Data Weighs On Global Markets [View article]
    And just how much of that gas tax do you think actually goes to road maintenance?? 10% if you are lucky as governments have gouged the rest to pay for all sorts of other questionable things. One thing this does do is prolong the use of the internal combustion engine as all things being equal, generated electricity is the most expensive power in the world.
    May 21, 2015. 10:16 AM | 2 Likes Like |Link to Comment
  • Oyu Tolgoi seen "by far the best undeveloped growth project" in mining [View news story]
    Metallurgically speaking, phase 2 (the underground development) definitely is the best undeveloped copper play on the planet. Politically speaking, it is a different story which looks like it may be getting better but has a ways to go before this proves out. Foreign investors have stayed away for Mongolia because the GOM has been notorious for not honoring agreements and changing its mind on a dime. The troubles of South Gobi resources and Khan resources are examples of how bad it can get. (these cases have both been covered in seeking alpha).
    The antics of the GOM have economically forced Mongolia to its knees as investors stayed away, the currency rapidly headed south and foreign reserves were depleted as bankers stayed away from any form of GOM debt. This forced the GOM to change its tune and make a deal with RIO to get this project moving. Even so, their are still many in the GOM that are against foreigners and foreign investment and want to cling to the old corrupt shake down ways.
    For foriegn investors, the Oyu Tolgoi project is really the canary in the coal mine as if a company like Rio Tinto can not take the best copper/ gold ore body in the world today and get it developed as a money maker, then other would just be wasting their time trying to do anything in Mongolia. Whether Mongolia is a good place for foriegn investment or not will take a few more years to play out. A key event that is soon approaching is the next election in 2016 - will the anti- foreigners be re-elected or will Mongolia elect a more progressive government?

    This will be key in determining which way Mongolia goes.

    JMO based on 10 plus years of following this situation.
    May 20, 2015. 10:19 AM | 4 Likes Like |Link to Comment
  • Housing starts jump in April [View news story]
    Good news for America and housing prices are reasonable which means that the recovery should be solid!
    May 19, 2015. 02:41 PM | Likes Like |Link to Comment
  • Mongolia reaches deal to restart development of Oyu Tolgoi mine [View news story]
    Not yet quite there but a big move in the right direction.

    Rio Tinto has made some minor consesions to get most of the outstanding issues off the table but nothing on phyase 2 starts till GOM agrees to financing and phase2 feasibility study. My read is that Tinto is not taking any chances - All the T's must be crossed and i's dotted. words from the GOM tend to have limited value.

    From the news release

    "Next steps toward the underground development include on-going
    discussions with the Government of Mongolia in relation to the
    2014 Feasibility Study and engagement with international financial institutions, export creditagencies and commercial banks to secure approximately $4billion in project financing. When all steps andapprovals on the path forward have been reached, the underground workforce will be remobilized."
    May 19, 2015. 10:51 AM | 1 Like Like |Link to Comment
  • Wall Street Breakfast: ECB Pledges To Boost Bond Buying [View article]
    Once the Greeks are done, then the Italians are next in line and so the message to the Italians has to be "do not bother getting in line". In order for this message to be heard loud an clear, Greece either has to make arrangements to pay the bills or get the Boot from the EEC. Nothing else will work.
    May 19, 2015. 10:44 AM | 2 Likes Like |Link to Comment
  • Saudi Arabia - Its Power Will Not Last [View article]
    70 years from now, the internal combustion engine (responsible for most oil consumption today) will have gone the way of the steam engine. This IMO means that the oil left in the ground then will not be worth nearly as much as it is today. The Saudis realize that they need market share in order to maintain their relevance in the oil markets and are taking a couple of steps in this regard. 1) they are moving as much of their own energy consumption to other sources of energy (like natural gas of which they have a lot) and 2) they have increased their drilling program considerably which should increase their maximum pumping capacity. These steps should let them supply more oil to the world market than they currently do and this will in turn give them the flexibility to adjust supply to the world market up or down as required to attempt to achieve their goals.
    Their is no doubt that oil as a transportation fuel will sometime in the future be replaced and I suspect that the Saudis are adjusting their market share and price in an attempt to push this day out as far as they can.

    JMO
    May 18, 2015. 08:10 AM | 2 Likes Like |Link to Comment
  • Avoid Cameco: It Has More Risk And No More Potential Than An Alternative [View article]
    Her is another way to look at Cameco. With Cameco you have the largest low cost uranium producer in the world and so the one thing it will not be doing is disappearing anytime soon. Having said this, their are a lot of negatives associated with the stock - the high price to earnings ratio, the overhanging tax dispute and the price of uranium which is still stuck on the lower end of the scale despite all the predictions.
    As such, I would avoid the uranium space altogether but keep an eye on Cameco. If a couple of the negatives hit it or the price of uranium fails to deliver, you could be looking at a $10 stock or less in fairly short order. You now have a bargain and out of favor/ biggest in its field low cost producers are my kind of stocks. You know that they will eventually turn around and based on the expected rewards and some dividend payout, the investor can usually ride it out to a handsome profit.
    My view on those trying to predict the price of anything going forward is that they just add to the "market noise". History has proven that these predictions are like broken clocks - mostly wrong and occasionally lucky enough to get it right.
    Avoid the noise and focus on buying discounted value that will in the long term perform. ;-)
    May 17, 2015. 10:39 AM | 2 Likes Like |Link to Comment
  • Alternatives To Fortescue Metals' Nationalistic Fervor Over Iron Ore [View article]
    Vale would love a increase in taxes in Australia - up goes Vale's market share! ;-)
    May 15, 2015. 02:37 PM | 1 Like Like |Link to Comment
  • Alternatives To Fortescue Metals' Nationalistic Fervor Over Iron Ore [View article]
    All Andy did was shoot his mouth off - far from doing anything illegal and especially so when the competition is refusing to play ball and laughing at you! He is basically sour grapes as his company is not exactly a low cost producer.
    May 15, 2015. 02:33 PM | 2 Likes Like |Link to Comment
  • Negative Expectations On Iron Ore And Coal Caused ArcelorMittal To Become Oversold [View article]
    With Iron ore, anyone trying to predict where it is going to go is really waiting their time. Vale, BHP and Rio Tinto are the players that will decide where Iron ore is going and they are not really telling anyone. They take actions and the price reacts is as good as it will get. The only thing that matters from a producers point of view is cost of production. The low cost producers will be fine, the high cost producers are toast and those in between will suffer. Let me put it another way - where were all the geniuses predicting $50 iron ore when it was trading at $160?? their weren't any!!:-)
    May 15, 2015. 10:03 AM | Likes Like |Link to Comment
  • Negative Expectations On Iron Ore And Coal Caused ArcelorMittal To Become Oversold [View article]
    As far as Iron ore shipments are concerned, you need to compare Q1-14 to Q1-15 if you want to see whats really going on. Iron ore shipments are impacted by seasonality and weather more than people think. When you compare same quarters, you see that they have actually increased.
    MT has been working at reorganizing and rationalizing operations and cutting costs for a while now. They have gone a long way in Europe and are now reaping the benefits. The purchase of the Calvert mills allows them to do the same thing in North America and they are working on it. Because of their size and locations, they have geographic synergies that other in the business can only dream off. Their move into the Chinese market has been focused on higher end automotive steels and this largely lets them avoid the steel troubles in China.
    IMO, MT is the best play in steel right now. Long MT
    May 15, 2015. 09:56 AM | 1 Like Like |Link to Comment
  • Wall Street Breakfast: Netflix In Talks To Enter China - Reports [View article]
    Yes as it just results in jobs disappearing, prices going up and just makes those earning above the minimum that much poorer as they will not likely be getting a raise because minimum went up. Raising minimum wage is no substitute for fixing the problem.
    May 15, 2015. 09:45 AM | 4 Likes Like |Link to Comment
  • Shale oil producers ready to bring rigs back into service [View news story]
    JMO -This could be part of the Saudi game plan. Make it look like the price is rebounding so that these players will come out from hiding and start spending money only to kick them in the teeth once they have been strung along for a while. The Saudis are by far the low cost producers and while North American and world rig count has been dropping, Saudi rig count has been going up.


    Sounds like they are getting ready for a real long battle for market share to me!!!!
    May 14, 2015. 04:15 PM | 6 Likes Like |Link to Comment
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