Please don't windfall tax oil companies just "because they can afford it". At some point, somebody should have informed you that the final payer is always has been and always will be a consumer, as any costs are past down, taxes included. There is no one else! So when you, in the heat of your battle, on the national television, giving in to a burning desire to move back into that nice white building on Pennsylvania Avenue bate your constituents by promising to ease their gas burden by taxing big, bad oil companies - what I hear is: vote for meee... and you will pay even more for gas than you're paying now...
You see Madam Senator, a Robinhood philosophy of expropriating from "those that can afford it" just because... has failed! Not only it has failed, it's dying all over the world. If you don't believe me, ask Russians, or Chinese, or Cubans, or any other people that survived havens of communism...
But the strategy and tactics used by Bolsheviks to attract loyalty of the common people are still alive and being practiced by contenders like you with great consistency. And why not? As long as politicians like you will say and promise anything, anything at all to get elected and as long as people remain as gullible as they are these tactics will work!
If you however, are sincere in bringing the fossil fuel costs down permanently consider sponsoring new, competing technologies and allow to search for oil within territorial US, as suggested by the President.
As for the oil companies - they are in business to make money for their shareholders, they operate in the competitive environment and like all other businesses they earn their profits. It is still legal!
Tuesday, April 29, 2008
Wednesday, April 23, 2008
Tankers - A Real Bargain?
Beam me up Scotti! Wouldn't it be nice to beam up a 100 million metric tons of coal, steel, wheat, copper or any other commodity from here to say China, or India, or Brazil? Well, technology is not there yet! The way this stuff is transported from producers to consumers overseas is mainly by huge ocean going vessels, marine tankers and they are busy these days carrying over huge amounts of every commodity to countries where demand is outstripping supply as every day goes by. Only a decade ago Chinese were riding bicycles and wearing grey uniforms, happy to have a bowl of rice once a day. That time is gone forever! The communists have turned capitalists and they drive cars, build skyscrapers, eat better and want to enjoy every convenience that we have taken for granted for all of our lives. The same insatiable growth is propelling economies of Russia and its former satellites, as well as India, Brazil, Mexico and other.
They buy from us and other developed countries all the basic materials required to build a good life. Unfortunately the human kind did not yet developed a better way to deliver billions of tons of commodities across the oceans and tankers are the "only game in town"!
The tanker stocks that enjoyed a parabolic rise in 2006 and 2007 have sold off sharply with the rest of the market last November, but their profits are keep climbing higher and higher. Most of the stocks in that group are selling at single digit trailing and next year PE, while their "E" are growing at a double and triple digit rate. The Baltic Dry Bulk Index (BDI) that tracks daily charter rates for paid by commodities suppliers to ship their goods has climbed from the bottom reading of 5615 on January of this year to 8550 as of today indicating that daily charter rates are rising again fueled by strong demand.
Tankers stocks bounced up in the last couple of weeks from the bottom as well, but they are still cheap! ...and most of them pay very generous dividends, some yielding over 10%.
The trend in shipping business will last as long as the BRIC countries will experience growth, which is for decades. This trend is there to stay and its irreversible! On the hand... there is no other hand, its supply and demand and demand is getting stronger!
For appreciation consider following stocks:
- TBS International LTD. TBSI$43.19 dividend yield 0%
- Aegean Marine Petroleum Network ANW$38.41 dividend yield 0.10%
- Dryships Inc. DRYS$84.54 dividend yield 0.95%
- Oveseas Shipholding Group OSG$75.36 dividend yield 1.66%
- Exel Maritime Carriers Ltd. EXM$43.85 dividend yield 1.83%
- Teekay Corp. TK$46.31 dividend yield 2.37%
- Navious Maritime Holdings Inc., NM$11.54 dividend yield 3.11%
For appreciation and high dividends consider following stocks:
- Double Hull Tankers DHT$11.78 dividend yield 12.64%
- Arlington Tankers Ltd. ATB$22.90 dividend yield 10.13%
- Paragon Shipping Inc. PRGM$17.39 dividend yield 10.06%
- Knightsbridge Tankers VLCCF$ dividend yield 8.51%
- Navious Maritime Partners LP., NMM$16.72 dividend yield 8.44%
- Euroseas Ltd., ESEA$ 15.40 dividend yield 7.01%
There are multitude of stocks in the market that looks like a bargain, but some of them are. The real bargain is when a stock price is low relative to the future growth of the business. If business is fueled by irreversible global forces - that makes it a great investment! Buy tankers, I did!
They buy from us and other developed countries all the basic materials required to build a good life. Unfortunately the human kind did not yet developed a better way to deliver billions of tons of commodities across the oceans and tankers are the "only game in town"!
The tanker stocks that enjoyed a parabolic rise in 2006 and 2007 have sold off sharply with the rest of the market last November, but their profits are keep climbing higher and higher. Most of the stocks in that group are selling at single digit trailing and next year PE, while their "E" are growing at a double and triple digit rate. The Baltic Dry Bulk Index (BDI) that tracks daily charter rates for paid by commodities suppliers to ship their goods has climbed from the bottom reading of 5615 on January of this year to 8550 as of today indicating that daily charter rates are rising again fueled by strong demand.
Tankers stocks bounced up in the last couple of weeks from the bottom as well, but they are still cheap! ...and most of them pay very generous dividends, some yielding over 10%.
The trend in shipping business will last as long as the BRIC countries will experience growth, which is for decades. This trend is there to stay and its irreversible! On the hand... there is no other hand, its supply and demand and demand is getting stronger!
For appreciation consider following stocks:
- TBS International LTD. TBSI$43.19 dividend yield 0%
- Aegean Marine Petroleum Network ANW$38.41 dividend yield 0.10%
- Dryships Inc. DRYS$84.54 dividend yield 0.95%
- Oveseas Shipholding Group OSG$75.36 dividend yield 1.66%
- Exel Maritime Carriers Ltd. EXM$43.85 dividend yield 1.83%
- Teekay Corp. TK$46.31 dividend yield 2.37%
- Navious Maritime Holdings Inc., NM$11.54 dividend yield 3.11%
For appreciation and high dividends consider following stocks:
- Double Hull Tankers DHT$11.78 dividend yield 12.64%
- Arlington Tankers Ltd. ATB$22.90 dividend yield 10.13%
- Paragon Shipping Inc. PRGM$17.39 dividend yield 10.06%
- Knightsbridge Tankers VLCCF$ dividend yield 8.51%
- Navious Maritime Partners LP., NMM$16.72 dividend yield 8.44%
- Euroseas Ltd., ESEA$ 15.40 dividend yield 7.01%
There are multitude of stocks in the market that looks like a bargain, but some of them are. The real bargain is when a stock price is low relative to the future growth of the business. If business is fueled by irreversible global forces - that makes it a great investment! Buy tankers, I did!
Tuesday, April 22, 2008
Builders: A Sure Thing!
It doesn't happen often that the market conditions present a "sure" money maker - home builders now are as sure short as it can ever be!
Here is 7 reasons why:
1. Unsold inventory of homes is rising with no signs of improvement, exacerbated by stricter lending criteria by mortgage lenders and rising foreclosures that competes with new construction for a few available qualified buyers.
2. Weak economy, rising unemployment, spent out consumers squeezed hard by high gas prices, higher down payment requirements and still too high property prices place many potential buyers out of the real estate market.
3. Home sales continue to deteriorate. As reported this morning (4/22/08) by National Association of Realtors home resales fell 2% in February and inventory of unsold homes have risen 1% representing a 9.9 month supply at the pace of sales in March.
4. Many of the builders have loans that will mature and due for refinancing over the next two years and some of them may not be able to "roll" them.
5. On the top of all that home builders are finding them-self between the rock and hard place of inflation. Rising cost of labor and building materials against collapsing revenues spells trouble for profit margins! What profit margins?
6. Despite all of the above Home Builders stocks have risen year to date as much as 60% from the bottom in January making their valuations based on the current and next year estimates astronomically expensive...
7. The insiders are actively selling their stocks at fraction of the value of 2006 and 2007 taking advantage of the bounce from the low। Who knows the state of the business better than insiders? Insiders know that the glut of unsold homes and tighter credit standards are not helping buyers and hurting sellers।
- When high stock price combined with weak and further deteriorating fundamentals - the stock price will follow the fundamentals!
The easiest way to take advantage of this rare situation, is to short US Home Construction iShares "ITB$20.70" or short individual builders such as Ryland Group "RYL$34.00", Pulte Homes "PHM$14.06" and others.
In my long and hard earned experience, real estate cycles NEVER turn quickly. They are always long, they last for decades and this is one of the worst kind.
- I am shorting builders! You place your bets!
Here is 7 reasons why:
1. Unsold inventory of homes is rising with no signs of improvement, exacerbated by stricter lending criteria by mortgage lenders and rising foreclosures that competes with new construction for a few available qualified buyers.
2. Weak economy, rising unemployment, spent out consumers squeezed hard by high gas prices, higher down payment requirements and still too high property prices place many potential buyers out of the real estate market.
3. Home sales continue to deteriorate. As reported this morning (4/22/08) by National Association of Realtors home resales fell 2% in February and inventory of unsold homes have risen 1% representing a 9.9 month supply at the pace of sales in March.
4. Many of the builders have loans that will mature and due for refinancing over the next two years and some of them may not be able to "roll" them.
5. On the top of all that home builders are finding them-self between the rock and hard place of inflation. Rising cost of labor and building materials against collapsing revenues spells trouble for profit margins! What profit margins?
6. Despite all of the above Home Builders stocks have risen year to date as much as 60% from the bottom in January making their valuations based on the current and next year estimates astronomically expensive...
7. The insiders are actively selling their stocks at fraction of the value of 2006 and 2007 taking advantage of the bounce from the low। Who knows the state of the business better than insiders? Insiders know that the glut of unsold homes and tighter credit standards are not helping buyers and hurting sellers।
- When high stock price combined with weak and further deteriorating fundamentals - the stock price will follow the fundamentals!
The easiest way to take advantage of this rare situation, is to short US Home Construction iShares "ITB$20.70" or short individual builders such as Ryland Group "RYL$34.00", Pulte Homes "PHM$14.06" and others.
In my long and hard earned experience, real estate cycles NEVER turn quickly. They are always long, they last for decades and this is one of the worst kind.
- I am shorting builders! You place your bets!
Subscribe to:
Posts (Atom)
