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bobby2loaves 112 posts  |  Last Activity: Feb 12, 2016 2:13 AM Member since: Apr 19, 2008
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  • AIG, the bailed-out insurer that Carl Icahn wants to break up, agreed to give board seats to one of his representatives as well as activist investor John Paulson.

    The New York-based company said it would nominate its existing 14 directors, Paulson and Samuel Merksamer, a managing director of Icahn Capital, for election at this year's annual shareholder meeting, expanding the board by two seats.

    Icahn declined to take the seat himself because of his involvement with a number of other companies, said he was pleased Paulson was joining as well. "We both have stated the same goals for AIG," he noted in a statement, namely to break it into three separate companies.

    AIG's appointments were announced simultaneously with the board's decision to raise its dividend 14%, even after a higher quarterly loss than Wall Street anticipated. Along with the quarterly payout of 32 cents a share, the company approved $5 billion in share buybacks, on top of $2.5 billion so far this year.

    "These capital actions are a strong start towards our goal of returning at least $25 billion to shareholders by 2017" CEO Peter Hancock said in a statement. Hancock said last month the company would shed about a fifth of its mortgage-insurance business through a spinoff, sell its broker-dealer business for an undisclosed amount and overhaul its portfolio to create nine modular businesses, which could be sold individually if warranted.

    The moves followed a standoff between the CEO, and Icahn, who had criticized the company for lagging its peers following the financial crisis, when it sustained major losses in its mammoth property and casualty unit.

    That business remained a thorn in AIG's side in the last three months of 2015, driving an operating loss of $1.10 a share that outpaced the 91-cent loss estimated by analysts. Including litigation reserves and restructuring expenses, AIG posted a net loss of $1.84B, or $1.50 a share, compared with profit of $655mm, or 46 cents a share, a year earlier.

  • From its 2/11/16 earnings release:

    Zurich said it has taken first steps to improve the profitability of general insurance, including job cuts and an exit from part of the U.S. transportation business. It is also considering adding more reinsurance coverage for the unit and may exit a number of under-performing portfolios.

  • Reply to

    Pot is showing it's resilency today!

    by sammy_crew Feb 11, 2016 2:08 PM
    bobby2loaves bobby2loaves Feb 11, 2016 2:48 PM Flag

    POT riding on MOS's coattails today. MOS reported a better-than-expected quarter. From their CEO:

    "Repurchasing shares at the bottom of the cycle is high on the priority list."

  • bobby2loaves by bobby2loaves Feb 9, 2016 6:59 PM Flag

    Politics aside, $10 tax a barrel on oil is good for ethanol. And what's good for ethanol is good for POT.

  • Can anyone explain what this is all about? I was thinking the Jansen potash mine might be on the chopping / selling block, as BHP's largest discretionary capital expenditure left.....

    BHP Billiton Invests In Carbon Capture Research Centre

    Written by SaskatoonHomepage.ca

    A global resources company with a prospective potash mine in Saskatchewan is investing money in this province for carbon capture research.

    BHP Billiton is building the mine by Jansen Lake about 180 kilometres east of Saskatoon.

    The $20-million investment announced today (Fri) will help establish a global centre for carbon capture and storage, based out of Regina.

    BHP Billiton Chief Commercial Officer, Dean Dalla Valle (vale), says even with the shift to eventual phasing out fossil fuels, the technology is extremely valuable.

    Boundary Dam is a fully working model of the carbon capture technology, which Dalla Valle says provides immediate benefits for the climate.

    Premier Brad Wall says an investment from private enterprise like this shows that there is meaningful interest in this technology across the globe.

    SaskPower's Boundary Dam Power Station is the first carbon capture and storage facility in the world that is integrated into a power plant.

  • Huh? Are they thinking of dumping CO2 into Jansen as it is mined? Or maybe all the shaft will be good for is to pump CO2 into the existing brine solution? The Boundary Dam model to which they refer uses a coal mine's CO2 emissions to fill the well. I don't get these guys.

    BHP Billiton Invests In Carbon Capture Research Centre

    Written by SaskatoonHomepage.ca

    A global resources company with a prospective potash mine in Saskatchewan is investing money in this province for carbon capture research.

    BHP Billiton is building the mine by Jansen Lake about 180 kilometres east of Saskatoon.

    The $20-million investment announced today (Fri) will help establish a global centre for carbon capture and storage, based out of Regina.

    BHP Billiton Chief Commercial Officer, Dean Dalla Valle (vale), says even with the shift to eventual phasing out fossil fuels, the technology is extremely valuable.

    Boundary Dam is a fully working model of the carbon capture technology, which Dalla Valle says provides immediate benefits for the climate.

    Premier Brad Wall says an investment from private enterprise like this shows that there is meaningful interest in this technology across the globe.

    SaskPower's Boundary Dam Power Station is the first carbon capture and storage facility in the world that is integrated into a power plant.

  • Reply to

    A Note to OneWayToMars4

    by bobby2loaves Feb 2, 2016 10:46 AM
    bobby2loaves bobby2loaves Feb 7, 2016 9:17 AM Flag

    Skibum, just wanted say your post means a lot to me. I never received any formal training in investing. I'm just a literature major who got interested in stocks while I was contracting for MasterCard at the time they went public.

    So, I started listening to Jim Cramer's internet radio show (yeah, he used to have one those - - and it was way more informative than what he can do on CNBC now - - I can't even watch that happen). And I started reading up on investing and trading.

    Successfully investing in individual tickers for yourself is a rare and bold thing. Almost no one really does it. As the saying goes, you can't rely on anyone else's opinion, and must do your own work. And when you've got a good idea, you've got to lay down a massive bet, or else you're basically just playing the indicies. When I own a stock, I read everything written about it, listen to every quarterly and industry conference call, go through the SEC filings and basically think about it every day as the business environment shifts.

    I've been wrong plenty of times, made a few narrow escapes, and have managed to beat the S&P for 8 of the past 11 years, sometimes by quite a lot. Even so, I am always questioning my own sanity and choices, as some of the tickers I once loved have found their way close to zero.

    Through the years, I've gotten more conservative, maybe even a little wiser, and don't play with fire quite the way I used to.

    But generally speaking, aside from one friend to bounce ideas off of, this is a game I play alone. Even my wife is suspicious of the good years I have. So, it means a lot to get that kind of feedback from you.

  • bobby2loaves bobby2loaves Feb 4, 2016 12:18 PM Flag

    Not really. I know you understand the industry better than me. I have a feeling you are going to tell me things are going to be harder, not easier, even with these curtailments. Care to teach the less savvy among us?

  • Looks like MOS is getting on board with the program.........

    PLYMOUTH, Minn., Feb. 3, 2016 /PRNewswire/ -- In response to current crop nutrient market conditions, The Mosaic Company (MOS) announced today the Company will reduce production in its Phosphates business. The Company intends to reduce production by up to 400,000 tonnes with rotating plant shutdowns in the first quarter of 2016.

    "With the recent price volatility and decline in raw material costs, buyers appear to be delaying purchases. This is lengthening the seasonal period of weak demand," said Rick McLellan, Senior Vice President, Commercial. "Today's crop nutrient prices, including phosphates, are attractive to farmers globally and we expect a strong demand response after this seasonally slow period."

    "The long-term positive outlook for phosphates has not changed, but we are adjusting our production levels to match immediate demand and manage our margins," said Joc O'Rourke, President and Chief Executive Officer.

  • Reply to

    Man. This Board is Quiet.

    by bobby2loaves Feb 2, 2016 3:51 PM
    bobby2loaves bobby2loaves Feb 3, 2016 8:16 AM Flag

    Thanks for signing up on my account. Looks like another good quarter where book value went nowhere. Seems like it's always something that wipes out net income - - energy losses, currency devaluation, assets that can't be marked to market.......

    I guess at some point those go in reverse, or at least stabilize, and we get to see the profit flow through to book value.

    Sounds like it's a tough environment out there. But as always, WRB is hopeful with the ACE/CB merger and AIG breakup. Also sounds like they will eventually re-structure their tax domain, if all else fails. I could easily see them going to a 15-20% ROE if everything falls into place.

    Until then, I suppose the stock is relatively cheap here at $49 and 1.32x book. I guess we hope to plod along with 15% annual gains until the next hard market comes, hopefully while I'm still alive.

  • bobby2loaves by bobby2loaves Feb 2, 2016 3:51 PM Flag

    In the past 3 months, this board has had 7 posts, including 4 spam posts, and 2 obscure topics by yours truly.

    Yawn.

    Well, quarterly results come out today. Wonder if WRB book value will finally leave the $36-$38 range after being there for what seems like an eternity.

    Owning this stock feels like driving home from Florida in one day - - except for the past 18 months.

  • Reply to

    Bonds

    by ferdinando_cortese Feb 2, 2016 10:11 AM
    bobby2loaves bobby2loaves Feb 2, 2016 3:40 PM Flag

    Mail everyone a check for $5,000 and see what happens. George Bush sent everyone $300-$600 back in 2001. Probably time for another such flood.

  • Reply to

    Bonds

    by ferdinando_cortese Feb 2, 2016 10:11 AM
    bobby2loaves bobby2loaves Feb 2, 2016 12:20 PM Flag

    Here's how I see it, Ferdinando.

    The debt cycle has gone wild. There is more on every level, in every country, than at any point in my lifetime. Credit cards, student debt, mortgage debt, state debt, federal debt, corporate debt, pension funds......all of it.

    The only way we've managed to get this far is with multi-century low interest rates. And even then, there are plenty of the above entities on the brink of insolvency, with debts continuing to climb every year, requiring even more of income to go towards interest payment.

    Either we have to let a ridiculously large chunk of the world default on their debts (I'm not exactly sure who would be left at the end of all the dominoes falling) or we have to grow our way out so that all that massive new global GDP make the the debt seem tiny.

    We are not going to do it with plain old organic growth alone. The world's population and innovation don't grow fast enough to keep up with the current spiraling debt growth.

    Much easier, and much more politically palatable, would be to inflate our way out.

    Deflation and inflation are really cousins in the same dysfunctional family. You can pick either one to help get you through a monetary imbalance. But inflation is much more fun to have at your annual Christmas party.

  • Reply to

    Bonds

    by ferdinando_cortese Feb 2, 2016 10:11 AM
    bobby2loaves bobby2loaves Feb 2, 2016 10:50 AM Flag

    I'd say commodities have about priced in 10 flat inflation years at this point, wouldn't you?

    And then if you consider that 10 years without inflation would virtually destroy all the debt structures around the world that need to grow their way to prosperity (or massive worldwide defaults, good luck selling that), there might just be upside inflation surprise ahead.....

  • bobby2loaves by bobby2loaves Feb 2, 2016 10:46 AM Flag

    You've got it all wrong, man. You're treating POT as if it you were having to liquidate its tangible assets, and right here at today's depressed values.

    POT is a profitable business, even here at 8-year low potash prices, no matter what bothers you about the balance sheet.

    POT's balance sheet is currently not in trouble. They had EBITDA of $482mm last quarter. That's a run rate of $1.928B annual EBITDA. Almost $2B a year in the worst pricing environment in 8 years. Does that sound like a company that is on the ropes to you?

    With debt covenants of 3.5x EBITDA or greater, this would allow them long-term debt of $6.478B, more than twice the current level of $3.17B. Or viewed another way, EBITDA could be cut in half, EPS could drop almost to zero, and the debt covenants and balance sheet would still be OK. And they are currently estimating 2016 to be as profitable as 4Q15 on average, with substantial improvement in 2017.

    These guys are best of breed in one of the few commodities where a competitive moat still exists. Haven't you wondered why POT is still doing just fine, thank you, while players in coal, steel, copper, oil, gas, tankers, gold, etc are going bankrupt and getting S&P downgrades?

    Now. If potash/ton prices crash down into the $100-$200 range, things will indeed get dicey. And your $11 prediction is easily within reach.

    But the difference between $11 and today's $15 a share will be a rounding error viewed 5 years from now, a mere $3B in market cap, for a company that will some day in the next 5 years be netting $3B a year and be valued $30B higher (250% gain, plus 6% annual dividends) than today.

    If you are smarter than the futures markets and can forsee further price declines in 2016, more power to you.

    As for me, I'm willing to admit I'm not that good.

    If you want to obsess over the balance sheet another 1000 times in the next 60 days, be my guest. But I won't be responding - - as my opinion is not likely to change one bit.

  • bobby2loaves bobby2loaves Feb 2, 2016 8:55 AM Flag

    Good point. Reduced Cap Ex would be good for them. Monetizing the property for cash even better. If S&P is asking for meaningful Cap Ex cut, though, Jansen is their last, best project to get this accomplished, however they approach it.

    I probably should be careful what I wish for. This would be long-term play for POT, and perhaps not helpful in the short-term.

  • bobby2loaves bobby2loaves Feb 2, 2016 8:12 AM Flag

    Cost to build Jansen is regularly published as $15B.....not going to get there spending $423mm a year.....costs going to ramp over time.

  • bobby2loaves bobby2loaves Feb 2, 2016 7:52 AM Flag

    Probably just wishful thinking on my part here.......could you imagine what a bitter pill to swallow it would be for BHP to sell its Potash mine to POT.....after building it to compete with POT.....after getting snubbed in its takeover bid?

    That said, Andrew Mackenzie did say in an interview last year that if Jansen had value, if not ultimately for BHP, then for someone else.......

  • bobby2loaves bobby2loaves Feb 2, 2016 7:49 AM Flag

    Probably too much to hope for, but if POT would use its recently ramped up credit facility to buy Jansen for a couple billion, that would explain a few things:

    (1) Why credit facility just spruced up to accommodate current environment.
    (2) How POT could afford a deal without cash on books
    (3) Why POT's lowered dividend could help it pay for the added interest cost of $100mm or so
    (4) Why Tilk recently said "One of those opportunities could also include adding a new project that would generate a “great return."
    (5) Why POT would have just closed New Brunswick, saying it would not need to be re-opened for a decade, or perhaps longer.

  • BHP Credit Rating Cut at S&P on Lower Price Forecasts
    Note in the last sentence: "S&P has effectively set a timeline for the producer to make further cuts to capital expenditure". Isn't Jansen the obvious choice here? $2b a year Cap Ex for a mine that won't produce for another 5 years?

    February 1, 2016 — 11:59 AM CST

    Rating cut to A from A+ on lower iron ore, oil and copper
    BHP says it's committed to maintaining `strong balance sheet'

    BHP Billiton Ltd., the world’s biggest mining company, had its credit rating cut at Standard & Poor’s as producers reel from cratering prices driven by concern over faltering growth in China, the largest consumer of raw materials.

    The rating was lowered to A from A+ to reflect changes in price forecasts and “very challenging market conditions and increased demand uncertainty over the coming years,” S&P said in a statement on Monday. Ratings for the Melbourne-based miner may be lowered one notch further after it releases earnings on Feb. 23, S&P said.

    Plunging commodity prices are piling pressure on Chief Executive Officer Andrew Mackenzie’s pledge to maintain a “solid A” credit rating. The company, which reports first-half profit later this month, may need to raise as much as $10 billion through a share sale and scrap its dividend if it is to retain the commitment, according to Liberum Capital Ltd. analyst Richard Knights.

    “There’s certainly a lot of pressure for them to act leading into their next earnings announcement,” Anthony Ip, a Sydney-based credit sector specialist at Citigroup Inc., said by phone. In raising the prospect of a further downgrade following BHP’s earnings result, S&P has effectively set a timeline for the producer to make further cuts to capital expenditure and revise its dividend policy, Ip said.

JGBS
16.910.00(0.00%)Feb 11 4:00 PMEST