Will Obama Win Re-election?

July 4th, 2010

It’s unlikely that Obama will win re-election if the economy does not improve. He has failed to get congress and the rest of the world to go along with a sustainable path to recovery. As of yet, the recovery is still out of reach, with a double dip recession seeming more likely.

Stock Picks May 27th, 2010

May 26th, 2010

The recent fall in the stock market, because of the European debt crisis, oil spill, and the conflicts with North Korea has created another buying opportunity.

Transocean LTD (Public, NYSE:RIG) and BP plc (ADR) (Public, NYSE:BP) you will double your money with these stocks. The overall daily costs of the oil spill are less than their daily profit, which is kind of disgusting.
Banco Santander, S.A. (ADR) (Public, NYSE:STD) you will double your money with this stock, and more probably. Strong growth in latin america with this stock, though it’s a spanish stock and spain is having lots of problems with other banks.
National Bank of Greece (ADR) (Public, NYSE:NBG) Your money will increase 3-5 times. They will not fail.. they’re too diversified in other countries.
General Electric Company (Public, NYSE:GE) You will double your money with this stock, though it will take a while, the thing keeping GE down is that their banking operations suffered badly in the financial crisis.. which is a significant portion of their business.

Recommendations & Research April 21st

April 20th, 2010
Here is my current research on particular stocks.  I will fix the format of it later.
RECOM. Stock Book Rat.Price E.Div/Y PE EPS Expected Price Industry
WK BUY DAC 5.06 55.3% 3.63 1.4 3.6 Danaos Corporation
WK BUY CT 2.83 56.5% - -25.73 5 Capital Trust, Inc. – loans and securities backed by commercial real estate assets
WK BUY TCAP 14.87 11.4% 54.83 0.27 Growth Triangle Capital Corporation
BUY@5.50 KCAP 0.5x 5.59 23.3% - -1.11 2.4 Kohlberg Capital Corp
BUY@3.43 CEP 3.75 42.6% - -0.41 7.46 Constellation Energy Partners – Natural Gas
BUY@1.90 GNV 0.7x 2.16 84.7% - -1.97 4.6 GSC Investment Corp – debt and equity investments through bonds  business development company
TTM @ 19.10
I already have positions in GNV, CT & DAC. I may expand my positions in those companies.
I plan to purchase CEP and KCAP, with a larger order for TTM (tata motors)
Until next time…


April 13th, 2010

Some small cap stocks I’m considering are TCAP and KCAP. I see these microcap stocks as high growth potential with a good dividend yield. As long as you make above inflation, it’s better than putting your money in a bank.

TCAP (Triangle Capital Corporation). Their dividend yield is 10.78%, EPS is 0.27, the market cap is only 181.64M and their PE Ratio is 56.19.  Assets have nearly doubled each year since 2005.

KCAP (Kohlberg Capital Corp.)  Their dividend yield is 12.12% . EPS and PE Ratio are not known.  Market cap is only 122.50M. Assets have increased since 2006, but recently they’re hit a rough patch. However, the growth potential is favorable. If management does their job, the dividend yield should increase by atleast 18% in the next year. That will provide you an excellent return on your investment ontop of increase in shares.

They’re worth researching more..

High Dividend Paying Stocks

April 12th, 2010

These stocks have had massive dividend yields, and I’m assuming they will in the future. They’re so cheap that even a few hundred bucks could turn into a few thousand easily.

The Shippers DAC and OCNF are will positioned to regain their share prices as they post higher profits and start issueing dividends again.

Banking stocks, like CACB may be near bankrupt, but if it survives, it will pay you a huge reward.

Investment stocks CT, ACAS, and KCAP pay massive dividends. I’m assuming they will resume. ACAS is less attractive in my opinion because of the lack of revenue growth.

The stock NICK is overlooked because it’s small cap. They’re consitently growing, making money and expanding their business. It is a good bet for a small cap stock that pays a good dividend that may increase 5-10 fold. Oh, and remember, small cap stocks always outperform large cap stocks because they are overlooked.

Trade Deficits in China?! What about India?

April 12th, 2010

The Yaun has been pegged to the dollar since the financial crisis, which has allowed China to weather the storm. This has infuriated US official who want to take advantage of the Chinese economy and export to it–to help their own economy.  In fact, recently, China posted a rare $7.24 billion trade deficit, due to imports of oil and raw materials–which will likely be used for exporting later on.

The massive injection of capital into China through foreign markets simply because of it’s size and workforce is a bubble. During the 90′s dot-com boom, everyone was buying internet stocks. It was hot and the growth seemed endless. Same thing happened with the real estate market. Foreigners even purchased a lot of American real estate, sometimes with the profits high oil prices gave them, driving the prices sky high. It happened with oil, too.

The Chinese refusal to allow the yaun to rise against the dollar is proof that the Chinese acknowledge that their economy is fragile and they simply can not sustain such rapid growth without such measures. The Chinese market is export driven.

The Indian market isn’t export driven, yet growth in India is slightly behind China. India has been virtually untouched by the financial crisis and is at better position to have longer lasting growth than China.

By the way, has anyone even been paying attention to Argentina and Chile? They were once rich countries that aren’t full of improverished citizens like most of their South American neighbors…The age of dictators and military rulers in those countries which have revershed strong economic gains have seemed to end. I think it’s time we pay attention to those countries. Especially since the United States seems to favor FTA’s with Latin American countries.

The Looming Debt Crisis of 2012?

March 20th, 2010

An interesting Article appeared in the New York Times that points to a debt crisis in 2012. In fact, the maturing of US government debt, corporate bonds, and paybacks that were put off due to the 2007-9 financial crisis will put a severe squeeze on the US financial markets.

Will this cause another recession, cause a domino of bankruptcies, or prolong our current problem of debt-laden companies that continue to waste billions of dollars without entering bankruptcy?

Chinese Bubble

March 20th, 2010

 The Chinese economy is simply growing too fast, and characterisc of economies in the past that have had rapid growth, there will be a steep decline, rather than a consistent gradual increase. In fact, the Shanghai Composite Index of stocks jumped 80 percent last year and property prices rose at the fastest pace in almost two years in February, helped by a record 9.59 trillion yuan of new loans in 2009.

China has pegged the yuan to the dollar since July 2008 in an effort to help it weather the global recession. The Chinese central bank buys dollars and sells iyaun to prevent the currency from strengthening, driving foreign-exchange reserves to a world- record $2.4 trillion as of December 2009.

Exports dropped 25% in 2009, but yet the Chinese economy continues to grow by double digits. Foreign investment in the Chinese economy has skyrocketed. The stimulus that the Chinese government was one the largest in modern history, more than three times the size of the US’s stimulus bill by GDP.

Chinese lending has been pretty liberal. As the financial crisis took many European and American banks out of the market–China has been filling the role–making all sorts of risky investments. Furthermore, Europe has been investing in Africa for hundreds of years and have not yet been successful in getting a large return on their investment. Do you think China’s spending spree in Africa will change anything? There’s also a large trade war looming between the US and China. You’ll either see a new cold war or a massive burst in the bubble. Either way, it is good for the US economy.  Enjoy your high flying Chinese stocks while it lasts!

After Peak Oil

March 20th, 2010

Peak Oil is Here! The oil bubble has burst and the US reserves in Alaska and the gulf will last less than 10 years at current production rates.  Mexico pumped nitrogen in their oil fields to salvage them. Dubai is out of oil. What is happening?  It is plausible to think that OPEC countries are claiming more reserves than they have to gain bargaining power on the world stage. Let’s face it, oil reserves are in decline worldwide.

But that’s not all. China and India are consuming more and more oil each day, likely to eventually surpass the United States.  Global electricity consumption will double in the next 25 years

What’s the alternatives?

- Biomass
- Wind, Solar, Tidal, Geothermal.
- Coal
- Natural Gas
- Ethanol From Plants
- Nuclear

In the short term, Coal will likely become the dominate fuel. The United States has the largest coal reserves in the world and will likely use the coal to make gasoline and other fuel. Natural Gas will continue to be a strong player, but it is relatively difficult to turn methane into gasoline.

Most ethanol in the world comes from oil. It is unlikely that ethanol from plants will be nearly as cost effective.

Solar costs a lot and requires a lot of factory smoke to produce those solar cells, so solar is out. Wind is intermittent
and is costly to maintain. Do you think environmentalists will let geothermal plants to be built on volcanoes? probably not.

That leaves coal and nuclear energy as the dominate providers of energy in the United States.

New Nuclear fission reactors, and thorium-based reactors with accelerator-based systems can operate at sub-criticality, reducing the saftey risk, should theoretically be attractive options. Fusion power may become viable in 20 years, depending on the sucesss of ITER.

Companies that will dominate these segments are usually not traded on the stock exchange, therefore our options are rather limited to these companies:

Nuclear Stocks: Cameco (CCJ), USEC (USU), General Electric (GE)

Coal: North American Coal (NC), Headwaters (HW), Rentech (RTK), National Coal (NCOC)

Break Up The Banks!

March 3rd, 2010

In Europe, plans to break up banks in the United Kingdom to limit risk and promote competition were approved. But what about the United States? Isn’t this the place where all the financial turmoil started in the first place?

Thomas Hoenig, president of the Kansas City and Fed Richard Fisher, president of the Dallas Fed think so. These are two prominent members of the federal reserve system that think the “Too big to fail” banks should be broken up in the United States. These corporations receive an unfair government subsidy. Furthermore, an international agreement must be reached to allow loans to be given by banks not on American soil and to break up large too big to fail banks that pose a risk to the entire industry if one fails.

During the great recessions, one thing is sure.. Banks are what hampers recovery. Alternatively, during the severe downturns (including the Great Depression), when many small banks don’t have enough capital to make loans the government could theoreticly use their power to force the big banks to make loans and provide capital–but has that worked now?

If banks are broken up and they become more competitive between one another they will have more incentive to make loans and insolvent banks could simply go bankrupt without having to spend billions of taxpayer money. The toxic assets disappear without having to prop of a huge company that uses these risky investments for a significant portion of their profit, like AIG.