I am retired and take educated guesses on all things financial.

December 29, 2008

December 30, 2008: From Russia With Love, Igor Panarin, an ETF Portfolio

Predictably, a deep recession is time for the socialists, far left and other similar inspired zealots to gloat about the demise of capitalism in general and the United States in particular.

Recently, one such intellectual, from the country that brought you Ivan the Terrible, ten years of a Ukraine forced famine, the Gulag of thirty million deaths, endless five year plans, Stalin and his short-lived association with Hitler, a gazillion piano player/ice skaters/gymnasts, earned doctorates in Karl Marks "science"(sic), huge military parades, shortages of every commodity except propaganda - poorly constructed- and an oligarchy second to none in corruption, has received prominence from State-controlled Russian Federation broadcast networks and certain conferences of common intellectuals outside the dirty and pollution-filled confines of the old Soviet Union: Professor Igor Panarin.

Mr. KGB-trained Panarin, with a degree from a Soviet University that is roughly equivalent to an on-line degree mill here in the States, speaks with finesse and a sense of purpose that could only come from someone on the best of terms with a Soviet.

Russian's are fond of lenghty prose and lecture. To the untrained mind, size matters. Substance is quite another hurdle to conquer. Professor Panarin uses this ethnic intellectual shortcoming to predict the demise of the United States. After a civil war, which will take place in 2010, the United States implodes. Mass immigration, economic decline and moral degradation will bring about the collapse of the dollar and initiate the conflict. Afterwards, Panarin predicts that the country will be divided into four regions: The Texas Republic (under Mexican influence), Atlantic America (perhaps joining the European Union), The Central North-American Republic (under Canadian influence) and the California Republic (under Chinese influence). Russia will exert influence over Alaska and Hawaii will revert to China or Japanese influence.

Taking the learned Professor's crafted map, I submit the following ETF portfolio to profit from the breakup of the United States of America:

EWW: IShares MSCI Investable Mexico Index Fund: A buy. Adding the southern US will finally give Mexico what it needs most, an educated and motivated labor force with the spirit to compete without oppressive taxation, unionization and drug cartel death squads.

FXI: IShares MSCI Xinhua China 25 Index Fund: Short China. Desert, deficits, environmental roadblocks at every turn and a declining work ethic. Go long if China sells California to Mexico - then short Mexico.

EWC: IShares MSCI Canada Index Fund: The big winner. Loads of land, natural resources and industry. Double up if somehow they can persuade Illinois, Indiana,and Michigan to join Atlantic America.

IFEU: IShares FTSE European Index Fund: Short everything in the Eurozone. Inheriting the mess of the liberal northeast and the New Yorkers will turn the Euro into the 1920s Deutsch Mark. If the European Union offers to grant the Carolinas, Kentucky, West Virginia and Tennessee tax favored status because their culture is not as sophisticated as European, you may add a bit of the ETF to your portfolio.

TMREX: Third Millenium Russia Fund: Buy it. The only things Russia can produce effectively without shoddy workmanship are natural resources, assuming they continue to avoid any notion of environmental compliance. Alaska is ripe for exploitation since the former United States left fuel and mineral resources untapped and the land full of polar bear and moose - excellent for the Russian fur and shoe industries.

EWJ:IShares MSCI Japan. Hold. They already own Hawaii.

It is comforting that a KGB brainchild such as Igor Panarin is out and about showcasing Russia's best and brightest minds for all to see.

If this is the best the Russkies can muster, we have absolutely nothing to worry about from their perpetual third world status,the poor quality of life Russia's masses have grown to accept as normal and conspiracy tendencies so amazingly apparent to everyone except individuals such as the learned Professor Panarin.


December 22, 2008

December 22,2008: Depression, Anyone?

Not that I suscribe to the next Great Depression surge that the media and some economists seem to actually wish for as another way to savage President Bush and his capitalist henchmen, the following quotes provide interesting historical perspective on how the last Great Depression was seen - or unseen:

September, 1929:
"There is no cause to worry. The high tide of prosperity will continue" - Andrew Mellon, Secretary of the Treasury.

October 14, 1929:
"Secretary Lamont and officials of the Commerce Department today denied rumors that a severe depression in business and industrial activity was impending" - New York Times.

January 13, 1930:
"Reports to the Department of Commerce indicate that business is in a satisfactory condition, Secretary Lamont said today." - New York Times

January 24, 1930:
"Trade recovery now complete, President told. Business survey conference reports industry has progressed by own power. No stimulants needed! Progress in all lines by the early spring forecast." -New York Herald Tribune

March 8, 1930:
"President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days." - Washington dispatch

March 24, 1930:
"The prompt return of huge speculation and the liberal manner in which earnings are again being discounted indicate that it will be difficult to quench the fires of stock market enthusiasm for long." - Barrons Magazine

May 1, 1930:
"While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States - that is, prosperity." - President Herbert Hoover

June 29, 1930:
The worst is over, without a doubt." - James Davis, Secretary of Labor

August 29, 1930:
"American labor may now look to the future with confidence." -James Davis, Secretary of Labor

September 12, 1930:
"We have hit bottom and are on the upswing." - Lames Davis, Secretary of Labor

October 16, 1930:
Looking to the future I see in the further acceleration of science continuous jobs for our workers. Science will cure unemployment." - Charles M. Schwab

October 20, 1930:
"President Hoover today designated Robert Lamont, Secretary of Commerce. as chairman of the President's special committee on unemployment." -Washington dispatch

October 21, 1930:
"President Hoover has summoned Colonel Arthur Woods to help place 2,500,000 persons back to work this winter." - Washington dispatch

November 30, 1930:
"I see no reason why 1931 should not be an extremely good year". - Alfred Sloan, General Motors Co.

January 20, 1931:
"The country is not in good condition." - Calvin Coolidge

June 9, 1931:
"The depression has ended." - Dr. Julius Klein, Assistant Secretary of Commerce

Then again, how many elite economists have predicted 16 of the last 3 recessions?
Even Warren Buffett has had it wrong. At his Shareholder Meeting in April of 2000, he said that "Current market conditions are as extreme as anything that has ever happened - probably including 1929." A bubble is not a depression.

Live long and prosper.

December 18, 2008

December 17, 2008: MDU Resources, Barack's Kind Of Company

I have had MDU Resources as a holding in my Permanent Portfolio for a few years. The enterprise can't be pigeonholed as a basic materials company (which has been a prime factor, imo, of its stock price slump). Rather, MDU is a well-managed collection of puzzle parts that should thrive during President Obama's retooling of America scheme, especially within the power and infrastructure areas.

MDU Resources has been expanding its portfolio of useful companies for over eighty years. It started as a utility company serving customers in Montana, where it is headquartered, and the Dakotas. Today, MDU Resources is a member of the S&P MidCap 400 Index. The company operates in three core lines of business: energy, construction materials for infrastructure and utility resources. MDU Resources includes natural gas and oil production, natural gas pipelines and energy services, construction materials and contracting services, and electric and natural gas utilities. Quietly, MDU has operations in almost all fifty states, primarily centered in the upper North Central region. Ever mindful of being politically correct, MDU has issued a slick Resource Sustainability Report that should warm the heart of the most ardent environmentalist.

Keeping with the "green" theme, MDU announced yesterday that they are going to put a large tract of land in North Dakota to use as a prototype wind farm, which will initially produce 19.5 megawatts of energy.

MDU has consistently been overlooked and poorly recognized by the street for the company it has gradually evolved into: an essential player in several key sectors of our economic foundation.

The stock trades at $21.36/share, sporting a 2.90% dividend that is well-supported. MDU has had a 52-week trading range of $15.50-35.34. With a market cap of almost $4b and a modest PE of 9.8, MDU appears to be an attractive choice for investors needing a play on the forthcoming administration's economic emphasis. There is an pronounced upside to this stock for the foreseeable future.

December 08, 2008

December 9, 2008: Infrastructure Ideas For ObamaLand, Part 2

Continued from yesterday's article, I submit a few more infrastructure plays for consideration as per President-elect Obama's pledge to enhance, first and foremost, the infrastructure of our country.

MTX - Minerals Technologies, Inc. This company adds value to products that utilize minerals in a variety of areas applicable to the infrastructure theme. Trading at $47.09 with a .46% yield. 52-week trading range of $38.-74.00.
APOG - Apogee Enterprises, Inc. This company is a great way to play the glass and frame components of infrastructure. It specializes in the "outer skin" of structures using glass as well as numerous other glass-type applications. Trading at $9.02 with a 3.61% yield. 52-week trading range of $5.00-26.00.
VBI - Valmont Industries. This company is a dominant producer of concrete and metal poles and towers. It is not only a basic infrastructure play, but a "green" play as well for wind, solar and other alternative energy systems and distribution networks (power grids). VBI also produces irrigation equipment. Trading at $57.93 with a .90% yield. 52-week range of $37.-121.00.
BOOM - Dynamic Materials. This company is a major provider of welded plates used in construction of all sorts."BOOM" welds some of its plates using an explosive-driven patch, thus the ticker symbol name. Trading at $15.05 with a .94% yield. 52-week trading range of $10.-65.00

One ETF fits the infrastructure plan. PowerShares' Water Resource Portfolio, PHO.
Approximately 90% invested in U.S. water resource securities, this is one sector fund that has it right regarding the Obama plan. Other ETF's that appear to fit the infrastructure theme (basic materials, construction, etc.) just don't have the correct portfolio mix for my taste.

A note of caution. Most of my picks originally penned on December 8th have advanced mightily, some over 20%, in one trading day. This list and yesterday's post should not be purchased into this wave of strength. Wait until a pullback occurs. If President-elect Obama commented on a Tuesday that we should eat more lamb, I am confident that on Wednesday slaughterhouse and wool sweater securities and their derivitives would rise dramatically in price.

December 07, 2008

December 8, 2008: Infrastructure Stocks To Profit From The President-Elect, Part 1.

As we await the next deluge of freshly printed loot from the Treasury to debt our way out of the recession, a bit of pre-emptive research may assist you to find stocks which may profit from the Obama infrastructure plan. My initial investigation into this realm led me towards some interesting securities. Perhaps a few may be appropriate for your speculative portfolio. Here they are:

MCEM - Monarch Cement Company. The Portland Cement-brand company has excellent cement products for infrastructure projects. Trading at $25.75 and yielding 3.57%. 52-week range between $20-30.00.
TXI - Texas Industries is a heavy construction play. Excels in three areas,cement, aggregates and consumer products all tied to infrastructure. Trading at $30.48 and yielding 1.0%. 52-week range between $19-80.00.
USLM - United States Lime and Mineral Company. A lime and limestone company that plays a role in the construction, steel, municipal sanitation, water treatment, paper, roof shingle and agriculture. Trading at $21.67 with nil yield. 52-week range between $19.-46.00.
MLM - Martin Marietta Materials. A major producer of aggregates for the infrastructure industry. Trading at $90.90 and yielding 1.76%. 52-week range $58.-143.00.
VMC - Vulcan Materials. One of my favorites. Another major producer of aggregates for infrastructure with a major political plus of having large operations in the Chicago,Illinois area. Trading at $66.75 and yielding 2.94%. 52-week range $39.-101.00.
KBR - KBR, Inc. This company is well-positioned in government and civilian infrastructure services. Formerly a division of Halliburton. Trading at $12.94 and yielding 1.55%. 52-week range $9.00-45.00.
URS - URS Corp. A Pelosi-posted San Francisco provider of construction, engineering and technical services for infrastructure around the world. Trading at $36.41 with a nil yield. 52-week range $19.-57.00.
JEC - Jacobs Engineering. Specialist in providing direct-hire construction services,modular construction activities, value-added infrastructure services, etc. Trading at $42.43 with nil yield. 52-week range $26.-104.00.
FWLT - Foster Wheeler. Superb global construction company and a specialist in infrastructure development. Trading at $21.52 with nil yield.52-week range $13-86.00.
GVA - Granite Construction. Heavy civil construction contractors.Focuses on infrastructure projects nationwide. Trading at $45.83 with a 1.13% yield. 52-week range $21.-48.00.

Part 2 will be filed tomorrow.

December 01, 2008

December 1, 2008: What Could Be Worse?

As investors on the long side of securities lick their wounds today, I thought a personal observation may be in order.

Things rarely happen as we expect. Whether it be business, investments, career or personal relationships a Force almost always interferes to enhance or gum up the works.

The most intense emotions do not occur with investments. They happen within personal relationships. Probably the worst, excepting death, is having to say goodbye to someone whom you hold dear. I think many of us have had that happen one or more times in our lives, and the gut-wrenching feeling of having a relationship dissolve or mutate due to the reality of life circumstances is an emotional event for all concerned. Feelings can overtake the reality of the situation to the detriment of otherwise wonderful people. Contrary to just selling investments that have to be jettisoned out of a portfolio, every attempt should be made to understand that in spite of having to say goodbye, that does not mean caring, concern and the willingness to help in an emergency are sold down the river. They just take another form. Importantly, there needs to be a tacit comprehension that a relationship that endures requires acceptance by all involved to look towards the future, not the past, and through a different prism.

Although investments come and go, relationships endure so long as there is acceptance that life's parameters be acknowledged - and that good things generally will bless good people.

I will be sporadic with blogs for a few days due to travel and hospital tests for an arthritic condition.