Jan 29 2011
Week 02 2011
( Please see Kangaroo Money’s Disclaimer published as Disclaimer 2011 on 01/09/2011 . )
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One of the USoA Space Shuttles being rolled out to the launch pad.
As shown above, the USoA Space Shuttles move from their specially designed Vehicle Assembly Building over to the launch pad it will fly from via a specially designed Transport Crawler at the rate of .8 miles per hour, making the full trip from building to pad in about 5 to 7 hours, depending on which launch pad is chosen. Should there be something wrong with the orbiter assembly — like what happened during Christmastime in 2010 — the process works in reverse, returning the orbiter assembly to the Vehicle Assembly Building for necessary repairs. Now, you are most likely questioning what this information is doing as the lead in to a financial blog that discusses the USoA economy here in 2011. Good question. So allow us to answer.
If the Space Shuttle is not 100% approved to fly by all the powers that control a launch or flight of that craft, it needs to be backed away from the launch area, fixed and the movement process restarted again. Because of launch windows, flight times, payloads, NASA schedules and personnel issues, the decision to roll a Space Shuttle to the launch pad and a decision to roll it back to the Vehicle Assembly Building is not easily made. It is costly, time consuming and a huge scheduling problem. But, nonetheless, in the interest of safety and performance, a reset is sometimes necessary. So, back the Space Shuttle goes along that slow, crawling route to be repaired prior to being launched, because once it is up in space it may never be repairable.
The Economy can sometimes do the same thing, taking that same reverse road trip so as to get back on track. And, as with the Space Shuttle, it is not a decision that is taken lightly, made quickly or performed without considerable effort. The Economy, like that slow .8 miles per hour trip from launch pad to building, can barely be seen going in reverse until after the trip is complete. In trying to see that movement, many false views can be plotted as forward progress because of a trick of the eyes, or in this case seen as statistics. And suddenly, mistakes can be made in plotting a successful course full speed ahead. This is one of the problems that the current USoA Government has had in the last 2 years in trying to decrease the percentage of unemployment and increase overall business production. The process is steady but slow, forward but building, often invisible during but obvious after the process has occurred, and most importantly, the overall process works best with minimal input from the outside world.
At this time, the current USoA Administration is finding out just how the 2010 November Election results will impact them and the desired implementation of their overall programs voted into operation during 2009 and 2010. The overall business community, especially manufacturing and service sectors, are terrified that what happened to the financial sector will happen to them, namely lost of investor faith, additional government regulation, and worst of all, government oversight / “partnering” due to behoven money in the form of loans and bailouts. Business has always understood that there are times that the forests must be thinned to allow for the health of the best trees to survive. Government believes there are times when the forests must be clear cut and replanted to allow for any healthy trees to grow again. The former allows slow ongoing growth and the latter allows slow ongoing growth with the difference being that the former allows the market to dictate how things happen while the latter tries to follow a dictated directed path that the market usually ignores.
With all of this being said, the Dow Jones Industrial Average is up 96.2 points since the first of the year in 2011, oil and silver are both way, way up in the same time frame just to name two commodities. This has driven up transportation costs, chemical costs, energy costs, food costs and the like. When your basic operating material costs rise faster than your production capabilities and sales totals do, the economy is not doing well. Too many things are pointing to a necessary pruning of the forests to clear out the dead wood and let the good trees flourish. Not enough things point to clear cut all of the wood available and do a replant of the forests then wait for a regrowth of strong timber to sprout before their eyes.
So this week, as the KM Team and KM Partners put the acorns of years past to growth pruning here on the website, we leave you this week with a quote from a NASA leader that is keeping to our lead comments above. Please see if you can figure out who this is without looking below to find the answer. “”The teams have done a tremendous job of staying focused and working this problem. There’s been lots of ups and downs but the team has really stayed focused.” Yes, it’s NASA saying this, not the current Administration economy gurus or even Wall Street. But don’t you wish it WAS those groups saying that?
Now, let’s blast off to learning, earning and enjoying shall we?
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We at KangarooMoney.Com and KM Partners realize and appreciate you taking your time and effort to read our blog. All of us here at KangarooMoney.Com will continue to be here to help you find the way through the economic minefield that seems to have been created. For this week, and going forward, the typical weekly information will appear up front and the new weekly information will appear down below. Enjoy, learn and earn for the future as we all find our way back from the fear and darkness that has been.
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First and foremost, the KM Team and KM Partners have decided to publish our Disclaimer as a separate posting effective January 2011. Please spend a moment reading that posting to make sure that you understand that the writers of this blog are expressing their opinions only. When you have finished reading the Disclaimer 2011, please spend some extra time going back and keeping us honest by reading some of our previous postings — and verifying the dates! — to see how the KM Team and KM Partners have been doing for the past year. The KangarooMoney.Com and KM Partners all think that you will find our “opinions” are better than some other peoples’ so called “facts”. Please make sure to leave your comments on your thoughts and our opinions. Each and every comment will be read prior to posting!
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You the reader, will find the KangarooMoney.Com weekly comments here on this page with more detailed opinions and reasons following after you hit the ( click here to read more ) highlight. ( Currently, the KM Team has turned this feature off so that one and all can get a feel for our writing and to read all that is available. In the future at an to-be-announced date, this feature will be turned back on. ) As an educated reader, you know that anyone can tell you a “fact” in a one or two sentence blurb but, the KM Team and KM Partners like to back up our comments with our own views that you can read so that you can understand where we are getting our opinions from.
Below this weeks articles, there is the Updates and Comparisons Section, or the U & C as we call it here in the office. In the U & C, the KM Team will give you some of the latest information concerning some of the previous comments and articles that have been published here as well as comparing the KM Team and KM Partners take on things as opposed to some of our mainstream and blog world counterparts. The Updates and Comparisons section is a nice way to see if the KM Team is staying the true course in the stormy ocean of The Economy.
Down lower on the page, you will find our Market Mover of the Week feature, which highlights a prediction for the one person that the KM Team and KM Partners believe will be the one person most responsible for shaping and driving the USoA markets and / or economy for the upcoming week. Included in this feature is the follow-up on who the MMW was for the week just past as well as pointing out if KangarooMoney.Com was correct in our prediction of who this was and who we determined to be the real Market Mover of the Week.
Going lower, you will find a similar feature called International Impact Incident of the Week. The Triple I section will highlight an international situation either just passed or an expected upcoming event that the KM Team sees as having a major impact on the USoA financial markets. Similar to the MMoW feature in nature, a weekly review will be held each week and you can track how the KM Team and KM Partners preformed in their predictions. With our multitude of International readers, we expect you all to keep us pretty honest in this section.
Still lower you will find our Definitions of the Week. In this section there will be items that explain some of the more technical terms used in our articles of the week. There is now a BlogRoll attachment that will allow you to go over to a complied dictionary for our DoW going all the way back to the beginning of KangarooMoney.Com. Feel free to hop on over to the Dictionary whenever you feel the need to get the straight scoop on what we’re talking about. Or even just to check out some of the financial / political expressions of the day.
At this time, the last feature we would like to mention is one that we hope will help you to see where the KM Team and KM Partners are coming from and where we are trying to go to. Up in the BlogRoll section of the page is a little something called the Stock Docket, which is a link to a list of companies and their stock symbols that have been mentioned here in KangarooMoney.Com. The link will take you to a spreadsheet that list the company names, their stock symbols, the index they are traded on, the week they were mentioned here, and a listing of stock prices that included the Friday just past closing price. The KM Team with a firm lead from the KM Partners also highlight which stocks we supported at the time of mention and those that we did not support. While this is a considerable undertaking on the KangarooMoney.Com Teams’ part, we all feel that this will help to determine how things are going and guide us through the minefield of the USoA Economy. Eventually this feature is planned to be moved into an interior page, so please comment on this feature as much as possible before that happens.
Those of us that started the Stock Docket would love to have been right each and every time in this area but we have to admit that this is just not possible and sometimes even the KM Team is caught off guard. We feel bad saying that but, we also realize that we are in some pretty good company when it comes to “being caught off guard”. All we’re going to say is that Bear Stearns and Lehman Brothers are no longer with us and that KangarooMoney.Com is still here. It is safe to say that the current Stock Docket is nowhere near where or what the original Stock Docket started out. The dramatic dips, dives and drops of the last few years have caused some serious reconfiguring of numbers as well as some re-evaluations of stocks and companies. Because of those facts, the new 2011 choices, new outlooks and new recommendations / not recommended choices will be put forth by the KM Team and KM Partners and will be tracked as you have grown used to. Like the real world teaches us, choices are rarely life long and unchangeable. We will let you jeer at us in late 2011. Or maybe you will cheer us, as we hope you will. As we said, the last few years have given everyone a left hook from deep center but, we didn’t lose the whole pile…did you? Just remember, a share here, a share there and pretty soon it all adds up to real money.
Please remember that the KM Team, KM Partners, KangarooMoney.Com and all of our contributors are not accountants, stock brokers or personal financial advisers, nor are we even Lawyers. Should any one be any of those professions, full disclosure will be made attached to their writing. In the meantime, you need to be sure that you do what YOU want to do. If the KangarooMoney.Com opinions can help you have a better understanding of what has happened, is happening and / or is going to happen in such a way that you decide upon a path to follow, then our blog is serving a purpose. You don’t have to agreed with us and you don’t have to follow what we publish as the end all-be all of the financial world. All you have to understand is that this blog is ONLY guidance and direction as we believe it. If you or yours uses ONLY our humble writings as your sole guidance and direction in the markets and economy dealings of the USoA to base decisions on, do NOT come crying, or suing, any member of KangarooMoney.Com, the KM Team, or KM Partners for something that has happened that we did not or could not foresee. We certainly hope that this clears up any questions you might have in that regard.
And finally, because we are writing this for everyone to read and enjoy, please don’t be afraid to drop us a comment and let us know how we are doing. This is an ongoing work-in-progress where we hope to bring fresh changes, new site additions and new page features to the blog as we go forward. As the days go by, we won’t forget to tell you how we think we are doing — so don’t YOU forget to tell US how we are doing! Seeing your comments up on the page for all to see is always a rush so be constructive and informative for the community, not selling junk and whining about something deeply personal. Remember, we need to moderate what is written so please be nice and allow us to publish you as is. For now, enjoy, learn and earn!
During 2009, the KangarooMoney.Com team determined that some of the attached websites on our BlogRoll were no longer appropriate to be attached here and active. With that in mind, the multiple discussions that took place in the KM Team offices about taking down the outdated websites and adding new websites to the BlogRoll that are more in line with our train of thought, have now come home to bear fruit. Continuing this week and throughout 2010, new additions to the BlogRoll will take place that will give you, the Reader, new opportunities to visit some of the websites that the KM Team and KM Partners visit on a regular basis. Of course, most of these will be financial or news based but not always, so check out the listing to see what new information is available.
This week, the new addition to the KangarooMoney.Com BlogRoll is one of the most respected and well known financial names in the world. As a news reporting network that keys on the financial engines of the USoA markets and business, the KM Team is adding the website http://www.forbes.com/ which will take you to the premier Forbes website. At this time, Forbes and its well known owner and Editor-In-Chief Steve Forbes, publishes the magazines Forbes, Fortune and Business Week as well as the popular website. As one of the most recognized financial names in the world since 1917, the KM Team feels that this is an excellent addition to the sites BlogRoll. Enjoy this new addition but make sure to use it to your advantage. Just like everything else we try to give you here at KangarooMoney.Com!
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- As the new year opens, the Republicans take charge of the USoA House of Representatives and the USoA economy remains at the very least sluggish, the KM Team discussed what one of the major keys to a successful upswing to the USoA economy could be. <click here to read more> Despite the roundtable debate agreeing that job creation was important it was decided that this could not be the major key to getting the economy chugging along again. The term is too vague and undefined to be anything except a sound bite by any of the political parties in the USoA. This led to a discussion of companies that the KM Team felt was poised to push forward with increasing not just their overall head counts but also to increase their associated feeder companies that could begin moving the economy forward. As always, the KM Team tossed about such companies as Google Inc. ( symbol GOOG, traded on NASDAQ, currently near its 52 week high after a 6 month run up, not recommended at this time ) and even the anticipated IPO of Facebook ( Goldman Sachs is working this particular situation as of this posting ) but it was determined that companies such as these do not really MAKE anything with the exception of advertising for others. For those of us that remember the ”Dot-Com Bubble” burst of March 2000, these companies smack of the same situation in the KM Teams’ opinion. This attitude and opinion pointed the roundtable to review a manufacturer, a maker of physical equipment, that could be an excellent lead in for the next up turn — Caterpillar Inc. ( symbol CAT, traded on NYSE, currently near its 52 week high after a full year run up, recommended at this time). Caterpillar has been striving to recapture its pre-downturn glory and this run-up is a major step towards this goal. Being a major world wide supplier of farm and construction equipment, Caterpillar can indicate where in the world local economy recovery can be in action in the near future. But for as big as Caterpillar is and as fast as the stock is climbing, it has to be noted that in the last 12 months, CAT had 37.68B USD in sales but made a profit of only 1.96B USD. It is always unusual to note that a profit of nearly 2 BILLION DOLLARS is lack luster but it is an item for concern. If sales continue on this pace, that concern will disappear. As the situation stands, Caterpillar is a company that can not only lead when it comes to determining economy upticks around the world but also in supporting and building all of the feeder companies that support the manufacturing facilities in the USoA. The KM Team feels that this type of manufacturing is what is necessary to start the long and solid road to recovery for the USoA, And perhaps even for the rest of the World as well.
- There is little doubt that in a matter of weeks, if not days, there will be a return to the days of a barrel of crude oil costing between $100 to $150 similar to the summer of 2009. Considering that oil is already pushing the $85 per barrel envelope, the question that begs to be asked is when will the high end of that $100+ range be here again?…and what are we going to do about it when it is? <click here to read more> In October 2010, OPEC came out with the pronouncement that it still felt that $75 per barrel for crude oil was a price level they would like to see oil at, this at the time that that barrel sold for between $66 and $70 per barrel. Now that same barrel of crude oil is going for between $88 and $95 depending on where you are buying it from. But how can the price of oil still be rising in a global economy that is screaming stagnant growth at best? How can oil companies still be getting the market back to the $100+ per barrel range when it seems like nothing is happening in the manufacturing world anyplace on the globe? Well, a solid economist would tell you that this is exactly the time to own the items that companies will need to start that long steady growth of manufacturing back to the pre-2008 levels of production that they, and we, all crave. Buying items like oil, steel, cement, building equipment, even land at the bottom of the business cycle is always your best bet. But hedging crude oil at a time like today is hardly a risky bet. It’s one of your best money making chances in the last several years. Let’s face it, with USoA refineries shut down to the tune of over 50%; with the Alaska Pipeline halting oil flow due to a major repair effort on some of its aging buried pumping stations; with offshore drilling still viewed as a disaster just waiting to happen; with most of the worlds major oil fields residing in some of the most unstable, and unfriendly, countries in the world; it is just a safe and sure thing that whispers in the back of people’s minds that oil will NOT be going down in price in the near future. If ever again at all. So, how do you as a share buyer and maybe a true investor get in on the money to be made by this situation? Buying into the major oil suppliers at this time, although a little late, will be your best bet. Companies like ExxonMobile Corp. ( symbol XOM, traded on the NYSE, recommended at this time ) currently trading at a little over $74 per share or $18 higher than its 52 week low just 6 months ago; Chevron Corp. ( symbol CVX, traded on NYSE, recommended at this time ) currently trading at a little over $91 per share or $24 higher than its 52 week low just 6 months ago; even that hooligan of the oil companies we all love to hate, British Petroleum ( symbol BP, traded on NYSE, recommended at this time) currently trading at a little over $46 per share or $20 per share higher than the deep, dark days of the well blow out back at the bottom at the end of June 2010, just a little over 6 months ago. Do you see the pattern yet? At the beginning of the long, hot, “no off-shore drilling allowed” summer of 2010, most oil company stocks could be had for about a third to half of its current share price. Why? Because the Deep Water Horizon disaster scared everyone that ocean oil drilling would quickly be outlawed and the oil companies would have not place left to drill for new oil supplies. A fair opinion considering the utter panic that set in between the end of April 2010 and the end of August 2010. Except for one thing. People in the USoA, Great Britain, Germany, Russia, even China still not only want to drive, those people NEED to drive. As the USoA again retests the $3+ per gallon price for a gallon of low grade gasoline, it will be very interesting to see where the “outrage bottom” is located at. The “outrage bottom” will dictate how many new off shore wells get requested, how many offline refineries come back online, how many unsavory countries still get cash and the almost latest weapons and how many politicians here and abroad get re-elected in the next 12 to 24 months. In the meantime, there seems to be money to be made on rising oil prices which can then be put back into new, and perhaps old school, companies in the same time period. Perhaps you reader should be looking at “green” companies to put that oil company profit into? Or better yet, USoA electric generating companies? Ah, but that’s another story for a slightly later time.
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Updates and Comparisons:
Week 19 2008: In that long ago post, Kangaroo Money pointed out that it was critical to promote and rely on the strength of your brand, using Walt Disney Company as the example. At that time, Disney was trading at about $35 per share. As of this writing, Disney ( symbol DIS, traded on the NYSE, recommended at this time) is trading at $39.74 per share. While that $4 rise in share price between these two articles looks sluggish, a closer review of the share price chart will show that DIS have a large drop off in price per share dropping down to $15.59 on March 9, 2009 before starting its successful 2 year climb back up to its current price. While Walt Disney Company suffered along with every other company in the USoA, and indeed around the world, it shows great determination that the stock dip and bounce is still well ahead of the curve for similar companies during this vast down turn. At this posting, DIS is actually revamping and reviving its associated amusement parks for better customer interactions, is actually realigning its movie studio and television network offerings and is in the process of launching a brand new cruise ship to handle its cruise and island resort business. While other major companies are having major issues with their business plans and are in the process of either continuing their layoffs or keeping their headcount levels at current numbers, Disney is hiring and planning further expansions around the world. Rely on the strength of your brand? As Mickey Mouse would say, ”You Betcha!!”
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Market Mover of the Week 02 2011: There’s a new Sheriff in town for 2011. He’s the 61st leader of a group of 435 men and women whose daily discussions impact and shape the entire world, now and in the future. That new Sheriff is new Speaker of the House John Boehner. As one of the impacts of the November 2010 voter revolution, the Republican Party had the elected seats to take over the USoA House of Representatives and thus elect the third most powerful person in the USoA Government, the Speaker of the House. Rep. Boehner is replacing the outgoing Speaker, Rep. Peolsi, who helped to ram through a number of excessively costly laws and programs over the last 2 years. Rep. Boehner is expected to change the focus of the current elected government by being the driving and guiding force for at least the next two years of the People’s House of the USoA. This week, the KM Team thinks he’ll be the driving and guiding force of the USoA economies and thus, the Market Mover of the Week 02 2011.
Market Mover of the Week 01 2011: The phrase “Everything old is new again” has special meaning in California this year. For those of us who remember the first time we heard the phrase “Governor Jerry Brown” back in January 1975, hearing the same phrase again in January 2011 was not just interesting but rather a full circle traveled back to interesting days. To be honest, Jerry Brown was and is, most likely the only man in California who actually wants the job that he has been elected to. Having already been the Governor of California for eight years from 1975 until 1983, the irrepressible and honorable Brown came back to the position having never really left the scene in California politics having been including the Los Angeles Community College District Board of Trustees (1969–1971), California Secretary of State (1971–1975), chairman of the California Democratic Party (1989–1991), Mayor of Oakland (1999–2007), and California Attorney General (2007–2011). At 72 years old and the oldest currently serving State Governor in the USoA, here’s hoping that “Moonbeam” stills shine as brightly now as he did 30 years ago as the KM Team chose him as the Market Mover of Week 01 2001.
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International Impact Incident of the Week: The vote that started yesterday in the southern area of the country of Sudan ( located in Eastern Africa ) that is a effort to move towards splitting the oil and resource rich area away from the constant warring of the the petty thugs in charge of local areas in the northern part of the country and to create a new nation that may help its starving and dying population. It may also just one big bad situation into two big bad situations as the other nations of the world — the USoA included — attempts to exploit the riches to be found in southern Sudan. China for example, has been on a rapid and pressing hunt for any and all oil that is not located in the Middle East…some that is. That country would be a major player in the new country and a major partner in that government in order to secure contracts and resources. So would Russia. So would a dozen other countries of, shall we say, “dubious intent” when it comes to helping the people of the region verses getting the oil and minerals to market. Consider too that the major players in the roughly half of Sudan who would be left behind in this nation making move — call those players “the men with the guns” — probably will not be very happy to have money taken from their pockets and thus food from their mouths. Those major players may not “let” the southern Sudan leave the fold just because they want. The voting will continue at least until the end of Week 02 2011. The counting of the votes will take much, much longer. But the determination of the outcome of that vote? Well, this vote could make the 2000 USoA Presidential Election issues look like a coin toss both in length and body count. KangarooMoney.Com will keep you dear readers informed of this Triple I issue through 2011 and beyond as necessary.
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DEFINITIONS:
Investor: An investor is a person who puts money into an operation on the basis of long term growth of the operation and of the money that was placed. Investors are not mere stock holders, money changers, temporary lenders or short time bank accounts. An Investor believes in the long term of where they are putting their money not just in the monetary return but in the actual idea. Most common people who own stock in a company are mere stockholders, most stock brokers are managers of money and accounts but and Investor can be more readily identified as someone like Warren Buffett or Steve Forbes.
Economist:The dictionary “explains” this as an expert in economics. That aside, being a Economist is being a person who can explain all or some of what has happened, what is happening and what will happen in a particular economy. Most accredited economists are claimed to be experts in either a National economy or the Global economy. However, it is safer to say that true economists can explain either a specific faction of a known economy or a local economy of which they are an important part.
Sudan:The country of Sudan is located in northeastern Africa, with Egypt to the north, the Red Sea to the east, Kenya to the south and Chad to the west. The country actually borders 9 African nations including some of the poorest and most volatile countries in the world at this time. The Nile River bisects the country giving a East Half and a West Half to the country. Most of the military-militia type members of the country live in the larger Northern section of the country with more communication with Egypt and Libya and the militant factions to be found there. The Southern section of the country, with a multitude of natural untapped and unprocessed resources is very poor and not as tied into the military way of life as the north.
Alaska Pipeline : The term commonly applied to the approximately 800 miles of connected 48 inch diameter pipe that moves crude oil from Prudhoe Bay down to Valdez Alaska. Built between 1974 and 1977 in response to the first Oil Crisis (see Oil Crisis 1973) that drove oil and gasoline prices to 5 times their previous highs in just a matter of weeks, the Alaska Pipeline continues to move about 700,000 barrels of oil per day across the empty lands from oil field to shipping port. The pipeline has been a vital part of the Alaskan and national economy since start up in 1977 providing income for Alaska residents and filling a desperate need for crude oil to the United States of America. It continues to fulfill both those needs as of this posting.
“Outrage Bottom”: A term from the KM Team Roundtable that we are using in the same style others use “gag limit”. An Outrage Bottom would be when a person finally starts to speak out about the latest gas price increase or the increase in HealthCare costs due to new programs and that person is not one who normally speaks out on such things. The KM Team believes that this is a better description of how people react when they are pushed too far by situations that they passed on being some of their responsibility. Popular political uprisings are an excellent example of Outrage Bottom.
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( This weeks quote comes from a man whose head has been in the clouds for a number of years now, Mr. Bill Gerstenmaier, NASA’s associate administrator for Space Operations. Mr. Gerstenmaier was speaking about the current difficulties with the USoA Space Shuttle Discovery and its external fuel tank. Repairs were deemed necessary when cracks were detected on the fuel tank in mid-December 2010. The NASA team decided that the entire Space Shuttle assembly needed to return to the giant Assembly Building for repairs to be performed properly and safely thus insuring a safe launch later in 2011. While Mr. Gerstenmaier did not reference directly why this effort was necessary, one only has to look to the old Soviet Union in July 1969 at the N1 launch to see why sometimes backwards is better than ever forward. )
Going forward, the KM Team and KM Partners want to thank you all for reading us and keep those comment coming in. As always, enjoy, learn and earn! The KM Team and KM Partners.
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