We Know What You Really Wanted

Christmas is over and your family got you an assortment of ties. Can’t be seen with them on in public?

No problem: hide those things in your closet and reward yourself this holiday season with a subscription to the Income Investment Report.

New issue comes out in January.

With 75% sitting in cash and US growth clipping along, I need to start looking for places to swing money back into the market. I cannot just buy back into the oil and energy sector like nothing happened. For sure, I will be allocating money into some of my old positions because I still like them.

But I need to start finding new places to park cash that can grab a decent return. For this, I’m looking through the Income Investment Report for prior researched ideas.

I like SSW as a container ship play. I’m looking at CVRR for refining, to diversify away from the price of oil a little. Gas prices are way down, but so is oil.

I’m interested in REITs GOV, EPR, and RESI.

Auto sales have been well for some time, and with gas prices this low it may be that another big push into new automobiles is looming. An indirect bet that I may take is on MCY, which underwrites auto policies. Insurance companies in general have done very well of late.

I also like ETP, despite having just sold out of it this month. From the sidelines I am more confident than ever that the US shale boom will resume; I’m just not confident all of today’s players will be alive then to enjoy it.

The euro is dead and America is alive.

Such a fool I’ve been, fearing the euro. Clearly we don’t care. Let the Greek isles sink to the bottom of the Ocean, I guess. It’s astounding, really. German 2 year bunds are yielding negative 10 points. Greek debt has flared up, but everyone else is paying record low amounts to borrow. Even Italy and Spain are joining the 2% club.

Do you get how crazy this all is?

And now the US has grown at a 5% annual rate. Cheap gasoline is doing wonders on our economy. Nobody cares about the euro.

If this is the way things really are, oil is not staying below $60 for long. Saudi’s be damned, oil inventories are down 3 million barrels since that same fateful week in late November that it all unraveled.

As for me, I can’t stay on the sidelines for long. It’s time to edge into some good solid consumer stocks, and maybe back into some of my old stocks positioning for a rebound.

5%

It is just tremendous watching what is happening right now in the old world. These times will be sung of (not that we do much singing anymore, not like that, but you understand it’s a figure of speech).

What we are witnessing is nothing short of the third major collapse of the Russian experiment in our lifetimes. The first was the fall of the Soviet Union. The second the fall of the fledgling government that followed in the same decade. And now, we are watching the nationalist pride regime of Putin cave into nothingness.

With these unprecedented times comes certain certitudes, namely that Western finances other than those most speculative in nature have no business meddling in Russian affairs right now. Even in the shadow of the oil markets being torn down destroying a trillion dollars in assets globally, I feel more comfortable there than I do playing political “Russian” roulette.

Take CTCM – a company I recently highlighted in the Income Investment Report – which quite abruptly found itself forced into non-ownership of such a sizable portion of its Russian media assets. Literally one vote, overnight, and the damage was done. I could hardly publish the issue quickly enough, to keep up with the damage of that one legislative act on the part of Russia. I had to add an update as the issue was being finalized, my concerns came to fruition so quickly.

Which brings us to the good chaps on CNBC today. Who decided it was a good idea to openly advocate Russian investments at the expense of Apple?

One is a decidedly corrupt, nationalist wasteland of two failed states, bereft of legal protections for foreigners and undergoing a massive economic downtown (partly targeted, partly bad luck), and literally in the process of bailing out its banking system. And the other is to date the greatest capitalist company the world has ever known.

Not specific enough for you? Just look at the cash numbers. Russia the country has currency reserves of about $500 billion (about half of which are in US dollars). AAPL the company by itself has currency reserves worth $159 billion. A handful of the largest US companies easily match the currency reserves of this nuclear state.

And unlike the former, the later (AAPL included) don’t have a notorious penchant for screwing over their fiduciaries and abandoning their obligations.

The trouble here is that much of the danger to investing in Russia right now is more CTCM, less oil prices. I have no doubt Russian companies will subsist (if they are allowed to), for that is human nature. Endurance,…capitalism,…, adaptation,…these concepts are intricate to who we are and what we do.

But how can you balance that to the threat of a third of your investment being wiped out with the stroke of a pen? Or all of it, even?

The oil collapse was something that could hardly have been seen coming. If you did, you had some very select information. And even if you saw it coming, as some of us did, did you see it going this far? You had to guess both the timing and the magnitude to be right. But still the forces were at least somewhat random; or if not random, then at least uncontrollable by any one party. Yes the Saudi’s, it at least appears, are trying to destroy their competitors (or at least claim they caused the oil collapse for their reputations). Still there are many other players trying to get the price higher again. The game is active.

Not so with Russia. We know that Russian leadership is irrational and capable of extensive damage, with the whims of a spurned temper and a pen stroke. Within the borders of Russia, there are no major opposing players to bet on. There’s no reason to tempt that tempest by pretending it is random.

For those of you who have enjoyed the free edition of the income investment report and the wealth of knowledge it provides, the next report will be available for sale in early January.

Each report is painstakingly assembled, and I peer over all the numbers personally. No automated nonsense here, whereby ridiculous “divide by zero” errors are permitted to float through. My hand personally guides the words on the page to ensure quality of material.

The Income Investment Report is founded on ranking mechanics that filters through The PPT‘s database, reducing 1,000’s of positions to mere hundreds. I then bring to bear increasingly rigid criteria and a myriad of statistics against this list, working the highest caliber names to the top.

Finally, I apply a last inspection, working against public filings and the names I have attained.

What comes out isn’t always the cream. Occasional what floats to the surface isn’t something that should be bought; a questionable company just pretending. They are flagged as such and highlighted in the report, so that value buyers and their current shareholders can know concern. Additional risks are disclosed so that the reader may be fully informed.

And what is left are the great companies we believe a income investor should buy and hold for years. Companies yielding above market averages which we feel are a great buying opportunity.

Take some time this morning to create a free profile and read the current edition of the Income Investment Report.

There was a fascinating report from Bloomberg this morning. Globally, there are now more than $1 trillion in oil and gas assets which are unrecoverable thanks to the decline in crude, excluding US shale.

Deep water, Arctic locations, tar sands, ridiculous topography…all add up to more than $1 trillion stranded. And these numbers are not inclusive of the US shale which is supposedly the heart of this story.

If you were looking for a smoking gun, pointing to this whole debate of Saudi Arabia and market share being sordid nonsense, that would be it.

But at most that proves American financial journalists are idiots. Which beckons the question: then why is crude trading below $60?

If you have the answer to that question, I’ll show you a rich man.