Buffett to Expand Energy Wager ‘As Far as the Eye Can See’- Bloomberg 06-09-14

Salient to Investors:

Warren Buffett has been shifting toward capital-intensive businesses like energy and transportation, while reducing reliance on insurance operations and stock-picking. He is planning more investment in energy, in part in renewable power, as far as the eye can see.

Buffett sees the steady but far from spectacular gains of the past five years continuing.

Read the full article at http://www.bloomberg.com/news/2014-06-09/buffett-to-expand-energy-wager-as-far-as-the-eye-can-see.html

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Fareed Zakaria GPS – CNN 06-16-13

Salient to Investors:

Fareed Zakaria said:

  • China does infrastructure better than anyone in the world – trains, roads, airports, subways built at amazing speed, on a grand scale and with great foresight.
  • The HK Nicaragua Canal Development Investment Company, Ltd, will help finance a Nicaraguan canal at a total cost of about $40 billion.
  • The average wait to transit the Panama Canal can top 12 days. Panamax cargo ships, which carry  4,500 containers, are the biggest that can transit the Panama Canal. Triple E cargo ships can carry over 18,000 containers. Panama is revamping its canal to accommodate bigger ships, but still won’t be able handle to accommodate the biggest post-Panamex ships.
  • The enlargement of the Panama Canal is expected to be complete by 2015, but Colliers says only 10 of America’s 55 major commercial ports will be ready for the bigger ships. The US Army Corps of Engineers expects US imports to grow 4-fold and exports more than 7-fold over the next 30 years. The American Society of Civil Engineers gives America’s ports a C rating. For the last 20 years Congress has diverted more than half of the Federal Harbor Maintenance Tax collected.
  • In 18 years, 60 to 70 percent of shipping will be on the bigger post-Panamax ships.

Jeff Sachs at Columbia said:

  • Jack Kennedy came to profoundly distrust the CIA and the military on giving him advice on what would lead to peace – the CIA is trained to spy or to cause unrest and the military to fight wars.
  • Recent presidents have not had that discerning understanding that the security agencies will not make peace.
  • The path to peace is based on the idea that both sides have a strong stake in peace, that there are human beings on the other side.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1306/16/fzgps.01.html

Oil Riding Rails Creates Jobs as Buffett Puffs Chest: Freight – Bloomberg 03-12-13

Salient to Investors:

Charles Clowdis at IHS Global Insight said hauling oil in tank cars is creating jobs and wealth and investment opportunities – there is much crude that can’t be piped.

The US expanded oil production in 2012 by the biggest amount since Titusville in 1859.

The S&P Supercomposite Railroads Index has advanced 24 percent in the past year versus a 13 percent gain in the S&P 500: 2012 earnings rose 16 percent versus 5.2 percent for the S&P 500.

Ben Hartford at Robert W Baird said rails provide the flexibility of being able to deliver the crude extracted from the shale to different locations and recommends the stocks.

North Dakota is now America’s second-largest crude producer after Texas and ahead of Alaska.

Read the full article at http://www.bloomberg.com/news/2013-03-13/oil-riding-rails-creates-jobs-as-buffett-puffs-chest-freight.html

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Oil Industry Beats Buffett in Railroad Investments Surge: Energy – Bloomberg 01-14-13

Salient to Investors:

North American energy companies are investing more in railroad terminals than the railroads themselves because swelling output has overwhelmed pipelines.  Domestic crude at least 20 percent cheaper than imports.

Rail is more expensive than pipelines but reaches into metropolitan areas like Los Angeles and Philadelphia, where new pipes are hard to lay.

1.2-mile trains of 120 tank cars carry as much as 762 barrels each.

US oil production is projected to increase 24 percent by 2014, while Canadian oil output will rise 57 percent by 2020.

The Manhattan Institute estimates rail is 34 times more likely to spill hazardous materials, including oil, than a pipeline transporting the same volume an identical distance.

Ethan Bellamy at Robert W. Baird said it’s unlikely someone will build a big new pipeline from North Dakota to LA or San Francisco,

Read the full article at http://www.bloomberg.com/news/2013-01-14/oil-industry-beats-buffett-in-railroad-investments-surge-energy.html.

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Shipping Bears Are Ascendant as Fleet Growth Swamps Cargo – Bloomberg 06-25-12

Salient to Investors:

Shipping analysts are increasingly bearish on the outlook for rates to haul iron ore and coal as China grows at the slowest pace in three years at a time of record fleet expansion.

Analysts estimate Capesizes will earn the lowest day rate in at least 14 years, and down 85 percent this year. The fleet is expected to expand 13 percent this year, though the bulk may have passed because growth was as high as 25 percent in the 12 months to February 2011, the strongest since 1982, while outstanding orders are at  21 percent, down from 43 percent of existing capacity back then.

Rahul Kapoor at RS Platou Markets said fleet growth has been huge and above most people’s expectations.

Analysts predict 10 of the 14 members of the Bloomberg Pure Play Dry Bulk Shipping Index will report losses or lower profits this year.

Ole Stenhagen at SEB Enskilda Companies said companies need daily rates in the “high 20s” to break even when financing is taken into account, though the $11,709 predicted in the Bloomberg survey exceeds the $8,000 to $9,000 that owners need to cover operating costs.

Jeffrey Landsberg at Commodore Research said the sheer level of vessel oversupply is just too big, so maybe the demand-side expectations were unreasonable.

Read the full article at http://www.bloomberg.com/news/2012-06-25/shipping-bears-ascendant-as-fleet-growth-swamps-cargoes-freight.html