Right now any day I get off from work is a good day. Not that I dislike my work but I am well and truly buried right now. I mean, I like water too but staying below it too long can lead to a less than optimal outcome. I have been averaging a bit over 11 hours a day for the past 6 weeks or so and even been putting in time on the weekends as well. I was this close to going into work today for 4 or 5 hours. So needless to say, as tired as I've been, I'm sure the quality of my posts have been a bit off. I know the quantity has been as well. Sorry, guys and gals, man's gotta make a living.
At least the paychecks have reflected my worker bee status of late. I'm actually earning almost as much as the PQ does. Last year I earned about 20% more in OT pay over my regular pay during the year. This year I am almost 3/4 of the way to that amount already. So while I'm a tired worker bee, I am also a decently paid one too. But man is it cutting into my free time.
I used to get up at 6:30 everymorning and arrive at work around 7:45. I'd work till 5:15 or 5:30 and take an hour lunch. Now I'm up at 5:15, into work between 6 and 6:15 and work till around 6 pm. Lunch, when I take one, is a half hour at most. I usually have 2 to 3 hours on the phones everday. Almost every shift is one phone call after another. I then spend an hour taking emails and logged calls into our work flow. Except it usually takes about 2 hours to complete one hours work. So generally 4-5 hours of my day is taken up by tasks that don't let me address my own pile of work. And it's the same for almost everyone else in the department. What makes it worse is that work is coming in at a higher rate than we can do it. We have more people in the department than ever before but because of changes in the tax laws that went into effect in 2011 and the changes in our software, we are receiving more work than ever before. We normally get a bit buried this time of year as it is and last year was busier than any other year since I started here. This year has made last year look like a picnic.
I checked my workflow list yesterday for fun. I have work scheduled all the way out to May 25th already. That's a lot to catch up on. We are frustrated, our clients are frustrated, our financial advisors are frustrated. The software is not doing all it was supposed to do, a lot of bugs are still being worked out still, and it slows down how we process things. So our work is taking longer to complete as well. I got yelled at by an FA last week. I let it go but this guy is a bit of a jerk in the best of times. When I explained the issues we were having he said how he didn't want to hear it. When he said we should work overtime I was ready to come through the phone lines and choke his miserable chicken neck. Instead I refrained from even mentioning how much OT we were already putting in and ended the call with my usual grace and tact.
Well enough of my work trials, y'all don't need to be bored by that crap. And as I mentioned, I am making a bit of scratch out of all this so I can't complain. It would be nice not to be ready to go to bed at 9:30 every night but that is sometime in my future. Like August or so. It has made it very difficult to play the 8pm tourney at Derby Lane on Saturday nights. I'm drinking coffee at 9 to keep from getting sleepy before 10. Not the best mindset to play poker with. I did manage a decent score a few weeks back but the PQ has done far better. She just missed the money last Saturday going out 7th.
On other fronts, the stock market has been acting pretty weird lately. Started out the year going gangbusters but in March it got pretty choppy and so far this month has been blah. Gold has been getting hit pretty bad but I've taken the opportunity to buy some more gold mining stocks. I really fear the market is in for a big downturn in the near to mid term. We have pumped so much money into the economy that some bad inflation is a foregone conclusion. So my belief is that prices for things like gold will eventually head back up and when they do they will head up quickly. Basically anything denominated in US dollars is going to feel this pinch. Unfortunately I also believe this country is in for some pretty hard times. Using the government to spend our way out of all of our bad decisions does not solve the problems we have, it pushes them down the road further. Eventually the day of reckoning must come. Just like the recession in 2008 was the eventual day of reckoning after the tech bubble burst in 2000, the spending we have done to save us from that crash has delayed the day of reckoning from all of the excesses of the past 10 years.
I remember those days well in late 2008 when it looked like all of the markets were imploding and the financial companies were teetering on the edge of collapse. Even the survivors like Goldman Sachs and Morgan Stanley were this close to going under as it was a domino effect where each of the Wall St players that folded had so many links to all of the other ones that they all took a hit. The amount of leverage these firms were using to boost their profits was enormous, and when times went bad, all of that leverage started working against them. All of the firms that got in trouble and either went bankrupt or merged like Lehman Brothers, Bear Stearns and Merrill Lynch had billions in reserve. More than enough money to tide them over through any normal downturn. But this wasn't normal and when you're leveraged 35-1, every dollar down costs you $35 and that starts to add up to billions pretty fast when you have that much crap outstanding.
Hell even my conservative company was worried and when the government bailout was proposed, our CEO was one of the big backers of the plan. Though we aren't a Wall St firm, we are a pretty big regional player. And based on what was happening, the Fed backstopping all of these idiot firms kept things from going completely in the crapper. But maybe that wouldn't have been such a bad thing. The following US firms would have definitely gone bankrupt: Merrill Lynch, (bought out by Bank of America before it could go under), Bear Stearns (bought out by JP Morgan as it was about to go under), Lehman Brothers who did go bankrupt, AIG, Citigroup, Bank of America, Wachovia Financial, Goldman Sachs, and Morgan Stanley, Fannie Mae and Freddie Mac at the very least. We might also have lost JP Morgan, Regions Financial and BB&T as well. The first TARP bailouts prevented wholesale bankruptcies of most of the large commercial and investment banking institutions. The only large banks that were in good enough shape to weather this were Wells Fargo and US Bancorp and Wells might not have been in serioud trouble as well.
In my opinion, the problems with the bailouts go to the following ones. The feds pitched more money into AIG, Citigroup, and then GM, Chrysler, etc. Instead of letting these firms fold and others that do business with them take a haircut (Goldman would have taken a nice beat down as they had a lot of business tied in with AIG, if AIG declared bankruptcy after the initial crisis passed, Goldman takes a major bath - WHICH THEY RICHLY DESERVED. They knew the risks they were involved in and ignored them. If they all go bankrupt in September or October 2008, who knows how far the damage to the financial system goes. That is what truly scared everyone. But if they stop at the single backstop, they know Goldman, Morgan Stanley, etc are not going under while AIG and Citigroup are gonzo. GM would also have gone under. Hell they still declared bankruptcy even with government help. Now the taxpayers own a big chunk of GM and I tell you what, I don't want a piece of that company. These bankruptcies would have allowed the system to wash out toxic assets, a number of poeple would have had to eat a lot of crow, and some people would have gone to prison as they should have. And bankruptcies, while bad for the people working for those companies, open things up for other companies to come in. Ford is being penalized because they saw the future and took major risks to clean themselves up before the recession. They got healthy at just the right time because they didn't keep going business as usual back in 2005 -2008. Now they have to compete with GM who did everything wrong and yet gets government backing to come back. Is that fair to Ford and all of their employees and stockholders?
Anyway, to wrap up, I feel these chickens are going to come home to roost and I fear it will be sooner rather than later. The way the economies of the world are now interlocked almost makes it a foregone conclusion that the next crisis will be even worse for the unprepared. And though you may think you have time to plan for this, these crises seem to spring up very quickly. My preparations have involved selling off some good winners and raising cash. I've also used some of that cash to buy more gold/silver mining stocks over the past few weeks. I am really looking at the miners who are increasing reserves and are low cost producers. Both Goldcorp (GG) and Yamana Gold (AUY) are among the lowest cost producers in the world. Even if the price of gold fell under $1000 an ounce (and if it does, you really ought to think of buying some) these 2 companies will make money as their cost of production is only around $250 an ounce or less. Others I like are companies that are increasing both their reserves and production. Brigus Gold (BRD) and Paramount Gold & Silver (PZG) are doing this quite well and are really cheap. Another I took a flyer on is Aurcana Corp. They are a silver miner who is opening up a new mine that goes into production this year. They will be tripling their production this year and next as this new mine has great deposits but won't last for long. As long as the price of silver remains where it is, they should show some terrific profits over the next 2 years.
I've also taken on some oil stocks. Deepwater driller Seadrill (SDRL) is a bit risky but pays a great dividend and deepwater is where the profits are for drillers right now. Norway's Statoil (STO) is really doing well and has some major new discoveries they are bringing to market. They pay a solid dividend as well. Also, as a Norwegian company, they are unimpacted by the fall of the dollar or Euro as the Norwegian Kroner is a very very strong currency.
I feel I've taken a bit of a risky position with my portfolio though going to 30% or more in cash does give me a backstop and lets me buy good stocks at great prices should the market tank again. I just think a major market downturn is in the works and I'm putting my money that way. I may be way too early for it and be ruining my chances of making good money over the next couple of years, but I'm willing to wait it out until then. Based on what I'm seeing, the markets are just too jittery and there are too many things that can go wrong for everything to keep going up like they did in the beginning of the year.
Well enough for now. My Friday was pretty good, relaxing and being a slug much of the day. I went out to dinner with the PQ, our daughter, and one of our nieces then hit the wine store. I gave up wine for Lent this year so I stocked up for Easter as I plan on having a bit of wine that day. Then we hit the Twistee Treat for some ice cream (I'll take a chocolate dipped cone please) on the way back. It was quite a good Friday. I hope everyone else had a good Friday as well. Have a great weekend folks.
Showing posts with label stocks. Show all posts
Showing posts with label stocks. Show all posts
Saturday, April 7, 2012
Saturday, October 8, 2011
What can I say?
Not much to talk about today as I'm just not feeling it. Actually I'm not feeling overly well at this point. I started coughing a bit yesterday and by last night it was a full blown cold. At least it mostly waited until I was done refereeing but when I got home last night I started hacking up a storm. It's not better so far today either.
I've been a busy referee bee this week, had a JV game on both Wednesday and Thursday nights and then a varsity high school game last night. I can feel it in my knees this morning. Tonight I'm supposed to do 3 youth games and I hope I can hold up. I didn't think I'd make it through last night at one point. I was watching a play develop in front of me and to my right and as I started to turn I caught a blocker coming at me from my left out of the corner of my eye. He slams into a linebacker to my left and both of them end up into me. I really thought I was about to get flattened and to make matters worse, the running back turned upfield and gets hit right in front of me. I barely kept to my feet and that was a good thing as the whole pile of tacklers and running back end up at my feet. That was a close one.
I've been run into, blocked into, and a few times I've been knocked off my feet in games. Fortunately I've never found myself in the pile of people where the ball carrier gets tackled. That's where a lot of bad things happen. I even managed to tackle a kid earlier this year. It was one of the youth games a few weeks back. Down near the goal line a kid comes tearing through a hole and heads right at me. Now in those situations, I have nowhere to go and if I try I'll probably make things worse. I can't see where the tacklers are behind and to my side so if I step one way or the other, I may be stepping into more problems than I have in front of me. So my best bet is to stand there and let the kid decide whether to cut left or right then step the other way. I wait and this kid doesn't cut. He comes right at me and hits me in the thigh then falls to the ground. And then he's pissed I didn't get out of the way. Guess the kid never got the message. Maybe next time he will. Good thing he wasn't any bigger or I might have ended up in one of those piles. Anyway last night was the closest I've come to being in my own disaster.
Work has been the usual disaster lately. Seems like almost everything I touch turns into a huge mess that takes me hours to repair. It keeps me busy and gives me job security at least. I've been getting a bit of a reputation in my department for being a go to person for certain issues such as issues involving AT&T (figuring cost information for this company is a complete disaster if it goes back any time at all) and complex problems involving corporate actions. So one of the guys asks me about looking up an old price on GM.
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One of the stocks I will never buy as well as one of the vehicles I will never again own is General Motors. Besides being disgusted by how the whole GM bankruptcy was handled and the money the taxpayers forked over for that, I am really a bit peeved over how the current General Motors almost ignores the company history prior to 2009. Everything that happened prior to then was another company and they have gone out of their way in my opinion to disassociate themselves from their previous selves. And the way they tried to reorganize after the bankruptcy - with our governments assistance and insistance - and cut out the people who had a legal claim to GMs assets in favor of the unions who had no legal claim just made it worse. It got so bad the bond holders rebelled and threatened to back out of the deal. That would have forced the GM to dissolve and pay off the creditors rather than reorganize. Eventually bond holders were given a better deal in the new GM and they relented and the reorganization went through. Once the IPO for the new GM came to pass, old GM bondholders were given shares in the new GM as well as warrants allowing them to purchase more shares at set prices. There were a lot of bond holders so we had to process a lot of corporate actions to convert the bond holders shares to new common stock and warrant shares. I did much of that work as well as determining what the proper quantities and cost basis percentages would be. A bit later on I was trying to look up info on old GM and went to the corporate website where I found they basically ignored all of their history prior to 2009. Which I thought was pretty crappy of them but not unexpected. Some companies embrace their history, others ignore it and then repeat it.
**********************************************************************************
Because I was pretty involved in the corporate actions surrounding the reorganization, I've got a fair amount of GM info trapped in my noggin. So one of the reps had a question on getting prices for old GM shares and I gave him what the old GM stock symbol was as well as what I thought the old cusip. A cusip is a 9 digit number used to identify a stock in the US and every stock, mutual fund, and bond has a different one. When a company goes through a corporate action like a reverse stock split, a merger, or a name change they usually get a different cusip and to look up info on the old security, you need to know the old cusip. There are 3 stocks I have dealt with on a regular basis that require a lot of work to untangle sometimes, AT&T, Verizon, and GM. I know the cusip of the original AT&T stock by heart as well as Verizon's and I knew most of GM's cusip and guessed the rest. Which impressed a few of the people around me, though I don't know why. It's a 9 digit number, almost like knowing a phone number. So I know 3 phone numbers by heart. Or maybe I'm a bit anally retentive on numbers. I still remember my family phone number from when I grew up and we haven't lived there in 30 years. Anyway, because of this and a couple of other things, I've been getting a lot of requests for assistance on some complex issues. It eats into my time a little but I'm glad to share a little knowledge and help out my fellow man (and woman) on occasion.
No poker for me this weekend. The not so little girl is home from school for the weekend while we fix her car up. Her engine fan and a relay appear to be bad and the car runs hot when it sits in traffic too long. I'm so busy reffing this weekend besides coughing up a lung that I have no desire to play. I guess I'll get my gambling jones out by placing some short term investments today. Here's what I like today.
Give me Nebraska -10.5 vs Ohio State. Ohio State is in disarray and you know Bo Pellini is going to run the boys ragged after the pounding Nebraska took from Wisconsin last week. This is their Big 10 home opener and I figure they want to open up right in front of the home town fans.
I'll take Ga Tech -14.5 over Maryland. Since their season opening win vs Miami, Maryland has been in disarray winning only once over might Towson St and losing to West Virginia as well as getting pounded by Temple. GT has been a juggernaut offensive though their defense is not so great. You almost can't get a high enough line to not hit the over in their games. I'm tempted to play the over at 63.5 but I don't trust Maryland enough.
I'm looking at Texas +10 vs Oklahoma today. It's Texas/OU weekend today which means the State Fair of Texas is wrapping up again. I do miss Texas. Anyway though I like the spread a bit, I like the over/under a lot more. Both teams put up bunches of points. For Texas this is another revenge game as they have pounded both UCLA and Iowa St after losing to them last year. I doubt they pound OU but I do anticipate a shootout and I'll take over 56 here.
I also like the under in the Tennessee/Georgia game today. UGA is playing good defense and the only good defense that Tennessee played was against Florida where they were shut down completely. I look for UGA to do the same and score enough to carry the day. I'll take under 55.5
I'm looking at Arkansas -10 vs Auburn today. I'm not sure if I want to play it here but I like Arkansas and don't care for Auburn. Still Arkansas had an emotional come from behind win last week and maybe has a hangover this week. But they are a good young team playing at home.
That's my weekend in a nutshell it seems. I'm gonna take it easy until it's time to referee and make it through the day I hope. I may put in a couple of picks for the pros tomorrow as I'm looking at a couple of games. If I survive tonight. I hope you all stay lucky. Hope I do too.
I've been a busy referee bee this week, had a JV game on both Wednesday and Thursday nights and then a varsity high school game last night. I can feel it in my knees this morning. Tonight I'm supposed to do 3 youth games and I hope I can hold up. I didn't think I'd make it through last night at one point. I was watching a play develop in front of me and to my right and as I started to turn I caught a blocker coming at me from my left out of the corner of my eye. He slams into a linebacker to my left and both of them end up into me. I really thought I was about to get flattened and to make matters worse, the running back turned upfield and gets hit right in front of me. I barely kept to my feet and that was a good thing as the whole pile of tacklers and running back end up at my feet. That was a close one.
I've been run into, blocked into, and a few times I've been knocked off my feet in games. Fortunately I've never found myself in the pile of people where the ball carrier gets tackled. That's where a lot of bad things happen. I even managed to tackle a kid earlier this year. It was one of the youth games a few weeks back. Down near the goal line a kid comes tearing through a hole and heads right at me. Now in those situations, I have nowhere to go and if I try I'll probably make things worse. I can't see where the tacklers are behind and to my side so if I step one way or the other, I may be stepping into more problems than I have in front of me. So my best bet is to stand there and let the kid decide whether to cut left or right then step the other way. I wait and this kid doesn't cut. He comes right at me and hits me in the thigh then falls to the ground. And then he's pissed I didn't get out of the way. Guess the kid never got the message. Maybe next time he will. Good thing he wasn't any bigger or I might have ended up in one of those piles. Anyway last night was the closest I've come to being in my own disaster.
Work has been the usual disaster lately. Seems like almost everything I touch turns into a huge mess that takes me hours to repair. It keeps me busy and gives me job security at least. I've been getting a bit of a reputation in my department for being a go to person for certain issues such as issues involving AT&T (figuring cost information for this company is a complete disaster if it goes back any time at all) and complex problems involving corporate actions. So one of the guys asks me about looking up an old price on GM.
**********************************************************************************
One of the stocks I will never buy as well as one of the vehicles I will never again own is General Motors. Besides being disgusted by how the whole GM bankruptcy was handled and the money the taxpayers forked over for that, I am really a bit peeved over how the current General Motors almost ignores the company history prior to 2009. Everything that happened prior to then was another company and they have gone out of their way in my opinion to disassociate themselves from their previous selves. And the way they tried to reorganize after the bankruptcy - with our governments assistance and insistance - and cut out the people who had a legal claim to GMs assets in favor of the unions who had no legal claim just made it worse. It got so bad the bond holders rebelled and threatened to back out of the deal. That would have forced the GM to dissolve and pay off the creditors rather than reorganize. Eventually bond holders were given a better deal in the new GM and they relented and the reorganization went through. Once the IPO for the new GM came to pass, old GM bondholders were given shares in the new GM as well as warrants allowing them to purchase more shares at set prices. There were a lot of bond holders so we had to process a lot of corporate actions to convert the bond holders shares to new common stock and warrant shares. I did much of that work as well as determining what the proper quantities and cost basis percentages would be. A bit later on I was trying to look up info on old GM and went to the corporate website where I found they basically ignored all of their history prior to 2009. Which I thought was pretty crappy of them but not unexpected. Some companies embrace their history, others ignore it and then repeat it.
**********************************************************************************
Because I was pretty involved in the corporate actions surrounding the reorganization, I've got a fair amount of GM info trapped in my noggin. So one of the reps had a question on getting prices for old GM shares and I gave him what the old GM stock symbol was as well as what I thought the old cusip. A cusip is a 9 digit number used to identify a stock in the US and every stock, mutual fund, and bond has a different one. When a company goes through a corporate action like a reverse stock split, a merger, or a name change they usually get a different cusip and to look up info on the old security, you need to know the old cusip. There are 3 stocks I have dealt with on a regular basis that require a lot of work to untangle sometimes, AT&T, Verizon, and GM. I know the cusip of the original AT&T stock by heart as well as Verizon's and I knew most of GM's cusip and guessed the rest. Which impressed a few of the people around me, though I don't know why. It's a 9 digit number, almost like knowing a phone number. So I know 3 phone numbers by heart. Or maybe I'm a bit anally retentive on numbers. I still remember my family phone number from when I grew up and we haven't lived there in 30 years. Anyway, because of this and a couple of other things, I've been getting a lot of requests for assistance on some complex issues. It eats into my time a little but I'm glad to share a little knowledge and help out my fellow man (and woman) on occasion.
No poker for me this weekend. The not so little girl is home from school for the weekend while we fix her car up. Her engine fan and a relay appear to be bad and the car runs hot when it sits in traffic too long. I'm so busy reffing this weekend besides coughing up a lung that I have no desire to play. I guess I'll get my gambling jones out by placing some short term investments today. Here's what I like today.
Give me Nebraska -10.5 vs Ohio State. Ohio State is in disarray and you know Bo Pellini is going to run the boys ragged after the pounding Nebraska took from Wisconsin last week. This is their Big 10 home opener and I figure they want to open up right in front of the home town fans.
I'll take Ga Tech -14.5 over Maryland. Since their season opening win vs Miami, Maryland has been in disarray winning only once over might Towson St and losing to West Virginia as well as getting pounded by Temple. GT has been a juggernaut offensive though their defense is not so great. You almost can't get a high enough line to not hit the over in their games. I'm tempted to play the over at 63.5 but I don't trust Maryland enough.
I'm looking at Texas +10 vs Oklahoma today. It's Texas/OU weekend today which means the State Fair of Texas is wrapping up again. I do miss Texas. Anyway though I like the spread a bit, I like the over/under a lot more. Both teams put up bunches of points. For Texas this is another revenge game as they have pounded both UCLA and Iowa St after losing to them last year. I doubt they pound OU but I do anticipate a shootout and I'll take over 56 here.
I also like the under in the Tennessee/Georgia game today. UGA is playing good defense and the only good defense that Tennessee played was against Florida where they were shut down completely. I look for UGA to do the same and score enough to carry the day. I'll take under 55.5
I'm looking at Arkansas -10 vs Auburn today. I'm not sure if I want to play it here but I like Arkansas and don't care for Auburn. Still Arkansas had an emotional come from behind win last week and maybe has a hangover this week. But they are a good young team playing at home.
That's my weekend in a nutshell it seems. I'm gonna take it easy until it's time to referee and make it through the day I hope. I may put in a couple of picks for the pros tomorrow as I'm looking at a couple of games. If I survive tonight. I hope you all stay lucky. Hope I do too.
Saturday, August 27, 2011
A little this and that
Sorry about the dearth of posts and posting material, I just haven't had much to talk about. Work and the stock market have been my main focus lately, I've been too broke to play poker much except a little online and y'all don't want to hear about that anyway as it's been a series of AA losing to AK off due to a four flush etc. Everyday I when I get home from work the last thing I want to do is think of a post and write it up. I don't even have a title for this post, hopefully I'll think of one before the end of writing this one. I have kept up on my various blog readings and even commented on a few of them. You lucky souls know who you are.
Which gets me to the first thing I wanted to mention. Texting, twitter and the like are causing the death of English as we know it. Now don't get me wrong, I have no problem with the occasional common abbreviation in a post. I've used a few myself. And I also understand that some people use twitter and such alot and it carries over. But people if you're writing a blog post, try to at least write in a recognized language. The Poker Grump posted a portion of a blog post from some guy named Tony TBC and when I tried to read the post I had to stop and reread twice just to understand what the guy was saying. I'm not gonna repost it here nor will I debate the merits of pushing KK into an Ace high flop, but really guys, are we that text and twitter dependent that we can't blog our thoughts in complete sentences? Far be it from me to be the arbiter of blogging but reading blog posts like that is too hard. Like reading them in French or Spanish. I could do that but why, it would take me too long to figure out what the guy is saying. Unless this guy is the twitter version of e e cummings, I don't get it. And I really don't want to feel like I'm reading the mind of a guy tweaking on meth.
After my last post, I felt pretty smart when I went into work the next Monday to see a number of stocks I talked about go up on great news. National Oilwell Varco (NOV) announced a contract with Brazilian oil giant PBR for $1.5 billion and the stock went up over $3 that day. Transocean (RIG)announced a merger with Aker Drilling of Norway and was up about $2. I had talked to my wife that Research in Motion (symbol RIMM - makers of Blackberry phones) needed to think about maybe merging with either Nokia or Motorola Mobility as they are just getting crushed by the both Apple's Iphones and the Android based phones from HTC, Samsung, etc. I had predicted a few months before that RIMM would see $30/share long before $45/share again. This was when RIMM was over $38. RIMM was down under $25 after that. Monday morning Google announces a merger with Motorola. I felt so smart and also soooo dumb for not getting any of these stocks before this happened.
Fortunately the market felt my pain. Down a number of times since then. RIG was up, down, down some more and I got to pull the trigger on it at $50.60 per share. Money in the bank I hope. RIG closed at $53.12 so I'm up about 5% so far. Oil is going to be tricky to play in the near term I think. With Libya possibly coming back into production and oil already down from it's summer highs by a fair amount I think the short term trend for oil is down. If Libya starts producing again. Not a bad thing by and large as the rest of the economy should do better with lower oil prices. So now may not be the best time to pick an oil retailer like Exxon Mobil (soon though if the price heads lower) nor to pick a more marginal service company like say Weatherford International. But NOV and RIG are among the tops in services. And the companies that order from them think in much longer time frames than 6 months or a year. Oil fields need to be developed and the lag time on large equipment orders means companies are not going to want to cancel an order and go to the back of the line when oil prices take a down turn.
Oil prices are still going back up, lower prices now mean people have more to spend on other things besides gas for the cars, world economies improve, companies hire more, demand goes up, oil consumption goes back up, oil prices go back up. I haven't seen too many dinosaurs lately so it's doubtful oil is being created at a rate fast enough to replace what we're using. Oil prices may go down but unless some new cheap form of energy is presented to us that achieves world wide acceptance quickly, the price of oil is going back up again. Anyone ready for "To Serve Man"? There won't be an oil price collapse a la the 1980s, not unless a world wide depression happens soon. Just don't see that, at least not yet.
I was kicking myself a little bit after selling some of my holdings in AUY and AUQ and seeing them both go up another $1 per share but then gold prices went through a bit of consolidation and fell almost 200 an ounce which caused all the gold miners to go down with them. So I don't feel as bad. Unfortunately they didn't go down enough for me to rebuy and they went up strong the last 2 days. So I'm glad I bought RIG instead.
Did anyone catch the finals of American Ninja Warrior on NBC last weekend? I was surprised to see it on national television but it goes to show how much more mainstream Ninja Warrior has become. It apparently got good ratings for a Sunday night in the summer show. I've been watching the original Ninja Warrior for years and always enjoy new ones whenever they come on. Fascinating to see these guys, some just regular no name people who want to compete in this. One guy is in the military and has been competing on his vacation for the last few years. This year he finally made it and got to go to Japan. Did pretty well there too. Unfortunately none of the guys went all the way but one got close. It's just so hard to complete stage 3. I can't wait for the new Japanese episodes to air on G4TV.
I'm currently watching some High School football on tv while I write. South Panola Mississippi vs Hoover Alabama. Hoover is a perennial football power in Alabama and is often nationally ranked by USA Today. South Panola is nationally ranked this year while Hoover isn't (they are 15th in the southeast rankings) but Hoover is winning right now 3-0. ESPN is showing a bunch of high school games pitting top programs from different states against each other and sometimes in state rivals against each other. Last night Armwood HS of Tampa, usually a state powerhouse and ranked 9th nationally this year went to Vegas (without me) and took down Bishop Gorman who was ranked 11th nationally. I heard on the radio that some of the offshore betting sites were offering lines on these games and Armwood was a 7.5 point dog. But they've played in few of these games on ESPN before and they took the win. Looks a bit hot there in Alabama for these games. They are playing at Hoover who has a pretty big stadium apparently and they just played another game before this one there as well. I enjoy the games and also watch the refs to see if I can see what they see.
Wow Hoover has taken the ball all the way from inside their 5 down to Panola's 5. Almost got to see the Umpire run over on that last play. Hoover has been moving the ball on a few quick slant passes and they just faked a pass, the umpire stepped up to cover the line of scrimmage and the QB ran into the hole his line created and almost creamed the umpire as did one of the guys chasing him. That's what I fear most as an umpire. It's often not the running back, who can see you and avoid you, but the guys chasing him. They are focused on the runner and might see you at the last second when the runner cuts sharply and they can't. Or they hit the runner into you and everyone goes down in a heap. They got pads, I don't. The other thing that worries me is having someone get blocked into my legs, especially from behind. That happened to me in one game. A running play went to my right. I turned to follow the play and a guy behind me got blocked and fell right across the back of my legs. At the time my left knee had a partially torn ACL and I spin wrong or plant it sometimes and have it start to buckle. So as soon as I felt this guy hit my legs I thought "Oh shit there goes the knee." I didn't feel any pain though when he rolled off. The head ref stops the game and comes running over as I got up rather shakily and tested my knees. Surprisingly there wasn't any damage. I got lucky. I've seen a few refs not get so lucky, one of them had to go to the hospital.
Last weekend I went down to Manatee County to do a scrimmage for Bradenton Bayshore high school. The coach asked for us to send down some refs so he could run scrimmages with his 1st and 2nd teams and get his players ready to work refereed games. We didn't call it really tight but called all the obvious stuff. It was HOT even though we started in the morning. Of course August in Florida is not known as a particularly cool month. No major issues, though the play was a bit rough and out of sync sometimes but better than I expected. I banged one kid for a couple of holding calls as he kept getting his hands outside the defender's frame and holding him while blocking. But no one ran me over, only one play got a little antsy and afterward the coach asked us all to talk to the team and let them know what we saw, which was good to let the kids know what we are looking for and where they need to improve.
Finally I want to comment on women in poker. Josie had a post about her recent experiences at Foxwoods and what she had to deal with in her tourney. I know the Poker Queen has had moments in tourneys as well. She was surprised when I told her that some guys feel threatened by a woman at the poker table. Some just cannot deal with losing to a woman and so when they see a woman doing well, they will do anything to get rid of her. Poker also has its share of angle shooters and it seems Josie ran across one. The one thing I can tell Josie is to ignore these guys and make them pay at some point. But don't go out of your way to do that. You play your normal game, you make them face you when you're comfortable, and you take them out. I know the wife has been last woman left in a number of tourneys and it seems all the guys are trying to take her out. It's not all of them I know but all it takes is a couple who always raise your blinds and it feels like all of them are ganging up on you. The second thing I would have told Josie is that anytime someone feels he needs to yell at you, you get the floor over there and get his ass warned. And if the first guy you call over won't do it, keep calling guys over until you get someone over who will. Abusing another player, and yelling is abuse, is not allowed at any decent place I've been to. I've caught a couple of dealer mistakes myself so I know they happen. That one was too late to correct by the time it happened if the floor wasn't willing to go to video. I'd have been royally pissed if it had happened to me as well but short of taking the asshole outside and whipping his ass, hard to do when you're 5 foot nothing weighing a hundred and nothing and hanging with the best college football team in the land. Oops, got distracted there. Anyway, outside of being mad and frustrated, the only thing she could have done after that was to go to the floor and tell them she wanted them to review the video on that table and not let that dealer work anything until she got better training. No consolation to her after the fact I'm sure. I know one time I did have the Hard Rock go to video to correct an error but that was a table game so there wasn't a tourney clock or anything.
Well enough for now. Maybe I should post more often so I can have fewer topics to post on at once. Or maybe not. Oh one last thing. I hope all of you up in NY and New England are battening down the hatches for a little blow. Irene should only be a category 1 when it hits but there will still be a lot of rain, a good bit of wind, some flooding, and the possibility of tornados to boot. Nothing but fun there. Everybody watch out. Amazingly I have never been through a major hurricane even though I've lived in Florida for 24 years now. Something about the currents and winds and the shape of the state here makes Tampa Bay an unlikely hurricane landfall. Had a number come close and brush by to the west or hit south of here. Charley in 2004 was supposed to hit directly on Tampa Bay but took a right turn and hit Ft Myers about 2 hours south of here. Charley was a strong category 4 hurricane but not a big one in size so we got some wind and rain but nothing worse than tropical storm strength. And that's what we usually get. The last big hurricane that actually hit here was in 1921 if you can believe that. Hell Rhode Island got lambasted in 1938 and 1954 (twice, one at low tide so not bad flooding) and 1985 was fairly strong as well. Apparently there is more of a chance of being hit by a bad hurricane in New England than in Tampa. Stay safe up there and stay lucky.
Which gets me to the first thing I wanted to mention. Texting, twitter and the like are causing the death of English as we know it. Now don't get me wrong, I have no problem with the occasional common abbreviation in a post. I've used a few myself. And I also understand that some people use twitter and such alot and it carries over. But people if you're writing a blog post, try to at least write in a recognized language. The Poker Grump posted a portion of a blog post from some guy named Tony TBC and when I tried to read the post I had to stop and reread twice just to understand what the guy was saying. I'm not gonna repost it here nor will I debate the merits of pushing KK into an Ace high flop, but really guys, are we that text and twitter dependent that we can't blog our thoughts in complete sentences? Far be it from me to be the arbiter of blogging but reading blog posts like that is too hard. Like reading them in French or Spanish. I could do that but why, it would take me too long to figure out what the guy is saying. Unless this guy is the twitter version of e e cummings, I don't get it. And I really don't want to feel like I'm reading the mind of a guy tweaking on meth.
After my last post, I felt pretty smart when I went into work the next Monday to see a number of stocks I talked about go up on great news. National Oilwell Varco (NOV) announced a contract with Brazilian oil giant PBR for $1.5 billion and the stock went up over $3 that day. Transocean (RIG)announced a merger with Aker Drilling of Norway and was up about $2. I had talked to my wife that Research in Motion (symbol RIMM - makers of Blackberry phones) needed to think about maybe merging with either Nokia or Motorola Mobility as they are just getting crushed by the both Apple's Iphones and the Android based phones from HTC, Samsung, etc. I had predicted a few months before that RIMM would see $30/share long before $45/share again. This was when RIMM was over $38. RIMM was down under $25 after that. Monday morning Google announces a merger with Motorola. I felt so smart and also soooo dumb for not getting any of these stocks before this happened.
Fortunately the market felt my pain. Down a number of times since then. RIG was up, down, down some more and I got to pull the trigger on it at $50.60 per share. Money in the bank I hope. RIG closed at $53.12 so I'm up about 5% so far. Oil is going to be tricky to play in the near term I think. With Libya possibly coming back into production and oil already down from it's summer highs by a fair amount I think the short term trend for oil is down. If Libya starts producing again. Not a bad thing by and large as the rest of the economy should do better with lower oil prices. So now may not be the best time to pick an oil retailer like Exxon Mobil (soon though if the price heads lower) nor to pick a more marginal service company like say Weatherford International. But NOV and RIG are among the tops in services. And the companies that order from them think in much longer time frames than 6 months or a year. Oil fields need to be developed and the lag time on large equipment orders means companies are not going to want to cancel an order and go to the back of the line when oil prices take a down turn.
Oil prices are still going back up, lower prices now mean people have more to spend on other things besides gas for the cars, world economies improve, companies hire more, demand goes up, oil consumption goes back up, oil prices go back up. I haven't seen too many dinosaurs lately so it's doubtful oil is being created at a rate fast enough to replace what we're using. Oil prices may go down but unless some new cheap form of energy is presented to us that achieves world wide acceptance quickly, the price of oil is going back up again. Anyone ready for "To Serve Man"? There won't be an oil price collapse a la the 1980s, not unless a world wide depression happens soon. Just don't see that, at least not yet.
I was kicking myself a little bit after selling some of my holdings in AUY and AUQ and seeing them both go up another $1 per share but then gold prices went through a bit of consolidation and fell almost 200 an ounce which caused all the gold miners to go down with them. So I don't feel as bad. Unfortunately they didn't go down enough for me to rebuy and they went up strong the last 2 days. So I'm glad I bought RIG instead.
Did anyone catch the finals of American Ninja Warrior on NBC last weekend? I was surprised to see it on national television but it goes to show how much more mainstream Ninja Warrior has become. It apparently got good ratings for a Sunday night in the summer show. I've been watching the original Ninja Warrior for years and always enjoy new ones whenever they come on. Fascinating to see these guys, some just regular no name people who want to compete in this. One guy is in the military and has been competing on his vacation for the last few years. This year he finally made it and got to go to Japan. Did pretty well there too. Unfortunately none of the guys went all the way but one got close. It's just so hard to complete stage 3. I can't wait for the new Japanese episodes to air on G4TV.
I'm currently watching some High School football on tv while I write. South Panola Mississippi vs Hoover Alabama. Hoover is a perennial football power in Alabama and is often nationally ranked by USA Today. South Panola is nationally ranked this year while Hoover isn't (they are 15th in the southeast rankings) but Hoover is winning right now 3-0. ESPN is showing a bunch of high school games pitting top programs from different states against each other and sometimes in state rivals against each other. Last night Armwood HS of Tampa, usually a state powerhouse and ranked 9th nationally this year went to Vegas (without me) and took down Bishop Gorman who was ranked 11th nationally. I heard on the radio that some of the offshore betting sites were offering lines on these games and Armwood was a 7.5 point dog. But they've played in few of these games on ESPN before and they took the win. Looks a bit hot there in Alabama for these games. They are playing at Hoover who has a pretty big stadium apparently and they just played another game before this one there as well. I enjoy the games and also watch the refs to see if I can see what they see.
Wow Hoover has taken the ball all the way from inside their 5 down to Panola's 5. Almost got to see the Umpire run over on that last play. Hoover has been moving the ball on a few quick slant passes and they just faked a pass, the umpire stepped up to cover the line of scrimmage and the QB ran into the hole his line created and almost creamed the umpire as did one of the guys chasing him. That's what I fear most as an umpire. It's often not the running back, who can see you and avoid you, but the guys chasing him. They are focused on the runner and might see you at the last second when the runner cuts sharply and they can't. Or they hit the runner into you and everyone goes down in a heap. They got pads, I don't. The other thing that worries me is having someone get blocked into my legs, especially from behind. That happened to me in one game. A running play went to my right. I turned to follow the play and a guy behind me got blocked and fell right across the back of my legs. At the time my left knee had a partially torn ACL and I spin wrong or plant it sometimes and have it start to buckle. So as soon as I felt this guy hit my legs I thought "Oh shit there goes the knee." I didn't feel any pain though when he rolled off. The head ref stops the game and comes running over as I got up rather shakily and tested my knees. Surprisingly there wasn't any damage. I got lucky. I've seen a few refs not get so lucky, one of them had to go to the hospital.
Last weekend I went down to Manatee County to do a scrimmage for Bradenton Bayshore high school. The coach asked for us to send down some refs so he could run scrimmages with his 1st and 2nd teams and get his players ready to work refereed games. We didn't call it really tight but called all the obvious stuff. It was HOT even though we started in the morning. Of course August in Florida is not known as a particularly cool month. No major issues, though the play was a bit rough and out of sync sometimes but better than I expected. I banged one kid for a couple of holding calls as he kept getting his hands outside the defender's frame and holding him while blocking. But no one ran me over, only one play got a little antsy and afterward the coach asked us all to talk to the team and let them know what we saw, which was good to let the kids know what we are looking for and where they need to improve.
Finally I want to comment on women in poker. Josie had a post about her recent experiences at Foxwoods and what she had to deal with in her tourney. I know the Poker Queen has had moments in tourneys as well. She was surprised when I told her that some guys feel threatened by a woman at the poker table. Some just cannot deal with losing to a woman and so when they see a woman doing well, they will do anything to get rid of her. Poker also has its share of angle shooters and it seems Josie ran across one. The one thing I can tell Josie is to ignore these guys and make them pay at some point. But don't go out of your way to do that. You play your normal game, you make them face you when you're comfortable, and you take them out. I know the wife has been last woman left in a number of tourneys and it seems all the guys are trying to take her out. It's not all of them I know but all it takes is a couple who always raise your blinds and it feels like all of them are ganging up on you. The second thing I would have told Josie is that anytime someone feels he needs to yell at you, you get the floor over there and get his ass warned. And if the first guy you call over won't do it, keep calling guys over until you get someone over who will. Abusing another player, and yelling is abuse, is not allowed at any decent place I've been to. I've caught a couple of dealer mistakes myself so I know they happen. That one was too late to correct by the time it happened if the floor wasn't willing to go to video. I'd have been royally pissed if it had happened to me as well but short of taking the asshole outside and whipping his ass, hard to do when you're 5 foot nothing weighing a hundred and nothing and hanging with the best college football team in the land. Oops, got distracted there. Anyway, outside of being mad and frustrated, the only thing she could have done after that was to go to the floor and tell them she wanted them to review the video on that table and not let that dealer work anything until she got better training. No consolation to her after the fact I'm sure. I know one time I did have the Hard Rock go to video to correct an error but that was a table game so there wasn't a tourney clock or anything.
Well enough for now. Maybe I should post more often so I can have fewer topics to post on at once. Or maybe not. Oh one last thing. I hope all of you up in NY and New England are battening down the hatches for a little blow. Irene should only be a category 1 when it hits but there will still be a lot of rain, a good bit of wind, some flooding, and the possibility of tornados to boot. Nothing but fun there. Everybody watch out. Amazingly I have never been through a major hurricane even though I've lived in Florida for 24 years now. Something about the currents and winds and the shape of the state here makes Tampa Bay an unlikely hurricane landfall. Had a number come close and brush by to the west or hit south of here. Charley in 2004 was supposed to hit directly on Tampa Bay but took a right turn and hit Ft Myers about 2 hours south of here. Charley was a strong category 4 hurricane but not a big one in size so we got some wind and rain but nothing worse than tropical storm strength. And that's what we usually get. The last big hurricane that actually hit here was in 1921 if you can believe that. Hell Rhode Island got lambasted in 1938 and 1954 (twice, one at low tide so not bad flooding) and 1985 was fairly strong as well. Apparently there is more of a chance of being hit by a bad hurricane in New England than in Tampa. Stay safe up there and stay lucky.
Sunday, August 14, 2011
All this for 1.5%?
Sorry to be talking stocks again but really, what else has been happening this week of greater import? I mean outside of the judge telling Casey Anthony "No darlin, being in jail does not count toward your probation and you're also not considered to be fulfilling your probation by staying up north and being waited on hand and foot by some Lightbulb guy in Illinois" there really wasn't a lot going on away from the markets.
The market got crushed on Monday losing over 600 points in the Dow. Tuesday started well with the Dow going up 200 points in the morning prior to the Fed meeting. After the Fed opened their mouth however, everyone changed their minds apparently and the market started tanking. By 2:30 its down 200 points. Seemed like people were expecting Big Ben Bernanke to come out and say something like he was gonna go to the Pres and get another round of Quantitative Easing going to "stimulate" the economy. Didn't happen. I think he knows what a hard sell that would be to the American public. But Wall St has never seen a government handout it couldn't make money from and they were hoping. Still once the impact of what the Fed talked about sunk in people started to realize the Fed just promised not to raise interest rates for 2 more years. And they started buying. And buying. The market started shooting up and by 3:30 had gone up 300 points from the low and was +100. But it didn't stop there. It just kept going up and up. By 4pm close the Dow was up over 400 points. In the hour and a half before close it went up over 600 points.
Wednesday, Mr Hyde returned. The market started down and just got downer. Every time I looked it was getting worse. By lunch the Dow was down over 300 and shoing no signs of stopping. I've got stocks losing money hand over fist on the down days, making some back on the good days then giving it all back plus some on the next bad day. I'm kicking myself for not selling out of Sanofi Aventus when it reached 40 a few weeks back. I was torn then and I'm still torn. I really do believe this stock gets to 50 in the next 12 months if Europe doesn't completely implode. If there's another flu scare this winter it could get there even faster as Sanofi makes something like 40 % of the flu vaccines in the world. And as I sit the stock keeps falling. I could have sold 2 weeks ago at 40 and bought back in at 32 this week. But I digress. While almost all my other stocks are tanking, my gold miners are making money. The worse the carnage got on Wednesday, the higher gold went, breaking over 1800 and ounce. I watched 2 of my stocks hitting new yearly highs and decided I'd be a fool not to capture some of that. So I put in sell orders for both Yamana Gold who I have owned for the past 2+ years and for Aurico Gold who I've had about 6 months. Sold half of my position in each stock for a very nice profit. Now I have money to use for some buys if the market tanks again next week.
By the end of Wednesday, the Dow is down another 500+ points. UGLY. It's looking like a full blown bear market is coming into play. Two out of 3 days of minus 500 points or more. Not looking good at all. Then Thursday comes along and the market gets into a buying spree. All day long it goes up. Just about all of my stocks are up but the gold stocks aren't going up much this day. Gold is kinda stalling out after the Chicago Board of Options Exchanges decides to raise the margin requirements for traders who buy and sell gold futures contracts. Gold prices stay about even on Thursday and lose about 30 bucks an ounce on Friday to close out the week at $1755 an ounce. Both stocks I sold finish a little lower than where I sold at.
Friday is another good day in the markets though not nearly as big a day as Thursday. The Dow finishes up about 125 points though many of my stocks do not go up much and my gold stocks are all down a little. The markets seemed to be taking a little break after the past week plus of yo yo-ing up and down. By the end of the week the Dow is down 165 points from it's starting place or about 33 points per day on average. Down just a bit under 1.5%. But how it got here is really the story. When you look at it, the market has really been in a downward trend for about a month broken by a few good up days. Since 7/21, the Dow has given up about 1500 points which is quite a bit and if you take into account the low point it reached on Tuesday, that's over 2000 points.
My take - I don't think a massive bear market recession like we saw in late 2008 and early 2009 is going to happen. But people are nervous and the money sloshing around in the system (from QE1 and 2) is chasing two things, returns and safety. When the economy looks good, money piles into stocks and you see the Dow go up 90% in 2 years. When things look less good, money flows out of stocks just as quickly as people buy Treasuries, precious metals, or anything else that is going to provide some return without losing them money. Why else buy a TBill? The return is less than 1% per annum. You lose money when you include the inflation. But your principal is still there. Buy the wrong stock and even with a dividend you can lose half your investment. Even most "safe" stocks in a bad market can lose quite a bit. Take Exxon-Mobil, one of the safest and best run companies in the market. Between August 1, 2008 and March 5, 2009 it lost 22.5%. Which beat the actual market return significantly between those dates but that's little solace to the retiree who may need to sell that stock to live on. So money runs from the "unsafe" stocks and once that starts its almost a self fulfilling prophecy as institutional money managers join in the rout. No one wants to be the last man standing when money is flying out of something.
So as I said before, I don't think we have to fear a massive recession this time. The issues in the markets with toxic debt, over leveraged banks, etc are not still waiting to come down and crush everyone. But having said that, people are coming to realize the US economy is not growing like they want it to. And people are nervous and pulling money out to buy safe stuff. The Fed and the government don't have the tools they had in 2008 to help the economy along. Of course they probably shouldn't have been helping it like they did already. Those birds will come home to roost down the road but that's a rant for another post. Anyway, though the Fed's tools are more limited now, they did use the one tool they did have when they basically said, "Hey, we won't raise interest rates for another 2 years." Once traders had digested that information they came to realize that would be good for a number of industries like commodities.
What does this mean? Well I don't expect the American consumer to go completely into a shell though I still don't think you will see the massive spend-a-thon like there was from 2002 - 2007 from people. But that low interest rate will keep money out there sloshing around and all the money in the system already must lead to higher inflation sometime down the road. Higher inflation will also lead to a devalued dollar which means the price of all commodities goes up. So expect higher prices for foodstuffs, metals, steel, iron ore, oil which leads to higher prices for just about everything else down the line. Stuff I want to invest in are the companies producing them or the companies that support them. And some of them are now on sale.
You can get premier deepwater driller Transocean (RIG) at a little over 55 - about 10% above their yearly low - with a dividend over 3%. Or you can wait and see if the market gets pounded again and take a shot at getting it for a lower price. 2 oil producers/sellers that I like are Exxon-Mobil (XOM) and Conoco-Phillips (COP). Exxon has proven time and again that they know what they're doing in the oil game. They refuse to panic & buy other companies at the top of the market but will when the market flops and they can get a deal. Last year they bought out a natural gas producer XTO Energy giving them a huge presence in that field. They seem to think natural gas is the next great energy field and I'm not gonna argue against them. Conoco-Phillips announced recently they were going to split their refining business off from their exploration/production company. The recent downturn in oil prices means you can buy the stock at $66 which is $10 less than when they announced the spin off and get 2 companies when the spin off happens. Plus a 4% dividend. Marathon Oil recently did the very same thing and the stock price went up 35% prior to the spin off.
Oil services are also a good area to bet on the the petroleum industry. National Oilwell Varco is in my opinion the best in the industry as they design and sell oil rigs plus the equipment on them. Something like 90% of the oil rigs in the world have some equipment from NOV on them. Both Brazilian oil giant Petrobras and BP have big new discoveries and will need to order billions of dollars of equipment to drill them. A lot of that equipment will come from NOV. Consider that the stock price fell from over 83 to 60 between 7/21 & 8/10 (it came back big to almost 67 now) and that based on their order backlog, there is no reason they won't hit $100 and you can see why I like it. If you like something cheaper, Weatherford International (WFT) has fallen from the mid 20s to 17 recently. They aren't as good as NOV but based on their expected earnings for next year, they should get back to the mid to upper 20s. If you really like to take risks then take a look at Dryships (DRYS). Dryships is a shipping company, mostly a bulk shipper (iron ore, grains, fertilizer, etc) but has since branched out in 2 areas. They've got some new tankers with more on the way, and they have a 78% ownership in a company called Ocean Rig which builds deepwater drill ships. While the bulk shipping segment has been getting killed over the past 3 years, deepwater drilling has been going great guns. That has been keeping the company profitable. But the company has a lot of debt and the CEO has no qualms about playing a bit fast and loose with the company funds, especially in dealing with companies of his relatives. So this is a highly speculative pick. The company is doing a partial spin off of the Ocean Rig shares in September or October and while you won't get a big piece (approximately 7.4 shares for every 1000 of DRYS owned) you will get a portion. At $2.72 per share, you are taking some risk but you do get a fair amount of upside I think.
I also think leading gold miner Goldcorp (GG) is a good buy at just under $50 per share though I would buy in slowly. Gold prices may sag a bit more over the next few weeks and that might let you get GG at $45 or less. I think mid tier miner Yamana (AUY) is undervalued as it is increasing production at just the right time. Both produce gold at the lowest cost in the business which gives them a lot of leeway should gold really tumble. In the crash in 2008 gold fell to $700 an ounce. These companies both produce at under $450 an ounce so even in a crash these 2 remain profitable. Even though I sold half of my position in AUY at $15, I still like the stock. But when you buy in at $4 and $7 a share, you gotta take some money off the table when it more than doubles. If it falls back under 12 I'll probably buy more shares then. I also sold off half my shares of Aurico Gold (AUQ) at $13 that I had bought at $7.50. Again, I love their model, they are really increasing production at just the right time and I expect them to break $20 at some point in the not too distant future but taking profits off the table means I can sit on this stock and wait out any downturns in gold prices secure in the knowledge that I've made back almost all my money on it already.
I stated in an earlier email that I like South American companies a lot, especially Brazilian and Chilean companies. Both countries have worked pretty hard to keep their inflation in check by raising interest rates. It's hurt their economies a bit but they are in far better shape and further along the economic cycle than the developed economies in the US and Europe. Brazilian airline Gol Linhas Aereas (GOL) has been beaten down pretty bad and announced a not so good quarter recently but its a good company in a good market and when growth starts picking up again in Brazil, it will fly high. I like their competitor, TAM SA (TAM), even more. They got beaten down at the same time GOL did and thanks to an untimely downgrade by an analyst at my own company got crushed late last week and earlier this week when the market went down big. Lost about 30% in 3 days. But unlike GOL, they came out with a pretty good quarter and came back pretty strong on Thursday and Friday. They are down about 10% from where they were. They are set to merge with Lan Airlines (LFL) of Chile pending approval of the Chilean authorities and based on the rate of the merger and the price difference between the airlines, you can pick up a quick 10-15% gain assuming prices don't fall much from here. As the economy in both countries improves, I'm hoping to see an even better gain as I bought TAM a while ago. I mentioned Brazilian oil giant Petrobra (PBR) had discovered massive new oil fields off the coast and would be developing them. I am not a fan of investing in PBR. They are a good company with a possibly great future but they are a partially state owned company and the government takes a large chunk of money from them every year. I'm not saying you can't make money with them, you can, but I think there are better ways to invest in oil in Brazil and I'll take the guys who supply PBR over PBR itself.
Vale SA (VALE) on the other hand is a good play in my opinion. Vale is one of the worlds largest iron ore miners and mines a lot of other metals such as manganese and copper not to mention coal. They also are involved in phosphate and potash mining - read fertilizer - and platinum group metals as well. Finally they recently purchased Bunge Ltd's fertilizer business in Brazil which gives them even more fertilizer exposure and supports another area I like, farming and food production. Their price is down from 33 to 26.55 which is only 10% above their low for the year and they pay a 4% dividend. What's not to like there. I may buy into this stock if we have another big down day.
I wrote a little about sugar producer Cosan (CZZ) once before and everything I have read recently seems to back up my belief that this is a stock worth getting into. They reported so-so results last quarter but recently the price of sugar has headed up to new highs and with the sugar harvest in Brazil - the worlds largest sugar exporter - predicted to be 2 to 2.5 million tons less than original predictions, the price CZZ can charge for sugar exports ought to rise substantially. The Brazilian government is also calling for more sugar to be put into ethanol producton. Because they are the only sugar exporter from the Southern Hemisphere, they are the only sugar exporter during the summer up here. Which means no one else will be able to take advantage of any price spikes until October or so. CZZ recently fell from almost 13 to their yearly low at 9.50 and is only at 10.62 now with a dividend over 2.6%. Needless to say this is on my watchlist as well. It might be on my buy list Monday.
I am not big on bank stocks by and large at this time. Not because there aren't some good banks out there, hell I own shares in my own company who has the 101st largest bank in the US and I've owned Banco Santander (STD is their stock symbol - who the hell decided that would be a good stock symbol to use on the NYSE???) for a while, but because so many big stocks are doing so poorly, all bank stocks are getting tarred with the same brush. Unless your bank is reporting spectacular numbers, and the banks that are doing well aren't taking the kind of risks necessary to get spectacular numbers, your bank is getting knocked down everytime Bank of America or Citigroup has a bad report. STD is a Spanish bank with a big presence in Brazil. Every time bad news about Spanish debt comes out, STD gets knocked down. A lot of bad news has come out of Spain lately. Still they pay a good dividend and I'm willing to wait for banks to turn around here. But if you want to play a bank without the bad European connections, you might want to look at Itau Unibanco (ITUB)
God this post is going on forever. For those of you still awake (when I start talking stocks the PQ's eyes seem to glaze over so I don't blame you if yours do too.) I want to talk about one more thing. Foodstuffs are still going up, with the short harvest of sugar and the possible short harvest of corn along with the low stockpiles of both right now, farmers are raking it in. I mentioned picking stocks of the support companies in the petroleum sector. Well that also applies here and in mining as well. So I look at fertilizer producers such as Mozaic (MOS), Potash Corp (POT), Agrium (AGU), equipment manufacturers such as Deere (DE) for farm equipment, Caterpillar (CAT) for heavy equipment, Joy Global (JOYG) for mining equipment and Cummins (CMI) who supplies engines for a lot of these companies along with many others. None of them are cheap but compared to their expected earnings they all should do well. Or wait for dips and see if you can really get a bargain
Well enough boredom for all of you. I wish I were posting about killing it on the poker tables but I'm a bit on the poor side right now. There was another thing I wanted to post about but that will be for another time. Besides this post took me 3 days on and off to write up so that's probably enough to throw out there. I hope everyone has had a good weekend. All this must have wore me out, I'm taking a bit of a nap now. Stay lucky you nuts.
Thursday, June 24, 2010
AT&T is the bane of my existence
Now just from the title of my post one might think I am another I phone user whose call keeps getting dropped. Nothing could be further from the truth. I don't have an I phone. Hell, I don't even use AT&T for my cell carrier.
No, what AT&T does to piss me off happened in the past, some of it very long in the past. What do the companies NCR, Teradata, Alcatel-Lucent, Qwest, Comcast, and Verizon have in common? All came either wholly or partly from a spin off of AT&T. Back in 1984, AT&T was forced to divest itself of it's local phone subsidiaries causing it to spin off 7 Baby Bells like Southwestern Bell, Bell South, Bell Atlantic, etc. Later on they spun off Lucent, NCR, and their ownership stake in Comcast as they only owned part of Comcast. In an ironic twist, number of the Baby Bells have merged back into AT&T in one form or another since 2005. In fact one of the Baby Bells, SBC Communications, (originally Southwestern Bell) actually bought out AT&T but kept the AT&T name for the company. So a portion of AT&T that was spun off from the main company, bought out the main company about 20 years later.
No, what AT&T does to piss me off happened in the past, some of it very long in the past. What do the companies NCR, Teradata, Alcatel-Lucent, Qwest, Comcast, and Verizon have in common? All came either wholly or partly from a spin off of AT&T. Back in 1984, AT&T was forced to divest itself of it's local phone subsidiaries causing it to spin off 7 Baby Bells like Southwestern Bell, Bell South, Bell Atlantic, etc. Later on they spun off Lucent, NCR, and their ownership stake in Comcast as they only owned part of Comcast. In an ironic twist, number of the Baby Bells have merged back into AT&T in one form or another since 2005. In fact one of the Baby Bells, SBC Communications, (originally Southwestern Bell) actually bought out AT&T but kept the AT&T name for the company. So a portion of AT&T that was spun off from the main company, bought out the main company about 20 years later.
What this means for me is about once or twice a month someone sends in paperwork from a client who has held AT&T forever and still holds shares of AT&T but has no idea of the original cost of the shares. And I have to figure out which shares of AT&T came from the original company or came from shares that spun off from AT&T and merged back into the main company. Tomorrow that is what I'll be spending a lot of time on. Don't get me wrong, I like this kind of research, it appeals to my meticulous side and I'm pretty good at it and have a lot of experience in dealing with AT&T and all of the corporate actions surrounding it. But it is a major pain to take a pile of paperwork and turn it into a legible and accurate cost basis for the client. But enough of boring you all to tears.
On a side note, I want to let you know I start my total with a 3 now. I was running really bad for so long I thought I might never get my balance up in my poker account. I was down to $40 or so in my account before I finally started putting some cashes together. Had a nice score to get me over $150 and have since been slowly building my pot up until I broke 3 last night. Whew, it was a tough go but I'm fairly satisfied and have played decently lately. Hopefully I get it over 4 and 5 and not down to 2 or 1 or worse. Anyway, it's about time for bed. As the wife always tells the kids before they leave the house, Make Good Choices.
On a side note, I want to let you know I start my total with a 3 now. I was running really bad for so long I thought I might never get my balance up in my poker account. I was down to $40 or so in my account before I finally started putting some cashes together. Had a nice score to get me over $150 and have since been slowly building my pot up until I broke 3 last night. Whew, it was a tough go but I'm fairly satisfied and have played decently lately. Hopefully I get it over 4 and 5 and not down to 2 or 1 or worse. Anyway, it's about time for bed. As the wife always tells the kids before they leave the house, Make Good Choices.
Saturday, June 19, 2010
It's a ho hum kind of week
Not much going on in the world for me this week. I worked a lot and played some poker online but nothing much else going on. Online poker has been going much better than lately thankfully and my balance has grown a bit. It was pretty far down for awhile and now I feel a bit more comfortable.
I was happy to see the stock market have some good days this week. I had been looking to sell some stocks in my IRA to raise some cash as I had just about everything invested at this time. Plus I had over 20% of my value in one stock called Cal Maine Foods and I wanted to even out my portfolio a bit. I normally carry 8-10 stocks and don't like to have more than 15% or so in any one stock in case my picks aren't as good as I thought they were. Now the reason I had so much of my stake in CALM was because my investment had done so well for me since I bought it over 2 years ago. Plus they usually pay a good dividend. They have a different dividend policy than most companies in the US. Instead of trying to maintain a set dividend every quarter, they pay 1/3 of their quarterly profit as a dividend every quarter. A bad quarter = no dividend but a very good quarter = a nice fat dividend which I reinvest in more stock.
Wow Australia just got HOSED in this World Cup game against Ghana. Up 1-0 and they just got a guy tossed from the game for a handball. It was a handball at the goal mouth that saved a goal so Ghana was getting a penalty kick but the dude didn't reach out for the ball, in fact he tried to get it on his chest but it was a little to his right and struck his arm and instead. Very harsh to red card the guy (ejection) and force his team to play 10 vs 11 for 65 minutes. Almost as bad as how the USA got hosed yesterday by the Phantom Penalty. Give the guy a yellow card (2 yellows = 1 red) if you must but a red card there is HORRIBLE. And the Socceroos had done so well to get a 1-0 lead early.
Back to the stock market. I have been half and half lately. About half my money in good dividend paying stocks that pay me to wait for the economy to decide if it's going to get better or not. The rest in some more higher growth picks that could make me some great returns but don't pay me much of a dividend. And I made a couple of speculative plays in biotech and solar type stocks that could pay very well. Or I could lose much of my investment (solar not doing well right now) but it's not a big total of my investment dollars. Anyway, if we have another downturn in the market, I now have the cash to pick up some real deals on a couple of stocks I think. I was really regretting not selling some stuff earlier in March or April when my stocks were doing well so I figured not to make the same mistake this time.
In other news, today we are celebrating my daughter's graduation with a party for a number of her friends. I gotta make some food here soon so I better finish this up. I was hoping to go practice some more gunnery today but I don't think I will have time. I'll just play a little online poker, watch a little World Cup and read some of my favorite blogs from Massachusetts like..........Very Josie and Marooned (stuckinMassachusetts). They make me laugh all weekend. Stay lucky you nuts.
Update - Australia ties with Ghana 1-1. Good second half. All credit to the Socceroos for playing 2/3 of the game with 10 on 11. Almost scored twice in the second half and dominated portions of the half. Good saves by both goalies to keep the game even.
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