Sunday, January 30, 2011 2 comments

Sunday Spectacle CVII




Note that these are electricity input costs in 2025 and aren't reflective of the current situation. It's impressive that wind cost drops below nuclear. However, note that the wind cost doesn't include backup power (from baseload plants) which is necessary to operate the intermittent wind power plants... On another note, very few would have expected natural gas to be so cheap, and just a bit above coal.

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Sunday, January 23, 2011 1 comments

Sunday Spectacle CVI

Battling a nasty cold & cough... and so disillusioned with love... Anyway, here's something for investors to reflect upon...
Bull is Goldman Sachs; bear is Societe Generale (read the linked article if interested)

(Graphic by Sataoshi Kambayashi for The Economist. "Buttonwood: Worlds Apart," January 20, 2011)

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Sunday, January 16, 2011 1 comments

Sunday Spectacle CV

World's largest mechanical front-end loader

(Photo by John Lehmann for The Globe & Mail, January 14, 2011. "Copper Mountain Mine gets new life")

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Sunday, January 9, 2011 0 comments

Sunday Spectacle CIV

When American States Defaulted...

Land values soared. States splurged on new programs. Then it all went bust, bringing down banks and state governments with them. This wasn't America in 2011, it was America in 1841, when a now-forgotten depression pushed eight states and a desolate territory called Florida into the unthinkable: They defaulted on debts.
This was an incredible step, even then. Fledgling U.S. states like Indiana and Illinois were still building credibility on global debt markets. They rightly feared "a prejudice so deep and wide" that they could never sell bonds in Europe again, said one banker.

...

When the defaults began in January 1841, investors dumped state bonds, pushing yields above 12% in early 1841, and to nearly 30% by 1842. The consequences of those defaults would last for decades: Among historians, the rule of thumb is that U.S. states would pay interest rates one percentage point higher than Canadian issuers the rest of the 19th century. To this day, Mississippi hasn't paid back some of those bonds, even after a 100-year English bid to collect.

The defaults weren't crippling. U.S. states went back into the public markets in the railroad boom of the 1850s, most of them armed with stronger safeguards for creditors and new constitutions.
(source: "When States Default: 2011, Meet 1841" by Dennis K. Berman for The Wall Street Journal. January 4, 2011)

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Saturday, January 8, 2011 2 comments

What will happen to Borders? Not sure

Borders Group (BGP), the 2nd largest physical bookstore in America, is on the verge of bankruptcy (here is a history of Borders for those interested in the industry). It's still a bit too early to put the nail into the coffin, but the odds are long that Borders can survive without concessions from bondholders or book suppliers. Borders has posted losses for 4 years straight and something like 14(?) of 16 quarters.

The question is whether it will liquidate (chapter 7 bankruptcy) or restructure and re-emerge (chatper 11 bankruptcy). The path chosen is important because it has big ramifications for competitors like Barnes & Noble.


I started looking at Barnes & Noble (BKS) after Geoff Gannon suggested but it looks like Geoff has sold out of his position for a negligible loss (apparently because he found better opportunities elsewhere). I, on the other hand, still find Barnes & Noble attractive. I am sticking with the notion that, suggested by Geoff a while ago, Barnes & Noble's low price-to-sales ratio gives it some downside cushion.

A Borders merger with Barnes & Noble, as suggested by William Ackman, a key shareholder of Borders, would be disastrous for Barnes & Noble. Borders offers nothing for Barnes & Noble. However, a liquidation of Borders will probably provide a big bonus to Barnes & Noble. I'm waiting to see how this whole thing turns out.

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Monday, January 3, 2011 0 comments

Sunday Spectacle CIII

Letter Exchanges during the Enlightenment Period
(source: "Digital Keys for Unlocking the Humanities’ Riches," Patricia Cohen for The New York Times. November 16, 2010. Graphic accompanied the article.)

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Saturday, January 1, 2011 4 comments

2010... The Year It Was

History books would record the year of two thousand and ten as...

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Happy New Year to all the Bulls & Bears



Happy New Year

and

All the Best to You & Your Family

Here's to Investing Success in 2011...



(Image credits: Bull and bear based on sculpture by Roger Martin; Fireworks photo by Tony Shi)

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