Venezuela announced Tuesday that they are offering four new natural gas blocks today for exploration and production. The offer was made to private companies.

State oil company Petroleos de Venezuela S.A. stated that 36 companies were being invited, including Chevron, ExxonMobil, India's Oil and Natural Gas Corp., and China's Sinochem.

We've all noticed the extreme dissatisfaction the market has had with earnings releases over the past few months, mainly because of analyst expectations. I'm not saying analysts are expecting too much, but I do believe that the market has been over-reacting a great amount on expectations, guidance, and current results.

It has gotten to the point where, if a company doesn't meet all analyst goals and guidance, its stock gets knocked down 15%. I'm not complaining about this -- who doesn't mind getting a great company at a discount value? I certainly don't. But it is worth understanding why it is happening now, and why it wasn't 50, or even 15 years ago.

I am currently running a project - The "Pencils Fund" - which tracks all of my latest investments. It is a real money portfolio, and it is a fun way to get feedback on my investments, and track them over the long-term. My aim with the "fund" is basically like Warren Buffett's: Buy great companies with management that you love and believe in, at a very attractive price. Every investment that the Pencils Fund makes I aim on holding for many years, because I act as though I own the entire company. It really changes the way I look at investing, it takes away the pressure of seeing my investments fluctuate over the short-term. I think many of us can agree that it is the long-term results that matter, not the short-term timing of a volatile market.

So, with that said, the Pencils Fund just today purchased Starbucks. The reason for this follows.

A quote from an article about fresh water and its supply got me interested in GE's projects with water purification:

When viewed from space the Earth is a magnificent blue planet which seems to have a limitless supply of water and in fact 70% of the surface is covered by water. The problem is that most of this is salt water, located mainly in oceans and seas. Only 3% of the water is fresh water, safe for drinking. However, most of this is unavailable for use with 3/4 of all freshwater being part of the frozen ice caps and glaciers. What remains is 1% and of this a full 2/5 are tied up in America's Great Lakes and Russia's Lake Baikal.

After the market closed today, Starbucks released its 3Q earnings and investors obviously aren't happy, sending the stock down 12% to $29.38 in pre-market trading as of 8:30 a.m..

Starbucks opened 559 stores in the quarter, 395 in the USA. The results were above estimates. So why is the market unhappy with the release? (See our Live Blog of the earnings call).

Starbucks EPS during the quarter was $0.18 (compared to $0.16 in the same period a year ago), and Wall Street was expecting $0.17 per share. (It should be noted that the one cent gain was actually because of a tax benefit, so without that Starbucks nailed estimates.) Several analysts believe it to be because of July's same-store sales, which were up 4%, but down 7% year-over-year.

Time Warner reported earnings today, earning a profit of $1 billion compared to a loss of $439 million in the same quarter a year ago. More high speed Internet and digital phone customers helped grow the cable TV business, which offset the declines at AOL. Revenue rose 1% to $10.7 billion from $10.6. Time Warner also included the news that it has completed more than half of its 2005-proposed $20 billion share buyback, paying approximately $11.7 Billion.

I think that here we see decent earnings that were above analyst estimates, which is really worth remembering because of all the earnings-related share price hammerings we've seen lately. The cable TV system looks like the one segment that really got Time Warner these earnings, as Time Inc., and AOL both reported 2% declines in revenue, while the cable TV segment saw revenues rise 15% and its profits rise 16%. And the market seems to like the results, because as I write this its share price is up nearly 3%.

Going forward, I think we should expect some continued strong cable TV revenue, as that is a growing market in which Time Warner has a good foothold. If AOL's recent announcement of making all, or most, of its services free actually does help the business, this would be huge for Time Warner.

I just hope that AOL can keep growing over the next 20 years, which you would think would be very difficult to do purely on advertising. Juno announced the same type of thing on December 20, 1999, and as far as I know they aren't doing nearly as well. If AOL can expand and grow only on advertising, I say they should do it. But if it doesn't work out, they will be in even more trouble than they are now.

Also worth mentioning is that Comcast and Time Warner have finished the $17 Billion buy-out of bankrupt cable operator Adelphia Communications.

I recently introduced you to the work of Robert Shiller, a Yale economist who has a technique for evaluating the market that shows that according to past history we will be seeing some disappointing S&P 500 performance. The technique has been accurate 85% of the time. So, if we take past history as an example, we should prepare for some lousier performance than usual.

Well, that depends. Either the price of the S&P 500 will go down, or corporate earnings will go up to balance out the valuation. I see more factors that will lead to a drop in price rather than a rise in earnings.

IPOs can be a very useful way to evaluate the stock market's value. When there is a large volume of IPOs, historically it is a sign that companies are very comfortable with their industry, potential and the stock market.

When I was a beginner with stocks, I really had no idea what an IPO was. When I did figure out what they were, I had no idea where I could research them! But, while reading Jason Zweig's commentary on The Intelligent Investor, he mentioned Jay Ritter's web site as an excellent place to keep up-to-date on the latest IPO happenings.

What is the IPO world like currently? According to this report:

Google has been creating quite a bit of discussion here lately -- and with good reason. Google is a name everyone knows and as a result investors (or traders mainly?) are flocking to the stock. Many believe that Google will be above current price levels in a year and beyond. But, the valuation has to be there and I really don't think that the valuation and growth potential are high enough to keep the price where it is.

Let's do a comparison of Google, Yahoo, and the industry average. Google is large enough to the point that it actually raises the industry average, which is impressive. But it doesn't make a difference with the valuation.

Some of you may already know about economist Robert Shiller, author of Irrational Exuberance. Mr. Shiller has done an incredible amount of research on the stock market, the housing market, and other big issues in the business and finance world. He is pessimistic on today's stock market, read on for further information.

A piece of his work that I really find interesting is a stock market evaluation technique that he came up with. It is quite simple. All you do is take the S&P 500's current share price and divide it by average corporate earnings. If the result is above 20, the market has historically performed poorly in the years after. If the result is below 10, the market has historically performed quite well after that point. At the peak of the tech bubble the result was an astonishing 44, today it is hanging around 17.

This technique keeps you in tune with the support earnings are giving the S&P 500, and to make sure that doesn't slip away. In almost every case of a ratio above 20, it has been during a bull market when people forget about valuation and financials, and go with "the hot thing."

I can't help but notice the amount of talk going on about energy these days, particularly oil. Oil is currently in high demand, with the world consuming approximately 80,727,420 barrels of oil every day, according to NationMaster.

China is rapidly increasing the amount of energy and oil it is consuming and it is clear it will need to make more partnerships and relationships to meet the demand. But this is where I think it will become interesting: Because of China's government and current condition, will it have problems forging new deals? China has increased trade with Nigeria, which should help with the country's current oil position. But it won't be enough. So the question to ask is, "Can China somehow find a way to meet its oil and energy demand?"

Let's take India as an example.