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Hoodlum

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Posts posted by Hoodlum

    A Natural Gas Disconnect

    in General Discussion

    Posted

    Has anyone looked into the 'wet' gas argument for the price drop and supply increase.  It doesn't look like this will improve any time soon.

     

    http://www.theglobeandmail.com/globe-investor/a-natural-gas-disconnect-bargain-bin-prices-surge-in-supplies/article2368417/

     

    The most important factor is the chase for so-called “wet” gas, which has dominated industry activity for the last few years. It’s natural gas that surges to surface accompanied by liquid hydrocarbons like propane, butane and ethane. Those liquids radically shift the dynamics.

     

    In oil terms, natural gas currently trades for under $14 a barrel. Propane, meanwhile, sells for around $50 a barrel; butane is roughly $90. At prices like that, natural gas becomes nearly an afterthought. In some wells, companies could make money even giving away the gas, which in those wet wells is called “associated gas.” In others, it takes a very low gas price to make it work.

     

    David Hobbs, chief energy strategist at IHS Cera, has calculated that over the next decade, “we can see up to 14-odd BCF [billion cubic feet] a day of associated gas that would still be economic to produce at $1.”

     

    With the U.S. currently producing 72 BCF a day, that’s a large percentage.

     

    BAC cheering thread

    in General Discussion

    Posted

    I started raising cash by selling DELL and MERC that I thought were are fair value with FY reports coming soon.  I don't know enough about AIG to make the jump yet, but I may consider increasing by CRM Put position if it keeps rising.

    While Other Investors Flee, One Group Is Buying

    in General Discussion

    Posted

    Here is another interesting case for buybacks.

     

    Gates’ Selling Seen Sparking $2 Bil MSFT Buying Spree By Index Funds

     

    Since the S&P 500 is a float-weighted index — it only uses shares freely trading in public hands — Gates’s holdings lower Microsoft’s place in the index.

     

    Once insiders control less than 10% of a company’s shares, S&P adjusts the S&P 500 to count every share. If that happens for Microsoft, index mutual funds and ETFs will need to buy additional Microsoft shares, says Rawson. S&P currently covers about 89% of MSFT’s 8.4 billion shares when calculating its index.

     

    “If all of a sudden we count all 8.4 billion when we do the adjustment next year it’s going to mean a 14% increase in its weighting,” Howard Silverblatt, senior index analyst for S&P, told Jones. Index investors would have to acquire an additional 1% of all Microsoft shares to match its weighting in the index.

     

    Gates’s current rate of stock sales could reduce insider holdings below 10% early next year. S&P recalibrates its index annually in September.

     

     

    Japanese Stocks - Where to Start?

    in General Discussion

    Posted

    It'll be interesting to see if this forces improved corporate governance in Japan.

     

    http://www.reuters.com/article/2011/10/18/olympus-board-idUSL3E7LI2G120111018

     

    The lack of independent directors supervising management is one of the key factors behind Japan's No. 36 ranking out of 39 countries on corporate governance in the latest survey by research firm GMI .

     

    Other propagators of poor governance include cross-shareholdings with business partners and a tendency for executives to hang on wielding influence in advisory posts even after they've retired from the board.

     

    The Olympus case may give the impression that governance is moving backwards, despite a series of steps aimed at improving the situation in recent years, including the Tokyo Stock Exchange's requirement from this year that all companies have at least one independent director or auditor.

     

    "This is a negative step for corporate governance in Japan," said Jamie Allen, secretary general of the Asian Corporate Governance Association based in Hong Kong.

     

    "There had been some hope that Japanese companies would take on not just outside directors but outside managers and that corporate cultures in Japan would be more open and international."

     

     

    Japanese Stocks - Where to Start?

    in General Discussion

    Posted

    Here is a copy of the letter from then President and CEO, Michael Woodford to Chairman, Tsuyoshi Kikukawa on Oct 11th.  Woodford suggested meeting on the 14th to discuss next steps.  That was the day he was sacked.

     

    http://graphics8.nytimes.com/packages/pdf/business/20111018/letter-text.pdf

     

    "In putting the company first, the honourable way forward would be for you and Mori-san to face the consequences of what has taken place, which is a shameful saga by any stretch of the imagination. It is clear that the current situation is now untenable and to move forward positively the necessary course of action is for you both to tender your resignations from the Board. This approach would allow the situation to be managed in a discreet manner and minimise the reputational damage to both Olympus and yourselves. If your resignations are not forthcoming, then there is a principal obligation upon me in respecting my fiduciary duties, to raise, with the appropriate parties, my fundamental concerns in relation to the governance of the company."

    Japanese Stocks - Where to Start?

    in General Discussion

    Posted

    Has anyone been following the Olympus story over the past couple of days.  Stock is down 40% since the President and CEO was asked to leave.  He has sent Financial and Audit documents to UK's SFO for further investigation.

     

    http://www.ft.com/intl/cms/s/2/87cbfc42-f612-11e0-bcc2-00144feab49a.html#axzz1bA6mlmiV

     

    In a statement announcing his dismissal, Olympus said Mr Woodford had diverged “from the rest of the management team” and this was ”causing problems for decision making”.

     

    The dismissal represented an abrupt reversal. When promoting Mr Woodford to chief executive two weeks ago, Tsuyoshi Kikukawa, chairman, said he was “extremely pleased” with the Briton’s leadership, which had “exceeded my expectations”.

     

    Mr Woodford stressed that he had seen no evidence that Olympus executives benefited improperly from the acquisitions. But he said large amounts of money seemed to have “disappeared” into the hands of poorly vetted outside financial advisers and investment vehicles.

     

    In a letter to Mr Kikukawa dated October 11, he described “a catalogue of calamitous errors and exceptionally poor judgment which … has resulted in the destruction of shareholder value of $1.3bn.”

     

    In the Gyrus case, the documents show that Olympus paid $687m to a Cayman Islands-registered company, AXAM, that had been named as a financial adviser but whose ultimate owners were never ascertained by Olympus. The company disappeared from the trade register three months after receiving its final payment from Olympus, Mr Woodford said. The amount paid represented about a third of the $2.2bn acquisition price.

     

    http://www.bloomberg.com/news/2011-10-18/olympus-says-fees-paid-over-gyrus-purchase-were-appropriate-.html

     

    Olympus Corp. (7733) said acquisition fees paid to unidentified advisers amounting to 30 billion yen ($391 million) were not excessive and followed “appropriate” accounting procedures.

     

    “Investors expected that management would deny everything but in fact the chairman started to admit things,” Yuuki Sakurai, president at Fukoku Capital Management Inc., said in a phone interview. “Only the numbers are different. They admitted the payment even though several years ago they didn’t disclose it. It makes you wonder if there’s more out there.”

    MSFT

    in General Discussion

    Posted

    500k Android phones are being activated every single day. How many Windows phones are being activated?

     

    Either way Microsoft will make tons of profit from this.

    MSFT

    in General Discussion

    Posted

    I must have missed this.

     

    What if patent fees for Android cost as much as licensing Windows Phone?

    http://www.guardian.co.uk/technology/2011/jul/07/windows-phone-android-patent-seeking

     

    If Microsoft can get that money from Samsung (though it's more likely that this is an opening salvo; Samsung is said to want to get it down to $10, which isn't much of a negotiating position) then Android is going to become the best earner Microsoft has in mobile.

     

    Given that Samsung produced 19m smartphones in the first quarter, that would be $190m even at the $10 level; $285m at the $15 level.

     

    There's also a lawsuit going on against Motorola, in which it's claiming that its Android handsets infringe, and with Barnes & Noble over its Nook e-reader (which uses Android).

     

    And that's before Nokia - with which Microsoft has tied up a deal worth billions involving lots of intellectual property flowing back and forth - wades in with its patents against Android, because Nokia has got lots of patents in the mobile phone market. Microsoft would be able to litigate those for it quite successfully.

     

    Even then Microsoft isn't really finished with the patent licensing thing, because you'll recall that it was part of the consortium last week which won the bid for the Nortel patents, which all relate to mobile. Those, it will be able to litigate once the transfer of ownership is complete (Canada seems to be cutting up a little rough about it).

     

    And once that happens, then Android handset makers may really begin to wonder whether the game is worth the candle. If Windows Phone licence from Microsoft costs you around $25 (a guess), but the patent payments are costing you $24 per handset, is it really worth persisting?

     

    TRE - Sino-forest put.

    in General Discussion

    Posted

    TRE will be volatile for a while so take advantage of it.  I sold half what I bought when it was above $7 and just bought back the same shares again.  Still a very small amount of my holdings.

     

    Most of TRE's Debt is due after 2013 so there is lots of time to clear the air on this.  Here are some comments on the Carson Block Conference call.

     

    http://www.canadianbusiness.com/blog/business_briefings/29215--skepticism-mounts-against-sino-forest-short-seller

     

    TRE - Sino-forest put.

    in General Discussion

    Posted

    I know next to nothing about this company and skimmed the report so I can't comment on whether it's a fraud or not or whether the CFO adequately refuted MW claims.  What I can say is MW has been right every time they have initiated on a china stock and their report was very damning.  Of course, I'm telling you nothing the market doesn't already think.    

     

    The market is not perfect.  The MW report had 2 main claims against TRE and that is what the press release from TRE tried to refute.  Most of the rest of the MW report tried to pull stuff from the past to show some kind of trend to back up their 2 main points.  The first item was clearly refuted as the revenue in question was clearly disclosed in the 2010 Q1 & Q2 MD&A.  I am surprised MW missed this.  The 2nd claim comes down to land ownership.  MW claims they don't own the land while TRE says they do and that MW assummed they only purchased in Gengma, when they puchased in 25 other counties of Yunnam province.  The auditors will likely come back and say nothing is wrong, but MW will say "where's the proof of the land records" and try to drag this out as they know TRE won't release that information for confidentiality reasons.  

     

    In the end, if Paulson doesn't see anything wrong then he will buy shares at these depressed prices and there are only so many shares that can be shorted.  I think MW has bitten off more than they can chew and are not accurate in their reporting of TRE, regardless of how successful they may have been in the past.  I picked up some share of TRE today for the first time.

     

    America, the world's sweatshop

    in General Discussion

    Posted

    I am sure there are varying opinions on this.  But do you think this is the direction certain parts of the US are headed in.  And will we eventually see social unrest.

     

    http://www.thestar.com/business/article/994354--olive-america-the-world-s-sweatshop

     

    U.S. and a few Canadian manufacturers have long been relocating in the low-wage U.S. South. They’ve now been joined by European multinationals, most of which also operate in Canada. The Euros leave behind the social-justice practices of their homelands, as keen to squeeze blood from a stone as the most avaricious business operator.

     

    A stunning Human Rights Watch report from last September describes systematic exploitation of U.S. workers by such familiar European names as Ikea, Sodexo, BMW, Siemens, Daimler and Volkswagen.

     

    But China is no longer the “off-shoring” jurisdiction of choice. With annual wage gains now averaging 15 per cent to 20 per cent, combined with stagnant wages in North America, China will lose its labour-cost advantage over North America in just four years time, according to a report this month by the Boston Consulting Group.

     

     

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