Bob Brinker Free Discussion Site 59,820+

Top 484. Aug 12, 2005 7:27 PM

» JeffChristy - Re: Re: If a tree falls in the woods...

In response to Re: If a tree falls in the woods... posted by Kirk:

Kirk

Good discussion question...

Here is another one for you. The cost of gasoline is just one part of consumer energy spending. I doubt you are spending any money to heat your house right now. But people who are shocked by the current price of gasoline are in for another shock starting this fall when they get their heating bills. Natural gas prices are also going through the roof. Brinker will probably be talking about this in November when someone calls in complaining about their heating bill.

As I stated previously, I started over weighting the energy sector in January 2004. Based on today's close, my portfolio is up 14.7% YTD. One area that I have liked in the past was Canadian natural gas trusts. I own PWI and PGH. They are paying out dividends that are in the mid teens based on what I paid for them in 2004. I currently have about 50% appreciation on PWI. They were a good area to go into for yield last year. This year I have bought two oil tanker companies FRO and GMR. They pay out most of their earnings in dividends.

-- posted by JeffChristy

Top 485. Aug 13, 2005 8:29 AM

» bbaddict - Re: Re: Re: Re: Housing bubble and economy

In response to Re: Re: Re: Housing bubble and economy posted by permabear:

I know this is not the forum for politics, and I shouldn't have brought it up. And will not again.

[ Kirk's Editor Comment: Good. Hopefully you saved the rest of your text to repost in the proper forum as I deleted it here. Anyone that is interested in debating politics is more than welcome to follow you over there to discuss your comments.

It takes a good deal of work to move posts so people like you who have been warned cost me lots of time. Politics can quickly ruin a useful discussion board so I discourage it here.

EVERYONE has an opinion about politics so Brinker is not unique in having opinions about politics. I don't give a plugged nickle what Brinker's politics are... I just hope his commentary sticks to investing so he can help us make money or understand the process of making money. Lets stick to topics of investing here. ]

-- posted by bbaddict

Top 486. Aug 13, 2005 8:56 AM

» bbaddict - Re: Re: Re: If a tree falls in the woods...

In response to Re: Re: If a tree falls in the woods... posted by JeffChristy:

I just heard Stuart Varney on the tube saying:

"Diesel prices are over $3 per gallon, and the truckers are having to pay it. That is inflationary and will slow the economy."

Which brings me back to my point... If the price goes up, but the economy slows, is it "inflationary"?

Regarding the deleted post...Is it fair to say that the economy of the 90's was built on a bubble, and unsustainable?

-- posted by bbaddict

Top 487. Aug 13, 2005 1:21 PM

» Happy_2 - Oil Price

Bob Brinker keeps saying oil prices are no problem because they spiked much higher 15 years ago. What Bob doesn't realize is that the peak price 15 years ago was a very, very temporary event. As I recall within a few weeks, prices had tumbled back to something more normal. This time the price of $67 a barrel was achieved gradually over a long time and shows no sign of falling much. Even if oil falls back to $50 the effect on the economy will be more than a brief spike that happened 15 years ago.

-- posted by Happy_2

Top 488. Aug 13, 2005 2:40 PM

» Normxxx - Re: Oil Price

In response to Oil Price posted by Happy_2:

Of course, today's adage is that we are using oil "more efficiently," i.e., fewer barrels per person (now there's a stat to be reckoned with— 'BPP'). Somehow, though, I can't seem to take much comfort in that.

-- posted by Normxxx

Top 489. Aug 13, 2005 5:06 PM

» JeffChristy - Re: Re: Re: Re: If a tree falls in the woods...

In response to Re: Re: Re: If a tree falls in the woods... posted by Kirk:

Kirk

You ask if I have an exit strategy. I felt we were in about the 4th or 5th inning of this energy shortage yesterday, From what I have heard today it may be the 3rd or 4th inning. As Brinker said today oil has to go to $90 to equal the peak back in 1991 adjusted for inflation. I did some selling based on PE but reallocated that money back into other energy related stocks with lower PE's. Today someone ask Brinker about investing in energy funds and he said he wouldn't do it now. As long as demand keeps increasing and I don't see supply out pacing that gowth, I don't see a need to sell unless market cap looks way to high.

My next move will be to research small electric utilities next week. Jim Rogers (Mr. Bowtie) mentioned on Cavuto's show that the law restricting holding companies was just repealed and he thinks most of the small eclectic utilities will be bought out. This seems fairly low risk if I limit my buying to one that look solid and are paying decent dividends. A guy also ask Brinker about fannie mae. The caller was worried that they might have further accounting problems. Bob said he didn't own it so he didn't have an opinion. I wondered if that was true. I wouldn't be surprised if several of the mutual funds he recommends hold that stock. FNM is jim Rogers favorite short position. He expects the stock to go much lower.

I am also interested in ethanol but can't find a pure play. A caller ask Brinker about adding more of it to gasoline. This is something I was thinking about last month. It could be a quick fix when this shortage becomes a crisis. I discussed it with a friend who sells ethanol. He told me that the current cost is less than $1.50 a gallon. He thought we could go from 90 10 to 85 15. He said there was already one station locally that was 85 15. ADM appears to be the biggest producer. If you know of any others let me know.

-- posted by JeffChristy

Top 490. Aug 14, 2005 4:57 PM

» Moe_Berg - Re: Oil Price

In response to Oil Price posted by Happy_2:

Your observation is spot on target, Happy.

I thought Bob did an excellent job explaining the difficult situation we face today - ie. demand driven rising oil price in an environment where existing producing and refining capacity is almost fully utilized with no expectation of slowing demand growth. Looks like he did his homework knowing he had oil industry analyst Charlie Maxwell as his guest expert on the program thiis weekend.

I thought Bob's observation that today's politicians are not fully facing the seriousness of the above situation was also spot on target. But Liberal Bob, true to his McGovernesque leanings, failed to mention that President Bush's proposed Comprehensive Energy Bill has been deliberately blocked in a partisan Congress for 5 years until it finally was passed during this past month and signed into law. It took a caller to point out that the cheap oil prices of the 1980's and 90's (with the exception to the quick spike around Gulf War I) drove the lack of interest in energy conservation and solutions during that period. Instead Showman Bob railed about the spilt milk (lost opportunities) of the past 30 years - something nobody can go back and do something about. Granted Reagen, Bush1, and Clinton could have exercised leadership on this issue and failed to do so. And Carter proposed 3 Energy Programs that a partisan congress shot down. But we can't do anything about that now - it's past and it's history.

And then Comedian Bob jokingly added that he does his part to save energy by driving his golf cart every time his schedule permits - HA HA HA. I doubt if Bob will be invited to headline any stage shows in Vagas any time soon based on that failed pun.

Frankly, if I were the President, I'd call in the heads of all American Car Companies and crack their heads together until they agreed to announce a crash program (ie. WW2 Manhattan Program) to mass produce Hydrogen Fuel Cell propelled cars and Hybrid Cars by a specific deadline no matter what the cost to the public. Whatever the extra cost of the changed paradigm, it would be worth it to cut off the funds we pay for gas that go to fund terrorism that Al Qaeda gets from the Saudi's as bribes not to topple the 'Royal' Family!

-- posted by Moe_Berg

Top 491. Aug 17, 2005 8:27 AM

» bbaddict - Re: Re: Oil Price

In response to Re: Oil Price posted by Kirk:

Kirk, is there an easy way to get that chart adjusted for inflation? Can you set it in constant 1991 dollars, or just today's dollars?

Bob keeps telling us that oil is still cheaper than it was in 1991, adjusted for inflation. That is true, but somewhat of a distortion. That was a spike caused by fears of the first Iraqi war. He should also compare it to 1992, 1993, etc.

True...oil, adjusted for inflation, is not so high compared to 1991, 1992, etc. But to compare the short-lived spike of 1991 with the tremendously strong trending curve of today is a bit misleading.

I have been shopping for a small sports coupe this last year. I looked at Lexus, Infiniti, Mercedes, etc. They are very nice cars, but they only get about 20MPG! 20MPG from a 2 seat sports car is obscene! People give me grief over my SUV, which gets 15MPG, but they drive these tiny sports cars that are not much better.

I have decided to get a Honda Civic, which gets 35-40MPG. Maybe I will be a trendsetter. Who needs electric pedals adjustment anyway?

There are only a few ways out of this:

1) Conservation (duh)
2) Alternative energy (lots of companies working on this, but the technologuy is not cost-effective yet)
3) Build more refineries and drill more oil (not in my backyard, or off my beautiful beach)

-- posted by bbaddict

Top 492. Aug 17, 2005 8:53 AM

» bbaddict - Re: Re: Oil Price

In response to Re: Oil Price posted by Kirk:

I just bought a bottle of water for $1. That works out to $7.57 per gallon. Street vendors sell water for $3 per bottle. That's over $20 per gallon.

That's just WATER pumped out of the ground, run thru filters, and bottled. Some of it just comes out of the municipal supply and filtered.

Compare that to oil...exploration, drilling dead wells, getting permits, buying land, paying high-cost labor, pumping, transporting via truck, pipeline, ship, train to a refinery, refining (very complex, dangerous, and regulated), additives added, storing in tanks, transporting to depot, put on tanker truck, driven to your gas station, pumped into tanks, pumped via expensive gas pumps, profit paid to gas station owner, 30% tax paid to government.

$3 per gallon for gas that will take me and my family 100 miles is cheap! (It's really $2 per gallon plus tax)

This is why conservation doesn't work. Oil is too cheap to worry about. That's also why alternative energy doesn't yet work. The cost of oil undercuts the alternatives.

They used to say that oil would need to be above $35 per barrel to make tar sands viable. Well, even adjusted for inflation I'd guess we are above that threshold, as tar sands are now being processed. But solar, wind, bio, etc. are still far more expensive than petroleum.

I would like to say that oil needs to rise in price even further, but that just sends more of our dollars overseas.

So while rising oil prices take a bite out of our spending, they should be expected and planned for. The rise in prices will drive conservation, alternative energy, and more exploration. And a less-gluttonous return of the more fuel-efficient car.

-- posted by bbaddict