OJO Zafado

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    • Sun Jun 29th 11:03 AM
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      Fifth Third Bank: Drink Deeply of the Poison
      We see the '12 & '13 maturity FITB bonds showing up on the block with the same YTM as WaMu , Morgan Stanley(some debt just downgraded), Capital One and even AIG subsidiaries like International Lease Finance (airliner leasing)& American General Financing. It seems quite unlikely that all the characters in this on going fiasco are going to be survivors. It is then left to figure out which will go the route of Bear Stearns and be rescued at a higher price than they are at now or continue down the road to oblivion wiping out their investors. The C-PrM recently went out at +8% and is now down in price to yield +9%. Here is perhaps the nation's most international bank franchise with their global platform, teetering? The Fed's response? Hold until relieved. The markets late in the week showed their distain for the current economic policies of Bush and his gangsters. We are squarely lodged in a stagflation. The real world of US finance is transforming itself into an Orwellian one. Based on how the FITB bonds are trading the picture for FITB looks bleak. It would seem too early still to get into these banking shares until a few actually go under and we see who the survivors will be. While the Bank of New England went under in 1990 the Bank of Boston traded down into the single digits. If you waited for the Bank of New England to fail before buying Bank of Boston you would have done quite nicely. Every time it is different. This time we may be heading for a more persistent inflationary spiral than we saw in the post Vietnam War era. This time we have destroyed the dollar by fighting a war of mass deception with over a trillion dollars of electronic funds. While saving the taxpayers money on printing costs the profligacy continues by the Fed. 100s of Billions every month in TAFs and TRCAs on top of guaranteeing tottering investment banks. The elected politicians still pandering to the electorate as massive spending deficits loom in the "near years" for Medicare and Social Security. We now have Republicans running for office as "candidate for". You won't know they are Republicans unless you look very closely at their campaign materials. No union label watermark! They are outed! The Democrats are just as bad criticizing the massive budget deficits but promising not to raise taxes to pay for anything either. Nothing will come out of Washington in the next 6 months to stop the insanity of these fools that the American people elected and now so richly deserve. It seems quite clear no action or intervention will take place before the Election to save the value of the US dollar. This means oil, other energy,gold, and agribusiness related will soar even as the Dow makes it's way to 10,000. That should happen by Oct. There was Oct '29 and then there was that Oct 87 thing. When Ben the dollar Slayer came into office as Fed chairman he said in his speech,"The Fed's goal will be to maintain the current expectations for inflation". This past April when oil was at the astounding price of $100/BBL "BTDS" testified for Congress, "We expect inflation to moderate in the coming quarters", "We expect oil prices to moderate due to weaker world markets in those same coming quarters". Ehhh..uhht real shrewd thinker...It will be a lot safer for you if you just buy the SDS or DXD even at these levels of valuation!!!
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    • Sat Jun 28th 10:49 AM
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      High-Yield Canadian Royalty Trusts: What's the Catch?
      Guy
      Warren Buffet thinking is how I ended up buying Acadian Timber the day after the Halloween massacre for less than US $8. There is no magic in yield when an asset class is beaten down. The trusts that participate get beaten down too, to a point. The thing with natural resource trusts is that they still have the resource even in a down market. Look what happened with Grand Cache Coal. Not a trust but some drastically undervalued resources! I do not think the other forestry trusts like CFX and TWF are in much danger of cratering. TWF is a weak one alright but now they are evolving into real estate development. Trees continue to grow larger while harvests are reduced. The assets become more valuable even as the price of the trusts decline. After making it's lows CFX has been standing like Stonewall and his Virginians at +/-$11.50. The dividend has been cut from 16 cents to 12 cents and still there is a 12% return there. Within 18 months of the closing ceremonies in Bejing the 2010 Vancouver Winter Olympic games will kick off . I think there will be enough of a mini boom to support both of those BC based trusts. In the natural resource arena there will always be a demand for ever more computer and toilet paper even if the newsprint business is falling off. The advent of OSB and now wood pellets for home heating means there is an evolution going on in forestry products that should bring "waste by product" down to near zero. The globalization of the world still relys on the lowly wooden shipping pallet as it's foundation. Now we see Atlantic Power falling victim to the utility weakness and high fuel costs. ATP may be a great buying opportunity at this price. As a stapled unit it is particularly advantageous for tax sheltered accounts for US holders. These seem not to be as dangerous for their 10-12% yields as say the recently issued C-PrM, which is just dropping like a rock while yielding over 9%. Your observation on oil prices is correct. Yet there seems little likely hood that oil will collapse. The world's largest economy is just a dead duck with an impending currency crisis. On average more than $50 billion US dollar equivalents are invested from abroad every month in the US. The trade deficits are rising as well as the national debt and current account deficits. When this money drys up or diminishes significantly it will be the intrinsic value natural resource assets that will hold up. If they pay dividends in foreign currencies they will fare even better. There were the tax stimulus rebates, and then the Bear Stearns bailout. Now the US economic policy makers are sitting back in Shock and Awe, as the world markets are correctly perceiving that as far as the US dollar and economy go, the genie is out of the bottle. This has not stopped me from lightening up just a little in BTE! Another Canroy trust "fund" that I find interesting is KYE. In addition to Canroys they own a whole diverse group of MLPs as well as US energy trusts. The +7% dividend is pretty solid. I appreciate your input and opinion on Risk=Reward. Still even in the Halloween massacre very very few lost "everything"... Owning Canroys can have a lot of risks in terms of currency, weather, economic conditions, uncertain tax policy, backwardation and contango, etc. I would not be buying the Swiss Water Decaffeinated Coffee Income Fund any time soon. But an ice maker like the Arctic Glacier Income Fund may be good bet on a long hot summer with the thermostats on those air conditioners getting turned up? If Zimbabwe is the model for the future of South Africa then all things natural resource related in either Canada, Austrailia, Brazil or Russia will be going to higher intrinsic valuations in the medium term.
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    • Sat Jun 28th 01:56 AM
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      Three CEFs Offering Assets on the Cheap
      I strongly disagree with Neil's valuation argument. I have done best in the CEFs that sold at a decent or even compelling discounts. GLQ,WIA, and CEE have all been winners. The IFN is really getting beaten down and seems like a nice play on the BRICs, eventually resuming the lead in growth in the world economy. The other key is as the author alluded to is the amount of leverage these funds typically carry in terms of short term auction rate preferred securities. This has been a disaster for so many of the CEFs. The AOD comes to mind as a fund that does value/dividend investing with out the leverage. The author seems to have found the funds that have limited exposure to the worst performing sectors in the market. The beaten down valuations and discounts to NAV may be because they have sold such investments and moved on. We are left with the beaten down asset now devoid of the usual suspects that may have brought the CEF to these valuation levels. One mans trash sometimes becomes another's treasure. Neil's observation about CEFs converting to ETFs is a good one. If you can't beat 'em join 'em is the philosophy sometimes. Especially if a CEF is in a suddenly "hot" sector converting to an ETF may actually increase management's net fees by virtue of dramatic fund inflows.
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    • Sat Jun 28th 01:23 AM
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      High-Yield Canadian Royalty Trusts: What's the Catch?
      Pilot Gee, Eh?
      Your XTR post is quite interesting. As near as I can tell it pays divs out quarterly rather than monthly. Is that correct? Your observation that it has done quite well as of late is true, looking at a chart. The problem I find is that doing the math with data I am able to conjure up from online resources, the dividend yield now seems to have dropped below 7%. A nice pop in the price seems to have resulted in a lower current payout on the % basis. This ETF trades very thinly on the US Pinks as ISHAF . I had a nice gain in ENY a US sponsered ETF that invested in Canadian oil sands and O&G trusts on some rotational basis tied to the price of crude. It paid no dividend at all but for it's Dec distribution. I have owned the EIT.UN or EVDVF if you will for some time. It seems to me it is basically the same product as XTR, with a fund manager doing the Cherry picking. The yield is significantly higher it appears than that of XTR/ISHAF and is paid monthly. While not steady in price it seems to present buying opportunities below the $5.90 level quite often while swinging occasionally into the +$6.15 range. The yield in this price range has consistently been 12-14%. That's net 12% even for US residents, even those who hold it in a tax sheltered account and lose the Foreign tax credit. As far as cherry picking goes I am up 40% in ATBUF Acadian Timber trust. We did a little better in selling 4 partial positions of FDG Fording Coal into it's recent ramp to the sky. While I own all the trusts mentioned by the author, with the Exception of ERF, I am considering a new position in it as they have now sold the dragging oil sands business. I had previously owned it a couple of times and done reasonably well with it as well. I have recently added to PVX and PGH on dips. One point no one blogging here seems to have touched on is how the 2011 tax change will actually benefit US unit holders of CanRoy Trusts in tax sheltered accounts, under the current tax treaty. There are always the unintended consequences of these things. It could be that there will be a rush by US financial planners to put their tax sheltered clients into these trust units on the very eve of the much gloom and doom advent of the new taxable structures of these Trusts. There will be the tax pools sustaining pay outs and the entire distribution will be relieved of the 15% US with holding.
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    • Thu Jun 26th 07:09 AM
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      Investor Interest Fuels Platinum Group Metals Higher
      I must be uninformed. The symbol prompt that brought me to this blog was DBP. DBP as I understood it was a mix of Gold and Silver futures investments. It does not directly own bullion? To my knowledge the only WIDELY traded US investments in Platinum are the ETNs PTM and PTY. The PTM being a nearly pure platinum participation ETN, while the PTY emulates the DBP while also carrying positions in other precious metals such as the platinum group. Widely traded may be an exaggeration but they do provide a vehicle. The mutual fund UNWPX also has some overweight positions in Platinum mines. Unfortunately most of these investments are in South Africa. Political correctness precludes any seriously critical opinions of investing in So Africa. In the real world no matter what the reason, we see the former Rhodesia/now the beautifully euphonious Zimbabwe achieving the economic "miracle" of Haiti. South Africa is on this same road to economic ruin. Zimbabwe did not go genocidal and become rife with famine over night. We must allow for time to work to get the same results in So Africa. For this reason investments in So African platinum may in the short run be profitable, while in the long term be quite dangerous. Platinum on a fiat currency to size/weight ratio is indeed the easiest of the bullion coins to physically own and store. You pay a premium for that but if you are a long term investor it may be worth it. Unlike most exchange traded investments, bullion coins have the advantage of not showing up on your income taxes or lists of assets for estate planning and long term care provisions under Medicaid. If only Eliot had realized that gold bullion coins "come " in "all sizes" like the +1 oz Austrian or in 1, 1/2, 1/4 and even 1/10 ounce versions. If top world models prefer being paid in Euros, it is "hard" to imagine a courtesan not accepting something like a few American Buffalo.
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    • Mon Jun 23rd 02:43 AM
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      Something is Brewing at Oilsands Quest (Beyond Cramer's Endorsement)
      Oil recovered from oil sands still needs to be blended with regular crude before refining. The US gets 15% of it's nat gas from Canada. I continue to be amazed by bloggers and investors who reason that if a resource is in Canada it is the same as having it in a 51st state. Canada has recently had a 14% increase in it's currency against the US$ by pursuing a much sounder economic policy than the US. Here in the US we assume that tax cutting and massively increasing government spending is some kind of a solution. Next we will have the Democrats who are perceived as Tax and spenders. The Canadians have no powerful Senators from Podunct. They have a fully representative parlimentarian gov't. They have been dramatically increasing taxes on every plane for the last several years, and especially on Energy. They tax then spend. A near crisis was recently averted when it became a very real possibility that there might be a call for elections based on the "Tory" government revealing that the current accounts SURPLUS had shrunk to $C one Billion . Canada is not Venezuela or Russia, but do not think their resources are going to be cheap easy pickin's for the lower 48. As things stand now Canada will be increasing it's domestic consumption of nat gas to it's own economy, while at the same time huge amounts are diverted to Oil Sands projects. This is why Cranmer's prediction of $16 MM~BTU is spot on. It seems the technology for extracting oil from oil sands is continuously improving. Still it is very energy intensive in terms of what goes into the net end product. Currently it seems that less than 60% of the oil in a cubic Meter of oil sand can actually be extracted. The rest remains in the waste residue. The SAGD recovery process while dramaticaly reducing residue seems the most inefficient. BQI has had a great couple of months on the charts. They do indeed lack resources. The whole Canadian oil sands industry is still behind the curve in terms of ameliorating environmental degradation. The whole MacKenzie river basin is at risk environmentally. The charts just don't show that this stock was previously at near $8, 2 years ago before the name changed. So now I will just have to increase my next sell limit order to unload the shares I purchased near $7? After two years it is good to finally be out of the red and into the black. A double from here would not be that suprising.
      Last Oct GACHF was a $1.35/share stock. Listening to Cramer you would have been out of that position at $3-$4. Now it is +/-$10? The pigs finally had their day and got a Presidential pardon? Too often a Cramer endorsement is just a kiss of death! Cendant, Montpelier Re and some paint manufacturer with lead paint exposure are just a few of his bombs.
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    • Mon Jun 23rd 01:39 AM
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      Banks Are Failing, So They Are Changing the Rules
      "Periodic audits will flush out the liars'' ? The CEO of New Century "retired" 3 months before the company came clean and said it would have to re-state it's financials going back for 3 full quarters. What good do these audits do if the truth about a corporation's financials is manipulated for that long? We still await the perp walks. What happened with SARBOX? "What can investors do except vote...?" The whole country will vote in Nov. Then we will see what can be done to the "evil doers" that thought they were representing the investor class. It is so bad for Republicans they are having trouble finding candidates. Now a days you get their campaign materials in the mail and it says "Candidate for...." . The only way you can identify that it is from a Republican is that the letter is missing the "union label" watermark! 5 million Iraqi refugees and 4 million Americans losing their homes. The "evil doers" are about to be held accountable!
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    • Fri Jun 20th 04:40 AM
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      2 Safe Bets Amidst Big Banks' Worrying High Yields
      USB ? What are you looking for, a bank stock for capital gain or a bank stock for yield? If you venture into USB, best to overweight your investment in the USB-PrE & take the +7.5% dividend. As the author noted, it is safe from the the share of capital to be paid out to commoners. If things turn around in the economy in 2009 and it continues strong in 2010 there is a chance the "E" will be called at it's 2010 call date. Even without a call the issue will gain in value as it will be subject to call. That could be a near 25% capital gain compounded by the 7.5% quarterly payout. While I own the "E", I do not own the common.
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    • Thu Jun 19th 07:19 AM
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      Fifth Third Clobbered in Capital Raising Plan
      Window effectively closed for financing subordinated debt? Lehman just floated out a 8.75% Cvt issue. They were seeing C's 8.5% on their last issuance and raising them a quarter. Now FITB is announcing they are going to raise $2 billion? How do they expect to float one out now at less than 9% ? It is obviously time for a "Resolution Trust" type of intervention from the Federal government. The affordability index that distressed sellers are selling into in the Ohio-Michigan area has not improved very much, if at all. We now see a lot of the lower pricing of homes being eroded by mortgage interest rates that are actually higher to reflect real credit & inflation risk, as well as monthly heating costs increasing by 25-35%. Ben the Dollar Slayer has let the Genie out of the bottle. His puppet master has totally destroyed the Republican party. It is to the point now where Republicans are having a problem even finding candidates for Congress and Governorships. When they do they campaign as "Candidate for" The only way you can determine they are Republicans is the lack of a union label watermark on their materials. Without some kind of gov't takeover most of these banks that are still claiming dubious assets as capitalization are going right out of business. WM, & WB will go right after FITB goes bust proving there is no salvation.
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    • Thu Jun 19th 01:58 AM
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      Wachovia Still Does Not Understand Pay Option ARM Risk
      WhaBitt stew! What else can these Bozo's at WB say? They have to keep convincing people to buy their subordinated +8% debt. Too bad for them the days of selling this paper at 8% are now history. Lehman last week just floated out a new issue of Cvts at 8.75%. FITB is raising $2 billion? Good luck to them getting less than 9%! The preferred shareholders want their dividends in full on every div date. Screw the common shareholders they are "Welch Rarebit". Where do these failing banks expect to get the money to pay their light bills? It's just more of the same 400K laid off in banking and financial services leading to another 400 k laid off . No banks loaning money at the true risk premium, trying to peddle 100% tax rate CDs at 3.5%, telling shareholders dividends are safe and going out of business over a Weekend. The Fed drools as the market rules. The Feds funds rate at 2% "should help these financials"! Help them borrow more money at +9% ? "Things will become more clear after the election." Ben the Dollar Slayer has let the Genie out of the bottle. It is now a clear choice for the future. Tax and Spend Democrats or Tax cutting massive spending to inflate the economy to prosperity Republicans. "Goin' to the candidate's debate?...Laugh about it, shout about it when you've got to choose. Every way you look at it you LOSE!"
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    • Wed Jun 18th 12:37 PM
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      TimberWest Forest: Real Estate vs. Timber
      The company's stock performance has indeed been relatively good since the last quarter reported severe cash flow challenges. The one over hanging issue with most all timber land stocks or trusts is the proliferation of the pine bark beetle. This pest is taking advantage of global warming which increases it's toleration to both higher elevations and latitudes. It is a risk to the entire forested areas of North America. With the 2008 Winter Olympic Games coming to greater Vancouver/Whistler/Bla... in 18 months after the closing ceremonies in Bejing. TWTUF may be a dark horse play on the ongoing and increasing mini-building boom in anticipation of the events.
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    • Tue Jun 17th 05:49 AM
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      Timber: Shake the Money Tree
      CUT, NLR and LSO seem to make up the triumvirate of grossly under valued commodities that have significantly lagged behind the other commodity classes. The CUT seems to be the most likely to provide great returns. As far as China goes the SNOFF is a great play. The VCP in Brazil is also a worthy BRIC investment. The best of the Forest products companies are the Canadian and not the US companies named in the article. Our neighbors to the north continue to enjoy the permanent unfair trade advantage to the US. The Canadian government views the timber industry as a vital one to it's economy. They provide both direct and indirect subsidies to the industry to help it through these intermittently difficult markets. A nice little gem is ATBUF, 40% owned by BAM . Brookfield's CEO Bruce Flatt is reguarded by some as the Warren Buffet of Canada as far as I-D ing undervalued assets and scooping them up. ATBUF is in the process of converting to a REIT that will preserve the tax advantage of their dividend payouts. You vcan expect a 40% total return in it over the next 2 years as it moves to $14. While dragging along at the bottom of the barrel and with some cash flow problems to cope with the TWTUF may be a great play on NOT the China Olympics but the 2008 Winter games that will commence within 18 months of the close of the Bejing events. Operating for the most part on Vancouver Island it is involved in Real Estate development as well as timber production and milling. They have closed or sold or dumped some mills and are trying to get lean. Pays a great dividend which is actually a interest payment on the bond portion of the "stapled unit" share structure. It's proximity to major ports of Seattle and Vancouver make it ideally suited to take advantage of the growing export markets. They should benefit the most from Gov't handouts. Hey, it's not our tax money! Perhaps the most promising is CFPUF. Canfor is a very large Income trust with a very generous yield. They are a major player in the OSB market and are continuing to improve their exports. Benjamin may have been seduced by "plastics", but today that one word could be "pallets". The lowly wood shipping pallet is the foundation of world commerce. Add to that the increasing world consumption of computer and toilet paper and you have a very nice play outside of construction for timber products. The pulp industry while not doing so well here in the USA due to high energy costs continues to see increasing world demand. As another poster also noted even the wood "waste" that is left after the production of OSB can now be used in the production of "wood pellets" for home heating. So that leads to the issue of the increasing likely hood that we are going to see some increases in Americans dying from Heat Exhaustion, Hypothermia and it's consequential carbon monoxide poisionings. NLR is an obvious solution. As the price of corn heads for +$10 a bushel the slaughter of breeding stock in the hog, dairy and steer markets must increase and drive down meat prices. Until.... Got LSO?
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    • Tue Jun 17th 05:04 AM
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      Bernanke's Statements: Blatant Lies or Wishful Thinking?
      As far as the " ragmatist" thinking...
      ` The US makes up about 5% of the worlds population and currently uses about 26% of current world oil production. Based on what has happened in Mexico and Russia where declines in production have occurred and what seems to be the inability of OPEC to SIGNIFICANTLY increase production there is less oil production for more demand. This is of course unsustainable long term. Marginally increasing domestic production will not off set the unsustainable nature of the US's oil consumption. The ANWAR is oil that we will eventually get but by then other oil wells will have peaked. The real problem with the US oil crisis is that the oil is a non replaceable resource with real intrinsic value. The US dollar on the other hand is no longer a paper fiat currency. Paper has been replaced by "electronic funds" transfer. A hundred billion here in TFAs and few hundred billion there in TRCAs, a few hundred billion to replace the money not raised by taxes to pay for Medicare and SS. Hundreds of billions shipped overseas to stock the shelves of Wal-Mart and supply the refineries of Exxon-Mobil. Hey might as well throw in a few trillion for "liberating" IRAQ. America has created a worldwide credit crisis and huge world inflation by flooding the world with their paper/electronic money. The solution is an obvious one and will not come about until thousands are dying of heat exhaustion and hypothermia here in the US. Nuclear power is coming back and big time. In the meantime coal fired power will bridge the gap. The only technical challenge then will be to the transportation segment of our economy. As long as the nation clings to the idea that more domestic production of oil is a solution when it is no long term solution at all then things will just get worse for our economy and the valuation of a US dollar. Ben the Dollar Slayer will eventually go away and resign in disgrace just as so many of his CEO buddies at the worlds major banks have fallen on their swords. It is hard to predict when the nation will be ready for more reality and less O'Reilly. Dummya and his band of henchman can indeed proclaim, "Mission Accomplished!!!". Globalization is now a reality . Dozens of US companies and thousands of US citizens now have great viable businesses and jobs while hundreds of businesses and hundreds of thousands of decent jobs have been eliminated. We have created the greatest concentration of wealth in the last 100 years. It is the same old story for the Republican Party. Be careful what you wish for...
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    • Thu Jun 12th 04:13 AM
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      Nixing Onyx - Cramer's Lightning Round (6/11/08)
      Watch for another chance to get the AES PfC below $47.50. In the mean time own the common. They are all over the world. They just got spanked in Kazakstan or some other Stan on a power plant appropriation. See if the turds can keep it running? AES and BG Group the British energy conglomerate are in LNG power plants and projects all over the place. AES will rock. Add some of that preferred on price weakness to get some income stream in line with the common appreciation potential. The "C" is well past it's call date, so a purchase below the $50 par price means a good dividend with a great opportunity for capital gain.
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    • Tue Jun 10th 09:17 AM
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      An Overview of the Global Shipping Industry
      The ALEX is indeed a shipping company, but. It is about 35-40% a real estate developer in both Hawai'i and the West coast. They are very focused on the Hawaii-Mainland and inter-island trade, along with a position in the US West Coast-China trade. They also have a large agriculture business growing subsidised sugar mostly on Maui and working in a co-operative arangement with the privately held Robinson Family sugar cane production on KAUAI. Most of the combined production goes to the local mills and then on to Crocket, CA for final processing. The land and water resources of this part of the company are not fully reflected in the stock price. Fuel costs are killing the profits in the Jones Act protected Island trade. Probably still over valued at $47 but if it slips below $41 it will be worth talking a partial position or few.
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