Recent Comments:
Goldman Sachs looking for $150 oil soon {BloggingStocks}
Jun 9th 2008 3:35PM $150 oil isn't that far from where we are now but some consumers and businesses will feel an impact of the move greater than the price rise-- when you have only so much money for energy and it keeps going up there is a point at which it starts to have a real impact on your living standard and the ability of some businesses to survive or thrive.
Arjun Murti, the analyst at Goldman Sachs who made the call on oil going to $150-$200 noted in Barron's that part of the supply problem is that producers are getting plenty of cash for their oil so they have no incentive to go to great lengths to produce more. (Ironically, that suggests to me that we might have been able to avoid the predicament we are in now if policymakers had had the foresight to raise the gas tax- as Barrelomoney has been recommending-- to curb demand and lower the price. Had that happened, lower prices might have encouraged producers to find ways to bring out more oil and consumers would be paying less at the pump while more of what they paid could have been going to pay off the deficit-- it sounds backward by Econ 101 standards but if Murti is right high prices are discouraging production in this situation!).
In any case, a synopsis of a good profile of Arjun Murti is available free in the Spotlight section at http://www.Barrelomoney.com. Also, you could add Mexico to the list of oil producers who are set to do worse than expected- an item on Mexico's vanishing oil profits is in the Oil Alerts section (left side, light blue label) at http://www.Barrelomoney.com.
U.S. weekly jobless claims fall to 357k, better than expected {BloggingStocks}
Jun 5th 2008 11:53AM It's interesting that on your list of the top 5 states for rising jobless claims is Iowa. Iowa actually has a big job surplus- perhaps one of the country's largest. It just shows how these statistics are sometimes deceptive unless taken in conjunction with a lot of other information. In any case the news is pretty good in the sense that these are not recession numbers and they suggest we may have a soft landing rather than a true recession-- though many risks on the downside remain.
Bernanke talk boosts dollar, slams commodities {BloggingStocks}
Jun 4th 2008 3:31PM Stabilizing oil prices are good even for oil companies here so it is good to see that-- oil was just moving too fast. I wouldn't favor raising interest rates right now though and I don't think we will see that because housing is in very bad shape. Also the economy faces less stimulus as the election will be over in November and the media and travel spending going into the economy for that won't be there. China's Olympics will also be over which could slow things down over there though there will be rebuilding from the earthquake. Japan is teetering on the brink of recession and European economies are also slowing as Europe has not cut rates. State and local governments will be pressured in spending plans because of less property tax collections from housing and from sales taxes and even car taxes as people hang on to cars longer. It would seem the risks are greater on the downside.
Pornography not so recession-proof after all? {BloggingStocks}
Jun 3rd 2008 7:32PM Christie Hefner, CEO of Playboy recently said the competition on the Internet shouldn't be a big problem since they have always had competition (see recent interview synopsis in the Playboy Channel- left side white label- at http://www.Barrelomoney.com). However, as you write, the numbers tell a story here that these companies are meeting some of the same kids of problems as newspaper and other print media. Playboy does have a unique position though and as CEO Hefner argues the company's licensing division and their Palms club partnership are doing great-- suggesting all is not lost and there are further avenues of growth. At this point Playboy is pretty cheap given their long term potential and the Macau venture coming up but in this environment it is understandable that investors will want to wait for some more encouraging indications that their problems can be handled. It's worth watching. They are always coming up with new ways to generate cash. At some point the stock will get too cheap or the opportunity will just be too attractive.
Chasing Value: 8 stocks for 2008 -- May beats all {BloggingStocks}
Jun 2nd 2008 4:17PM Sheldon-- It might be worth noting that Loews is splitting up this week breaking out the tobacco company.
Cramer on BloggingStocks: Things aren't so bad {BloggingStocks}
Jun 2nd 2008 12:11PM There's a lot of money around- trillions on the sidelines in addition to new money that should be doing something. The question may be whether the money will go into stocks or commodities.
You are probably right that things aren't as bad as they seem for consumers but since you posted both oil and commodities are taking off. We may soon see if the $130 level remains a stumbling point for oil.
Time Warner scores at the box office with 'Sex' pic {BloggingStocks}
Jun 2nd 2008 11:13AM Except for Disney's Narnia it has been a pretty good summer for movies- suggesting that the consumer will be there for the movie industry even as the economy slows. This weekend on Cavuto one of the panelists, Lea, had an interesting play on Sex in the City which she predicted would be a hit (see Weekend Stock Review- white label by red dot on right- at http://www.Barrelomoney.com). She suggested buying Nordstrom as a way to play the impact of the film on fashion. I like some of the movie theater companies here as a way to play it-- like Regal Cinemas which has a fat dividend and is getting into 3D in a big way-- just because we don't really see retail and apparel being able to hold up as much as movies if things get bad. Of course, the companies like Marvel are also interesting and Disney did turn in good recent earnings so it still might be good longer term and there is still hope for the economic stimulus package.
South Koreans say no to U.S. beef {BloggingStocks}
Jun 1st 2008 10:49AM One hopes eventually free trade with South Korea and Columbia will make it through Congress. Protectionist sentiment is a two-edged sword that is very dangerous in a world that increasingly needs free trade. Where would the US consumer be without free trade in the auto industry that has resulted in better and more fuel efficient and more long-lasting cars than we had in the past.
Cambridge Energy's Yergin: What is now unfolding is an oil shock {BloggingStocks}
May 30th 2008 7:40AM This oil shock has been different than those of the 1970s and certainly has driven oil up much more than the others did. Partly, people have recognized the rising prices of course but it has taken a long time for people to see this as a serious shock as we have not had supply shortages, long lines at gas stations or political changes such as lowering the speed limit to 55. There have been only very limited calls for conservation- usually in self-help styled articles rather than political editorials. It has also taken a very long time for demand to start dropping in the US-- people are all excited about the recent drops of around 5-6% in demand in the US and it is a lot but not that much in light of the huge move up in oil prices. Most people think the recent demand drops are great but there is some question as to how long lasting they will be since people are still buying and paying up big for new SUVs (see latest item in Speaking of Autos section at http://www.Barrelomoney.com) even as the are having trouble getting rid of used SUVs. When the economy comes back to strong growth, much of the oil demand will pick up again. In the 1970s it seemed the gas guzzlers were all becoming dinosaurs pretty fast and there was more collective will to cut demand as part of a solution.
Cramer on BloggingStocks: The ultimate burden of proof: profit {BloggingStocks}
May 28th 2008 11:07AM Just a couple of points:
1. I find it interesting that Warren Buffett hasn't been in any of the areas that you list off as the hot sectors- he bought into PetroChina (a little after I did) when no one wanted oil and it wasn't a hot sector-- He did buy Conoco Phillips when oil was hot (also after I bought in there btw) but that would be the only exception I can think of. Warren Buffett recently noted that he does not take a sector approach to investing (see interviews in Billionaire Watch section- yellow label, top at http://www.Barrelomoney.com). Peter Lynch had great success with a sector approach but the sector approach can be more dangerous than individual stock picking unless you are very timely and get in early.
2. There are quite a few areas that have done well beyond those you mention-- the rails, coal, solar power, gold for a time and many health care stocks depending on what time period you look at.
3. Selling is a more difficult decision than buying for many investors- I would certainly agree. Everyone has had great stocks that have made the old round trip and most investors have had the experience of selling a good stock only to watch it move ever higher.
