More from Omaha: Andrew Ross Sorkin asks if Dodd-Frank banking rules will affect the profitability of Berkshire Hathaway's (BRK.B) investments. Buffett says investments in US Bancorp (USB), M&T Bank (MTB), and similar holdings are not likely to be disproportionately affected, although returns on tangible equity at some holdings will be lower going forward. Buffett also opines on speculation, saying subsequent bubbles will not likely be the fault of the financial sector. Munger: "I do not see why massive derivative books should be mixed up with insured deposits ... [I don't like] bankers acting like investment bankers." (NY Times, WSJ) [View news story]
I think Buffett would say that bankers should be more like the ones he invests in.
Linn Energy And LinnCo Increase Value To Investors With Monthly Dividends [View article]
If you want to own LNCO, why not buy BRY? The arbitrage discount is about 10% and the merger is scheduled for prior to July 1. A 10% gain in about 2 months is pretty sweet. Management said during the conference call that the merger was on schedule and they had no reservations about it going through. There are some law suits by BRY shareholders wanting more, but share price is up nicely since the merger announcement and the current arbitrage discount gives its stock even more room to rise. Check it out and do your own DD.
Linn Energy Vs. LinnCo: And The Verdict Is... [View article]
Right now, there is arbitrage investing in BRY and LNCO. Many arbitrage investor will go long BRY and short LNCO. This banks the arbitrage spread and hedges out the risk of a declining LNCO price. This will probably dampen the price of LINCO until the merger closing, supposedly in June. You should at least be aware that this is happening. You can now get LNCO at a 7% discount by buying BRY.
Quasi-DGI Portfolio Vs. S&P 500: Part 2 [View article]
You can buy LNCO at a discount by buying BRY. The arbitrage discount is about 5.5% and the purchase is to close in 3mos or less. The down side is that you will probably get a K1 to file on your taxes. I like the value orientation of your picks. I like the diversity of your holdings. You might consider a healthcare company as a future add (eg, TEVA, but I haven't studied the options like you would).
Molycorp (MCP +4%) is maintained at Neutral by Goldman Sachs after reporting Q4 results, as the firm notes positives at MCP despite supply and demand challenges in rare earths this year. MCP's targeted cash production costs of $6-$7/kg is a sign of operational confidence in the near-to-medium term cost roadmap despite recent liquidity and management related turmoil, Goldman says. [View news story]
On the conference call, it sounded like the analysts were willing to give the new CEO time to right the ship. They had it in for Mark Smith... maybe he deserved it. Regardless, much better tone this time around. It was a surprise to hear him tie future production rates at the mine almost solely to sales of Xsorb... a nearly new water treatment product. I was surprised that there weren't hard questions about the size of the goodwill right off. I think some thought it would be larger. Will additional write offs be required?
Linn Energy's Acquisition Will Mean Dividend Growth For Investors [View article]
Correct me if I am wrong, but I read recently, that here is a huge deposit of oil and gas in California... waiting for someone to use newer technologies to get it out (and the political will to allow it).
Why Chevron Is The Best Supermajor Oil Company [View article]
It would seem to me that cash/share is meaningless to compare the "cash richness" of different companies. It does not account for differences in number of shares and price of shares (market cap). A better comparison would be (cash/share)/(share price). If you look at "cash richness" this way, TOT and BP have larger cash holdings relative to their capitalization than CVX.
Molycorp: Why A Chinese Takeover Will Never Happen [View article]
I agree that Congress would block a Chinese takeover of Molycorp, but I don't think that a Japanese, Korean, or Taiwan takeover would necessarily be blocked. I am not Molymet woudn't step up as they are aready largest owner of shares. They stepped up last time Molycorp needed cash.
Molycorp (MCP +5.8%) posts its second straight strong gain, as the picture grows brighter: Large stockpiles of rare earths are finally starting to dwindle, and top competitor Lynas is undergoing regulatory problems with Malaysia's government. How much higher can MCP climb? Oracle's Laurence Balter has a $50 price target, but shares still would be shy of their 2011 summer high near $7. [View news story]
Shares are tanking after hours, because CEO quit/fired. Nobody knows why.
Berkshire Hathaway: Attractive Entry Point For Long-Term Investors [View article]
Very nice article. The effects of global warming may imact the insurance business... in addition to low rates. Berkshire seems to be willing to walk away from unprofitable insurance business, when the premiums don't justify the risk. I am not so sanguine about BRK without Buffett at the helm. The board of directors will become more important to insuring that the right kind of people run the businesses. Regardless, good article...
J.C. Penney Inflection Point For Wealth Or Destruction [View article]
My wife won't go back until they return to the old, familiar format. She used to be a pretty good customer. Too bad to see the demise of an American icon... they lost their way, like Kmart and Sears.
The Farm Economy Is So Healthy, Some Government Subsidies Go To Millionaires [View article]
While not a farmer, I come from a family ancestry of farmers and still get some inheritance income from the family farm... and I live in the corn belt. I agree with most of your article about farm insurance and government subsidies. You won't find many farmers defending the farm program, because they are mostly conservative and republicans. Defending socialist programs is not in their DNA, but they all know that farmers would not survive without some kind of program. I fear that some day you will see most farmers as renters and REITs or hedge funds will own all the high priced farm land. I think that day is coming, because farmers won't be able to afford the land and what millionaire wants to farm? I am long CORN, DBA, and COW. I think it is too early to sell CORN and DBA... and pretty early to buy COW (my bet on higher prices down the road). -- erryl ps If you are reading this Dr, I have recently made a little money on FXS... your thoughts? I know it is somewhat a bet on the weak euro, but it seems to be working.
Is There A Problem With Dividend Growth Investing? [View article]
I start thinking about cults when the advocate claims the superiority of their investment method over others... an arrogance that their method is superior to most or all others. I didn't get that from your well written article. I don't invest like you do, but I can see that you are an excellent investor Thanks for sharing with us -- erryl
Linn Energy: Don't Believe The (Negative) Hype [View article]
More from Omaha: Andrew Ross Sorkin asks if Dodd-Frank banking rules will affect the profitability of Berkshire Hathaway's (BRK.B) investments. Buffett says investments in US Bancorp (USB), M&T Bank (MTB), and similar holdings are not likely to be disproportionately affected, although returns on tangible equity at some holdings will be lower going forward. Buffett also opines on speculation, saying subsequent bubbles will not likely be the fault of the financial sector. Munger: "I do not see why massive derivative books should be mixed up with insured deposits ... [I don't like] bankers acting like investment bankers." (NY Times, WSJ) [View news story]
Linn Energy And LinnCo Increase Value To Investors With Monthly Dividends [View article]
Linn Energy Vs. LinnCo: And The Verdict Is... [View article]
Quasi-DGI Portfolio Vs. S&P 500: Part 2 [View article]
Molycorp (MCP +4%) is maintained at Neutral by Goldman Sachs after reporting Q4 results, as the firm notes positives at MCP despite supply and demand challenges in rare earths this year. MCP's targeted cash production costs of $6-$7/kg is a sign of operational confidence in the near-to-medium term cost roadmap despite recent liquidity and management related turmoil, Goldman says. [View news story]
Linn Energy's Acquisition Will Mean Dividend Growth For Investors [View article]
Why Chevron Is The Best Supermajor Oil Company [View article]
Molycorp: Why A Chinese Takeover Will Never Happen [View article]
Molycorp (MCP +5.8%) posts its second straight strong gain, as the picture grows brighter: Large stockpiles of rare earths are finally starting to dwindle, and top competitor Lynas is undergoing regulatory problems with Malaysia's government. How much higher can MCP climb? Oracle's Laurence Balter has a $50 price target, but shares still would be shy of their 2011 summer high near $7. [View news story]
Berkshire Hathaway: Attractive Entry Point For Long-Term Investors [View article]
J.C. Penney Inflection Point For Wealth Or Destruction [View article]
Swedish Crona Trust Comes Through in a Pinch [View article]
The Farm Economy Is So Healthy, Some Government Subsidies Go To Millionaires [View article]
Is There A Problem With Dividend Growth Investing? [View article]