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November 2007

Recs

10

Call Telmex to Collect Big Returns

November 30, 2007 – Comments (1) | RELATED TICKERS: TMX.DL2

Here's my latest write-up.  Enjoy and let me know what you think.    [more]

Recs

12

Bearish on Ethanol Producers

November 15, 2007 – Comments (3) | RELATED TICKERS: VSE

Ethanol producer VeraSun’s EPS fell to 9 cents per share vs. 40 cents in the same quarter a year ago in its most recent quarter.  The cost of corn is up and the price of ethanol is going down. Ethanol production in the U.S. is increasing so rapidly supply is exceeding demand. In 2005, President Bush signed the Energy Policy Act of 2005 which required the use of 7.5 billion gallons of renewable fuel (mostly ethanol) by 2012. This policy created a rush to build ethanol plants. There are currently 131 ethanol plants operating in the U.S. with another 73 plants and 10 plant expansions under construction. When all this capacity is completed the U.S. will have the capacity to produce 13.5 billion gallons of ethanol annually. This amount of ethanol is almost twice what the government is currently requiring gasoline blenders to buy. Too much production equals low ethanol prices equals zero operating margins for the ethanol industry. The solution for the ethanol industry is to go to Washington and get their friends in Congress and the Bush Administration to raise the RFS so the gasoline blenders are required to buy more ethanol which they didn’t want to buy in the first place. The Senate this past summer passed an energy bill which raised the RFS in annual increments to 36 billion gallons by 2022. The House has yet to take action on the proposal. The moral here is if you have a product that no one wants to buy, get your friends in Congress to require someone buy it. That’s what makes America great.  Unless there is some sort of miraculous technological innovation that makes ethanol production much, much more efficient eventually everyone will realize that ethanol is a joke.  Until then, the industry has a great deal of oversupply that will prevent producers from making money,  [more]

Recs

5

Mattel: a surprising play on global growth that may be primed for a turnaround

November 14, 2007 – Comments (1) | RELATED TICKERS: MAT

Company: Mattel (MAT)  [more]

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8

Government Regulaion, Not Interest Rates is the Cause of Inflation

November 13, 2007 – Comments (1)

I have been thinking about inflation this morning and I had to get this off of my chest.  So here's my first Op-Ed blog piece.    [more]

Recs

8

PMI / Altria: Poised to Smoke the Market

November 03, 2007 – Comments (1) | RELATED TICKERS: MO

For my first blog post ever, I would like to share an investment case that I've been working on for Philip Morris International and Altria with everyone.  Enjoy and let me know what you think.   [more]

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