The SP500 Index MACD technical indicator gave a SELL signal this past week.
Sunday, 30 December 2012
Saturday, 29 December 2012
Saturday 29December 2012 - Investment Income Ideas!
Alberta Oil and Gas production companies for the past few years have been an under performing sector to have invested in. And there are a couple of reasons why:
1) Natural gas wholesale prices have declined from $12+ to the $2-4 range per unit.
2) Alberta crude oil (convential and tar sands) is moving at $50 - 65/barrel which is well below WTI at recent $85+/barrel. Why? The promised pipelines are not anywhere near approval let alone constuction to move the ever increasing Alberta oil sands production to refineries in Texas.
3) Questions for Another Day? Why does Canada (Alberta) not also build refineries to process oil into gasoline, diesel fuel, and byproducts for the chemical industries and export/sell them at world market prices?? Alberta should be the Texas of Canada. ??
This disconnect has provided some huge divergences between Alberta oil and gas producers and the major stock market indexes that are near multi year recovery highs in a 20 year secular bear market.
I will discuss one stock to illustrate the point. I have owned this stock in years past when it was an income trust and am now considering repositioning into it.
Disclaimer: This is NOT a recommendation to buy this stock. Consult with your own investment advisor and/or do your own due diligence.
Enerplus Corp (TSX-ERF) Also trades on the NYSE.
Market Cap: $2.5Billion.
Current Share Price: $12.50 Current Dividend: $1.08/Yr Current Yield (COC): 8.6%
Production: 2013 Estimated 84+ thousand barrels oil equivalent per day
This company has been very hardhit by first being overweight in natural gas production and recent low Alberta prices for wellhead oil. Enerplus is NOT in the oil sands production space so has the flexibility to gradually reposition its production base. The company continues to sell non producing assets and reposition and consolidate growing positions in the Bakken Field areas of North Dakota including the Fort Berkhold fields in North Dakota (now 14% of company production) and the Sleeping Giant Fields in Montana. Current production is now 50/50 oil/gas production.
As one can see from the included 9 year price chart Enerplus has seen a huge drop in share price from $65 to the current $12 range. As well in Auguest 2012 Enerplus cut its dividend by 50% from $2.16/Year to $1.08/Year. Also on the negative side the estimated 2013 payout ratio is 130%.
This stock and others like it are a buy for investors who can accept the risk. IE: If the current business plan does NOT develop as planned and the company cuts its dividend another 50% to .54/Year and the stock could drop to $6.
Click on chart to enlarge.
Click on chart to enlarge.
Alberta Oil and Gas production companies for the past few years have been an under performing sector to have invested in. And there are a couple of reasons why:
1) Natural gas wholesale prices have declined from $12+ to the $2-4 range per unit.
2) Alberta crude oil (convential and tar sands) is moving at $50 - 65/barrel which is well below WTI at recent $85+/barrel. Why? The promised pipelines are not anywhere near approval let alone constuction to move the ever increasing Alberta oil sands production to refineries in Texas.
3) Questions for Another Day? Why does Canada (Alberta) not also build refineries to process oil into gasoline, diesel fuel, and byproducts for the chemical industries and export/sell them at world market prices?? Alberta should be the Texas of Canada. ??
This disconnect has provided some huge divergences between Alberta oil and gas producers and the major stock market indexes that are near multi year recovery highs in a 20 year secular bear market.
I will discuss one stock to illustrate the point. I have owned this stock in years past when it was an income trust and am now considering repositioning into it.
Disclaimer: This is NOT a recommendation to buy this stock. Consult with your own investment advisor and/or do your own due diligence.
Enerplus Corp (TSX-ERF) Also trades on the NYSE.
Market Cap: $2.5Billion.
Current Share Price: $12.50 Current Dividend: $1.08/Yr Current Yield (COC): 8.6%
Production: 2013 Estimated 84+ thousand barrels oil equivalent per day
This company has been very hardhit by first being overweight in natural gas production and recent low Alberta prices for wellhead oil. Enerplus is NOT in the oil sands production space so has the flexibility to gradually reposition its production base. The company continues to sell non producing assets and reposition and consolidate growing positions in the Bakken Field areas of North Dakota including the Fort Berkhold fields in North Dakota (now 14% of company production) and the Sleeping Giant Fields in Montana. Current production is now 50/50 oil/gas production.
As one can see from the included 9 year price chart Enerplus has seen a huge drop in share price from $65 to the current $12 range. As well in Auguest 2012 Enerplus cut its dividend by 50% from $2.16/Year to $1.08/Year. Also on the negative side the estimated 2013 payout ratio is 130%.
This stock and others like it are a buy for investors who can accept the risk. IE: If the current business plan does NOT develop as planned and the company cuts its dividend another 50% to .54/Year and the stock could drop to $6.
Click on chart to enlarge.
Click on chart to enlarge.
Thursday, 27 December 2012
Thursday 27December2012 - Chart of the Day!
From zerohedge.com
In Late 2006, the S&P 500 futures market traded around 1435 and the commitment of traders was at an extreme net long position. The market fell shortly after only to manage a miraculous rise in the face of hedge funds going bust and an exploding and over-leveraged credit market. In mid-2008, the S&P 500 futures also traded around these levels, from where the epic collapse really began. Six years later, the S&P 500 futures traders are the most bullishly positioned they have been since those heady over-confident days. Still believe the talking heads that there is money on the sidelines waiting to be put to work? Still convinced that there will be some epic rally if the 'fiscal cliff' fallacy is resolved? Positioning (real money) trumps Sentiment (AAII surveys etc.) every day in our book. The Bernank will be pleased at his success.
From zerohedge.com
In Late 2006, the S&P 500 futures market traded around 1435 and the commitment of traders was at an extreme net long position. The market fell shortly after only to manage a miraculous rise in the face of hedge funds going bust and an exploding and over-leveraged credit market. In mid-2008, the S&P 500 futures also traded around these levels, from where the epic collapse really began. Six years later, the S&P 500 futures traders are the most bullishly positioned they have been since those heady over-confident days. Still believe the talking heads that there is money on the sidelines waiting to be put to work? Still convinced that there will be some epic rally if the 'fiscal cliff' fallacy is resolved? Positioning (real money) trumps Sentiment (AAII surveys etc.) every day in our book. The Bernank will be pleased at his success.
Tuesday, 25 December 2012
Tusday - 25December2012 - Merry Christmas!
Wishing You and Family a Merry Christmas and a Happy, Healthy and Prosperous 2013.
Wishing You and Family a Merry Christmas and a Happy, Healthy and Prosperous 2013.
The Piano Guys perform ‘We Three Kings’ at the outdoor Citi Pond Ice Rink
at Bryant Park in midtown Manhattan, New York City.
Use direct web link here; play button in photo is not active. In HD so
plays well at full screen.
Friday, 21 December 2012
Saturday, 15 December 2012
Saturday 15Dec2012 - What's The Fix?
The United States has very serious financial problems with a federal budget ($3.8 Trillion) totally out of balance with spending exceeding revenue ($2.47 Trillion) by 1.3 trillion dollars.
Here are the numbers.
How would you balance the budget with a combination of revenue increases and budget cuts.
2012 Budget Spending:
The United States has very serious financial problems with a federal budget ($3.8 Trillion) totally out of balance with spending exceeding revenue ($2.47 Trillion) by 1.3 trillion dollars.
Here are the numbers.
How would you balance the budget with a combination of revenue increases and budget cuts.
2012 Budget Spending:
Friday, 14 December 2012
Friday 14Dec2012 - Just the Facts!
From Casey Research Daily Dispatch.
In the months leading up to the US presidential election, the unemployment rate fell below the 8% mark - rather conveniently, some obstinate anti-Obama observers observed. Turns out they may have been right. Here's another snippet, from CNSNews.com, also forwarded by David Franklin earlier this week...
From Casey Research Daily Dispatch.
In the months leading up to the US presidential election, the unemployment rate fell below the 8% mark - rather conveniently, some obstinate anti-Obama observers observed. Turns out they may have been right. Here's another snippet, from CNSNews.com, also forwarded by David Franklin earlier this week...
73% of New Jobs Created in Last 5 Months
Are in Government
In June, a total of 142,415,000 people were employed in the US, according to the BLS, including 19,938,000 who were employed by federal, state and local governments. By November, according to data BLS released today, the total number of people employed had climbed to 143,262,000, an overall increase of 847,000 in the six months since June.
In June, a total of 142,415,000 people were employed in the US, according to the BLS, including 19,938,000 who were employed by federal, state and local governments. By November, according to data BLS released today, the total number of people employed had climbed to 143,262,000, an overall increase of 847,000 in the six months since June.
In the same five-month period since June, the
number of people employed by government increased by 621,000 to 20,559,000.
These 621,000 new government jobs created in the last five months equal 73.3
percent of the 847,000 new jobs created overall.
Read the full article here.
Friday, 7 December 2012
Friday 07December2012 - Changing Perceptions!
From Jack Crooks at Blackswan Capital.
The euro tanks on "downgrade"
What did we know and when did we know it? Why such a big surprise to market players the European Central Bank (ECB) would downgrade its assessment of the Eurozone economy? And why is it a surprise the ECB may cut interest rates accordingly the next time around? Funny thing sentiment; isn’t it.
No doubt sentiment for the Eurozone has been high in light of sharp decline in bond yields throughout zone. But falling bond yields do little in the near-term to help generate real growth, which is what the Eurozone is struggling to achieve.
Now, can the euro finally do what it is destined to do, i.e.
fall sharply against the US dollar on declining growth and yield differentials? I sure think so and it is why Black Swan members are short euro as a core long-term trade. As much as I hate to use this word—inflexion point, maybe we are there now and the euro can fall much lower even without the key driver being the risk of breakup.
From Jack Crooks at Blackswan Capital.
The euro tanks on "downgrade"
What did we know and when did we know it? Why such a big surprise to market players the European Central Bank (ECB) would downgrade its assessment of the Eurozone economy? And why is it a surprise the ECB may cut interest rates accordingly the next time around? Funny thing sentiment; isn’t it.
No doubt sentiment for the Eurozone has been high in light of sharp decline in bond yields throughout zone. But falling bond yields do little in the near-term to help generate real growth, which is what the Eurozone is struggling to achieve.
Now, can the euro finally do what it is destined to do, i.e.
fall sharply against the US dollar on declining growth and yield differentials? I sure think so and it is why Black Swan members are short euro as a core long-term trade. As much as I hate to use this word—inflexion point, maybe we are there now and the euro can fall much lower even without the key driver being the risk of breakup.
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