Tuesday, May 27, 2008

Petrobras Explores

Petrobras,the state oil company of Brazil,has 5-8 billion barrels of estimated reserves.It has several exploratory wells in the Jupiter,Tupi and other fields.Many fields are in the final phase of appraisal.They are finding very good results,working with the four largest drillers,with whom Petrobras has years of experience.Petrobras is now producing 2.3 million bbl a day,but will increase that to 4.5 million over the next five years.They have made a very large investment in refining,and have enough resources to finance the projects,with a strong cash flow and a very high exploratory success rate,CEO Gabrielli asserted.

The Petrobras Powerhouse

Jose Sergio Gabrielli de Azevedo,CEO of Brazil's state oil firm Petroleio Brasileiro,or Petrobras(PBRa),predicts we are going to see a very high level of volatility in the oil markets over the next five years.There will be a very high level of price with a very heavy level of volatility.Petrobras is bigger than General Electric(GE)or Microsoft(MSFT),being the fifth largest company in the world.Its Tupi oil field will have an extended production test in March of 2009,and will enter a pilot production period at the end of 2010.It is a very deep field,requiring new types of technology.

Ken Fisher:Going Forward

Ken Fisher of Fisher Investments,which manages 49 billion dollars U.S.,says we had a correction.It was archetypal,almost identical to the 1998 correction.Recently the transports made a new high,which they don't make in a recession.Stick with large cap stocks going forward,Mr.Fisher advised.Stocks remain under-owned.Large companies with good credit have easy access to money.Green investing will be a huge theme going forward.He continues to be bullish on energy prices,as the economy is stronger than people think it is.Train and truck capacity utilization is very high,and planes are full of vacationers.Mr.Fisher likes Veolia(VE),Intel(INTC),General Electric(GE) and Nokia(NOK).They were never able to borrow cheaply,but now there is a reallocation of credit in favor of these companies.

Tuesday, May 20, 2008

Stanford's Investing Perspective

Sir Allen Stanford,CEO of privately held Stanford Financial Group,which manages 50 billion dollars U.S.,thinks Brazil is an incredible place.It is self-reliant in energy.There is a housing boom.Its bank stocks look good.Brazil will be an incredible place well into the future.As for the U.S.,he says it is a 10-12 year proposition for an investor.In the U.S.,the dollar is low and there's a credit crisis,while a billion dollars a day is being spent on the Iraq war.It's pretty spooky,he said.The Stanford Financial Group stayed out of subprime securities because they couldn't understand what the risks really were.You really wonder what was going on in people's minds,the forthright executive observed.Mr.Stanford likes Russia,India and China-in that order.Russia is flush with money,he noted.

MCI Hikes Fee

In a risky move,long distance provider MCI is more than doubling the monthly fee it charges for paper billing.The fee is being hiked from .99 U.S. to 1.99.Few other utilities,if any,charge such a fee.Complaints may be filed with the Federal Communications Commission,which has jurisdiction over MCI.MCI is a division of Verizon Communications(VZ).

Del Monte's New Campaign

Del Monte Foods(DLM) is launching a new ad campaign for its many pet food brands.Del Monte owns Milk-Bone,Meow Mix,Kibbles 'n Bits and other leading brands.The marketing push is called "Power of Paws."It emphasizes the value of pet ownership to human health.Del Monte pet foods "build and strengthen the bond between people and pets.Help us make a difference and unleash the Power of Paws." The program has its own website,www.PowerofPaws.com.Del Monte has partnered with the Animal Medical Center and the Bergin University of Canine Studies.Its pet food division is based in Pittsburgh,Pennsylvania.

Tuesday, May 13, 2008

Pandit's Plan

Vikram Pandit,CEO of Citigroup,has revealed his plan for the financial firm's recovery.In his vision,Citi is a Global Universal Bank,not a financial supermarket.The restructuring will take a couple of years,and full earnings will not be realized until the restrucuring is complete.There will be a 400 billion dollar U.S. cut in non-core businesses.The consumer finance and credit card businesses are strong.He aims to increase return on equity 18-20%,and earnings 8-10%.Over 2-3 years,Citi will get fit,restructure and maximize,returning to profitability.It will cut expenses by 15 billion dollars.At present,Citi has about 370,000 employees.Since last summer,it has cut more than 13,000 jobs,and there are more cuts to come.


Rogers Reports

Investor Jim Rogers of Rogers Holdings,who recently moved to Singapore,notes that real estate has been down in Asia,on account of Westeners not coming there as much as they had been.There was too much speculation in China,but China and Taiwan have the best markets now,while there is a slowdown in the U.K.,the Netherlands and Spain.The U.S. recession will be worse than expected,but he's been hearing about an oil bubble since it was 3.00 U.S. a barrel.There has been no major oil field discovery in 40 years.There is no production of commodities.Three billion people in Asia want to live as the West does,and now they're working very hard.They have huge ambition and drive.It's a world that used to exist in America and Europe.It's astonishing,Mr.Rogers observed.

Buffett's Best

Warren Buffett,a grandfatherly billionaire,says the economic crisis is not a short run phenomenon.We are already in a recession.The Federal Reserve did the right thing in bailing out Bear Stearns(BSC),but the U.S. dollar will continue to drop for the next 10 years.Nonetheless,he continues to look for a business he can understand,at a sensible price and with a durable competitive advantage-a business he can trust,such as Coca-Cola(KO),American Express(AXP),Procter and Gamble(PG),Burlington Northern(BNI) and Johnson and Johnson(JNJ).He has added them to his portfolio.Mr.Buffett is very fond of cherry Coke.

Tuesday, May 6, 2008

Social Networking and Beyond

The whole social networking space has been hard for Google to monetize,CEO Eric Schmidt said.The development of advertising tools and platforms on MySpace has been difficult for Google,and it's working on that.Eventually, there will be five billion phones for six billion people.There will be small phones,big phones,fast networks wherever we go.The Internet is growing faster outside the U.S.;so is advertising,so revenue should grow faster there.Europe has been Google's stronghold for a long time.Now Google is doing well in Japan and nicely in China.Google has 50 development centers worldwide,Mr.Schmidt noted.

Integration and Innovation

The integration of Doubleclick into Google will take about six months,CEO Eric Schmidt said.Customers want to buy advertising in one bundle,as Google offers.Google is an innovator.If it innovates,it can get your business.Its 12 billion U.S. in cash is a strategic option for the future.Video is powerful.There are glimpses of professional content on YouTube,but Google hasn't figured out how to make money with YouTube.That's their priority this year,Mr.Schmidt remarked.

Focus on Google

Eric Schmidt,CEO of Google(GOOG),has been reflecting on his firm's present and future.Cloud computing is a technological breakthrough,the bespectacled executive said.You don't have to worry about where anything is stored.Google doesn't focus on the short term movement of its stock price.It focuses on the huge opportunity that is before it:the automation of the advertising industry,which is a trillion dollar business.Google's ad technology is getting much better.Not much affected by macroeconomics,Google focuses on quality:fewer,more targeted ads.That's the secret of Google.You want to get those customers and leads right now,and that's what Google does,Mr.Schmidt said.

New Jersey in the Red

New Jersey has one of the worst budget deficits in the nation,according to Governor Jon Corzine.Although the state is a center of the pharmaceutical,chemical and shipping industries,it is still plagued by red ink.This is because of twenty years of structural mismanagement,coupled with a recession,Mr.Corzine said.Mr.Corzine,a former chairman of Goldman Sachs(GS),is displeased by the risky attempt to close the state pension funding gap by taking on more debt in the form of pension bonds.That's the way he used to operate at Goldman Sachs,the governor observed.