Thursday, April 24, 2014

This Anti Fossil Fuel Obama Administration has Decimated Walter Energy (WLT)

Walter Energy, Inc.
3000 Riverchase Galleria
Suite 1700
Birmingham, AL 35244

WLT's shares outstanding:62.58M
WLT's float:62.23M
Percentage held by Insiders:0.40%
Percentage held by Institutions:102.40%
Shares short as of Mar 31, 2014:32.83M
Short ratio as of Mar 31, 2014:4.10
Short Percentage of float as of Mar 31, 2014:52.70%
Shares short prior month, April:30.58M

WLT has a current short interest of nearly 53%, almost unheard of yet driving force of such breakneck negativity is deeply rooted in anti fossil fuel politics. 
Note the total doom price action after this Anti-Energy Administration's policies have taken hold; WLT's shares sunk from $140.00 to the $7.00 area in just 3-years. 

IF anybody tells you that this Administration is pro Employment or pro Economic (GDP) Growth please use this piece to debunk those lefty lies.    

Chart forWalter Energy, Inc. (WLT)

Our Capitalist Pig Bob dreams that some pro Capitalistic sanity would win and barriers against exporting coal would be lifted. Yet it may be too late to breathe life back into a dying coal co like WLT and the stubborn Donks could care less as they push their Green agenda.

Brilliant American Investor Wilbur Ross has appeared on CNBC several times and said he would stay away from the coal industry until he witnessed some legislation that would lift restrictions on coal exports. We know Asia would become overnight buyers, and how does this makes sense from a pro Growth perspective for the U.S.A. Sadly, the only pro Growth step is the paradox of the Fed's Quantitative Easing with Zero balance from the myopically Green Legislature.


Capitalist Pig Bob,

Inline image 1
'am Fat Money'

Sunday, April 13, 2014

Heed the 4 Consecutive Blood Moons Ahead; Wars and Global Stock Market Prices are in Focus

Hello to All from Capitalist Piglet $ally (CP$),  

The lore is that a full moon causes more heart attacks, births, and irrational behavior. If the U.S. S/P breaches 1,800 I do not think it'll be a coincidence since we're on the cusp of experiencing a total lunar eclipse also called a 'blood moon'. When 4 blood moons occur in a row NASA refers to this event as a Tetrad. This Tuesday, April 15th at 2 am ET will mark the start of the 1st blood moon aka lunar cycle Tetrad. Since financial markets have a history of short-term irrational valuation with no warning, I will be overweight cash for the next 2-years and 5-months in my traditional accounts. I'm not 20-years old anymore and consider myself a shrewd female Capitalist Piglet who knows that Tetrads have had negative effects on global stock markets.

A total lunar eclipse occurs when the Earth, Sun and Moon all line up and the Earth blocks all direct sunlight that normally reflects from the moon. Indirect sunlight still reaches the moon and as it passes through our atmosphere, most of the blue light is filtered out, allowing for the deep red and orange phenomenon.
During the time of a total eclipse the moon becomes reddish, with the color dependent on how much dust and clouds are in the atmosphere, thus the name 'blood moon'. Here's NASA's video explaining the upcoming Tetrad.
The lunar cycle ahead is rare since only 55 Tetrads have occurred since 1 AD, so 2,013 years.   
I think it would be smart for Buy and Hold investors to be overweight cash in their traditional cash accounts for longer than they are accustomed to. 

Since 'History Repeats Itself' and Tetrads have had fallouts, but especially for Israel and Jews, with the ongoing Iranian nuclear program my short and long-term portfolios will be hedged just in case a War erupts through September 28, 2016.

The exact dates of the 4 blood moons:
  1. April 15, 2014 (this upcoming Tuesday beginning at 2am ET).
  2. October 8, 2014.
  3. April 4, 2015.
  4. September 28, 2015.

In the last 500 years there were Tetrads that fell on Jewish feast days:

  • Tetrad in 1493 & 1494: 1492 was the same year that the Jews were expelled from Spain and Columbus discovered America, which is home today for more than 5 million Jews outside of Israel. 
  • Tetrad in 1949 & 1950: The first Arab – Israeli War for Independence; Israel became a nation again for the first time in 2,000 years.
  • Tetrad in 1967 & 1968: Jews reclaimed Jerusalem in 'The 6-day War' which was divided under Israeli and Jordanian rule since 1949.
If history repeats and an overdue event unfolds in the Middle East in the next couple of years, money managers and individual investors who remain more hedged through September 28, 2016 could eventually Outperform their peers, and my time spent researching and writing this piece will be well worth it!

There will be no more blood moons falling on Jewish feast days for 100-years. Every time this lunar cycle struck on Jewish feast days in the past, there was a significant event for Israel within a year of the first or last blood moon of the Tetrad.

My plan is to be more hedged by Monday's close (tomorrow), even though we've already witnessed the S/P pull back over 4% just in the last few weeks. As of last Friday, the S&P 500 (below), DJIA, and Nasdaq, are ALL trend bearish. Could the historical and statistical significance of the 1st blood moon already be in play?

stock chart
Most investors understand that the Federal Reserve Bank's Quantitative Easing (QE) measures have had a positive impact on stock prices. The new Fed chairman, Janet Yellen, has stated that her goal is to end the QE bond buying program by October, 2014

The 2nd blood moon of 2014 will occur just a couple weeks before that QE end date, and by watching CNBC a lot, I know most of Wall Street is very concerned. If Yellen's Fed does hold to that October date and global stock markets fall more than 10%, the pullback will likely be blamed on the Fed but I think it will be more of a negative synergy associated with that September 28, 2014 blood moon.
Dating back to ancient times, there's evidence that lunar phases affect human behavior; just ask an Emergency Room Physician or Police Officer about their experiences during simple full moon. Though rare, there are portfolio managers that reallocate their portfolios based on lunar cycles. If this piece is 'over the top' for your investment taste, I don't see any harm in taking a cautious portfolio approach over the next couple of years.

Some proteges of George Soros and the late John Templeton theorize that there is a correlation between lunar cycles and stock prices.

In 2010 the technical analysis team of Pelc and Bondar from the Royal Bank of Scotland (RBS) concluded that 'new moon' and 'full moon' cycles have had large statistical impacts on stocks after studying 6 global indices.

This unorthodox yet statistically proven market timing theory suggests Buying stocks ahead of a new moon and Selling ahead of a full moon.

Lunar cycles influence our moods and a full moon increases our tendency to feel depressed and pessimistic.  Science shows that our levels of serotonin rise and fall as the moon cycles, causing mood swings; similar to the effect of a sunny versus cloudy day, or the Winter versus Spring season.

Below is a good image of a blood moon:
 This is what a total eclipse looks like.  This is the total eclipse of October 27, 2004 via Fred Espenak of NASA, otherwise known as Mr. Eclipse.   Visit Fred's page here.

This is what a total eclipse looks like. This is the total eclipse of October 27, 2004 via Fred Espenak of NASA.

Ironically, the 4 total eclipses/blood moons ahead will all coincide with Jewish feast days, 2 in the Spring will mark 'Passover' and the 2 in Autumn 'The Feast of Tabernacles'.  

In 2008, Mark Biltz of Tacoma, WA studied NASA eclipse tables, and from a statistical standpoint, many of the ones that have come on Jewish holy days signaled negative events for Israel. Only 7 Tetrads came on important Jewish days in over 2,000 years and just 3 in the last 500-years.

POTC's 2nd Commandment suggests traditional accounts hold a 20% cash to take advantage of special oversold situations with stalwart stocks like that British Petroleum (BP) a few years ago because of that Gulf of Mexico oil spill, but I will ratchet that 20% to 40% until this Tetrad cycle blows over on September 28, 2016.

I will prod CPB to stay up past midnight with me on Monday to observe a developing and potentially market moving event. I hope many POTC partners follow my lead.

For those interested in more information, NASA's Astronomer Mitzi Adams and Astrophysicist Alphonse Sterling will start taking questions via a live web chat beginning at 1 a.m. EDT, April 15th.

And for those of you who don't believe this Tetrad will have negative consequences on your money, at least you have an opportunity to witness a breathtakingly colorful moon - and if for nothing else - its romantic value! I hope I didn't lose Capitalist Pig Bob's attention with my lunar investment theory, because even if it ends up being wrong he better not start snoring before 2am ET and prove that he also dismissed the other value a blood moon offers!

Thanks to POTC for publishing this piece, and I wish fat PEETA profits to all Partners in this 2Q, 2014, 
~ Capitalist Piglet $ally ~


Friday, April 11, 2014

The Brilliant Mohamed El-Erian Reminds Us to Monitor the European Parliament Elections, May 22nd - 25th

Although renewed optimism seems to be arising in Europe, changes need to be made soon to prevent the region from falling into renewed financial turmoil, said Allianz chief economic adviser Mohamed El-Erian. 
“A few things need to happen rather quickly – specifically, over the next several weeks and months – if the continent is to minimize the risk of slipping into another prolonged period of under-performance and additional asymmetrical downside financial risk,” former CEO of Pacific Investment Management Company (Pimco) wrote in a column for Project Syndicate. 
Topping Europe’s critical ‘to-do list’ is the imminent geopolitical threat from the Russia-Ukraine crisis that may damage Europe’s economy, which is in no position to weather further disorderly tensions, El-Erian said. 
“Further escalation would mostly likely cause the West to impose deeper economic and (critically) financial sanctions on Russia, followed by Russian counter-sanctions… All this would tip Europe as a whole into recession,” he added. 
El-Erian also noted that the European Central Bank (ECB) should shift its focus from ‘financial-crisis prevention’ and develop growth supportive strategies. He added the central bank also needs to counter the euro’s “over-appreciation.” El-Erian’s comments come at an opportune time given that earlier this month, the ECB held its monthly policy meeting where President Mario Draghi shared his concerns of “protracted stagnation” and lower inflation in the EU.
The need for European politicians to show strong leadership, the role of individual countries within the EU as well as the importance of the European Parliament election taking place in May, El-Erian said are other factors that will be vital to ensuring Europe’s recovery. 
Despite EU’s long task list, El-Erian said it is achievable.
“Progress on each [task] would help to ensure that Europe’s encouraging spring leads to a bountiful harvest of economic opportunity, growth, and jobs, while reducing the risk of a hot political summer and a more frigid economic winter.”

Thursday, March 20, 2014

Shrouded Facts about the U.S. Initial Public Offering (IPO) Market

An Investor should not let the large 1st day % returns of an IPO fool him/her to Buy and Hold without considering some hard facts. 

The average 3-year performance of an IPO bought on the 1st day over the past 30-years has lagged the S/P by about 20%Yet this under-performance only applies to cos that had < $50M in Sales in the year prior of going public

Investors aware of these facts have a better chance of making a more profitable decision when the time comes to Buy and Hold an IPO.  

Industry breakdown of U.S. IPOs over last 12-months

Perhaps good reason Biotechs are in a corrective phase as the Wall Street Syndicates have created a lot of new froth

The law of Supply and Demand always wins in the end over the IPO Road Show and often painted rosy business Story.  

Guard Up,

Monday, February 24, 2014

Sunday, February 23, 2014

Air Pollution a real Health Problem for the Chinese

Beijing’s air pollution reached eight times World Health Organization-recommended levels as smog in the city persisted for a fourth day, prompting China’s environmental protection regulator to send inspection teams to the capital and surrounding areas.
The concentration of PM2.5, fine particulates that pose the greatest risk to human health, was 198 micrograms per cubic meter near the Tiananmen Square in China’s capital at 11 a.m, the Beijing Municipal Environmental Monitoring Center said on its website. The WHO recommends levels of no higher than 25 micrograms per cubic meter in 24 hours.
China’s Ministry of Environmental Protection said today it has dispatched 12 groups to Beijing, Tianjin and Hebei province to determine if local authorities have taken adequate measures against air pollution and whether curbs on steel, coal, glass panel and cement production are in place. The regulator also sent an urgent notice requiring local governments to better predict air quality and make timely disclosure to the public.
Beijing maintained its air pollution alert at orange, triggering orders for some enterprises to limit production and a ban on outdoor barbecues and fireworks, as smog levels were projected to stay hazardous until at least Monday morning.
Pollution in Beijing and Shanghai placed them among the least hospitable of 40 international cities listed in a report by the Shanghai Academy of Social Sciences, which ranked China’s capital second from bottom, ahead of Moscow.
Smog will persist until Monday morning in Beijing, Tianjin, and parts of Hebei, Shandong, Henan, Shanxi and Shaanxi provinces, Xinhua reported today, citing China’s meteorological agency. The agency forecast the smog will ease on Thursday when a cold front is expect bring winds.
Courtesy of Bloomberg online.

Saturday, February 22, 2014

In early March Obama plans to ask Congress to Cut tax advantages of Employer-sponsored retirement accounts for higher-income earners

B.O. wants to limit the value of all tax deductions, defined contribution exclusions and IRA deductions to 28% of income — and include an overall cap on all retirement accounts, including pensions, that could bring in $1 billion a year in new tax revenue, according to a Pensions & Investments report. Companies must now buckle-in for a 1-2 retirement punch.
According to the report, the proposals are designed to direct more of the tax preference for retirement savings toward getting more low- and middle-income people into the habit of saving.
Based on current tax brackets, Pensions & Investments reported that the 28% limit would reduce the tax advantages of retirement savings for people earning more than $183,000 or couples earning more than $225,000. And the overall cap for all tax-preferred retirement accounts would limit them to providing an annual retirement income of $205,000, which would currently cap tax-preferred accounts at $3.4 million, but could go lower as interest rates rise.
So, who might feel the effects of this proposal? Largely, the top 5% of tax payers. According to the Tax Policy Center, a partnership between the Urban Institute and Brookings Institution, there are about 6.07 million Americans who earned above $200,000 in 2011 and they make up the top 4.2% of taxpayers, according to published reports. 
And what do experts have to say about what the president might propose? In the main, they say the rich need not worry that their tax breaks for saving for retirement will be cut.
“We’ve heard these kinds of proposals being discussed in policy circles for a couple of years now,” said Skip Schweiss, president of TD Ameritrade Trust Co. and managing director of TD Ameritrade Institutional. “It would not surprise me to see these ideas become more formalized through President Obama’s 2015 budget proposal.”
But even though experts expect the president to propose reductions to some of the tax advantages for employer-sponsored retirement plans for higher-income earners, few expect any congressional action. “Given the congressional divide, it’s hard to see something like this becoming law, but of course one never knows,” said Schweiss.
From his perspective, Schweiss said there are at least three problems with the proposal that should be considered carefully.
The first, said Schweiss, is that contributions to retirement plans are made on a tax-deferred basis, not a tax-deductible basis. “That is, while I may receive a tax deduction this year for making my contribution, the government will get its money down the road when I withdraw the funds in my retirement years,” he said. “And it will get more, as it will tax the earnings as well as the contributions.”
This stands, Schweiss said, in contrast to deductions like home mortgage interest and employer-sponsored health insurance premium deductions: once those deductions are received by the taxpayer, the government will not realize the tax revenues from those items, ever.
The second consideration, said Schweiss, is that if someone is in an upper-income bracket, say 35%, and only gets a 28% deduction on her retirement plan contributions, she will pay taxes on the other 7% this year, and pay taxes on those funds later when withdrawn in retirement. “So those income dollars would be taxed twice under this type of proposal,” he said.
And a third potential problem, said Schweiss, is that the more restrictions on tax benefits we impose on retirement plans, the less attractive it will become for a business owner to sponsor a plan. “And who loses then?” he asked “The worker, not the business owner.”
Lena Haas, senior vice president of retirement, investing and saving, for E*TRADE Financial, said those in the industry have a sense of what makes for a good individual retirement plan. And President Obama’s proposals might not be in the best interest of savers.
“There are many ways to encourage individuals to save for retirement: through education and guidance, automatic contribution features, or incentives in the form of tax advantages,” said Haas. “A successful plan uses a combination of these. If one of these features is reduced or taken away, these plan designers are going to have to rely more heavily on the other features to drive participation and engagement.”
“In this instance, less incentives means a greater reliance on education, guidance, or automatic contribution features,” Haas said. “Saving for retirement is hard — you can’t expect participants to participate without some sort of a helping hand.”
Others also say keeping tax breaks in place for saving are critical.
“Retirement security is a shared responsibility between government, business, and individual and a system that is designed to motivate all stakeholders will drive the best outcome for Americans to achieve retirement security, said Joe Ready, director of Wells Fargo Institutional Retirement and Trust.
Ready said he’s hopeful there will be a thoughtful approach to strike a balance between the need for Americans to save and the budget deficit. “The reality is that it’s hard to ignore the fact that pretax advantages drives good retirement savings behaviors, and we need to remember that this is a tax deferral, and that once retirees begin to withdraw from their 401(k) accounts, they do pay taxes,” Ready said.
Although there are things that can be improved about the workplace retirement plan, Ready believes that if employees are given access and improve their savings rate, the system can significantly improve.
What sort of laws are really needed?
To be sure, there are new laws that should be proposed. “The U.S. needs more incentives for people to save for retirement, not fewer,” said Schweiss. “To do otherwise is to create yet more pressure on the social safety net down the road.”
In fact, Schweiss noted that we already have just over half of American workers with access to a retirement plan because many small businesses don’t sponsor one. “We should make it less burdensome and less expensive for a small business to allow its employees to save for retirement, not more,” he said.
So what’s needed? Ideas such as the “auto-IRA,” where employers open their payroll system for employees to contribute into an IRA account, would help, said Schweiss. “We know that if an American does not have access to a workplace retirement plan, only about 5% of them will save on their own,” he said. “We need to make it easier, not harder.”
Ready said legislative proposals that leverage the already existing plan designs would be best. “Of the almost 80 million 401(k) participants, 80% of them make less than $100,000 and are significantly benefiting from the 401(k),” he said. “From our research, we’ve seen that people with access to a 401(k) plan have saved three times more than those without access to a plan.”
According to Ready, one good example of changing the 401(k) plan design that is been discussed in the industry and would not greatly impact the middle class would be limiting the pretax deferral amount to $10,000 and then the balance of $7,500 after tax money could go into a Roth 401(k). “This would keep the $17,500 limit and the taxes from the Roth 401(k) would help with the fiscal budget,” he said.
By the way, just 5% of the roughly 60 million 401(k) plan participants contribute the maximum amount to their 401(k), which is $17,500 in 2014 for those under age 50 and $23,000 for those 50 and older. And roughly another 5% would contribute the maximum amount, if their companies let them.
And according to a Vanguard study of 2,000 401(k) plans with 3 million participants, 11% of 401(k) participants contributed the maximum possible amount in 2012. 
No matter what becomes law, Haas had this bit of advice for all: “One thing is clear: we face an uncertain future when it comes to tax treatments of retirement plans,” said Haas. “So in the same way that you want a diversified portfolio of various assets, you also want to consider diversifying your funds among the various retirement account types — taxable, tax-free, and tax deferred — to address that uncertainty.”
This piece is credited to Robert Powell of MarketWatch, February 21, 2014.