Thursday, January 28, 2010

HAYEK VS KEYNES - Economics 101

Great Depression 2?Image by Renegade98 via Flickr

Economic theory comes in many forms and with many faces of great (or goofy, depending on your own theory) economists attached. However, no matter what economic theory you conform to, you are bound to cross the wide path of the two greatest economists of the 20th century, Austrian Friedrich Von Hayek and John Maynard Keynes.

In the most basic sense, Keynesian economic theory is reflected greatly in the current morass in the markets as it's practitioners pump more and more liquidity into an already over liquid system. There is, however, just as strong an opposing view on economics and that is from those who are disciples (so to speak) of Friedrich Hayek.

Here is a great YouTube video, done as a rap, produced brilliantly by John Papola and Russ Roberts, which presents both sides, that of Keynes the "interventionist" and Hayek the "free market" maven. Yes, it is simplistic, but the message is strong, and it should send chills through new and old investors alike.

My personal sense is that the worst is yet to come, and may be here as soon as summer 2010.

In any event, it is not only entertaining but highly educational for the uninitiated. No matter where you stand, you will like this video. Enjoy!




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Saturday, January 23, 2010

Obama burned by big bank bonuses!

Barack Obama speaking at a campaign rally in A...Image via Wikipedia

There once was a guy named Obama,
who caused quite a financial drama,
when he scolded the banks, their share prices tanked,
and investors went running to Momma!

John Heinzl - The Globe and Mail.

Wow, what a week on Wall Street. The big dogs of gluttony were given a kick in the rear by no less than the President of the United States. Did they derserve it. Yes they did. Do they deserve the financial and regulatory chains that will envelope them over the next few years. Most certainly.

When "banks" like Goldman Sachs use their clients money to buy tankers full of oil, sitting in docks around the world until the price of oil spikes, and when J.P. Morgan owns wind farms in direct competition with some of it's own clients and investors during a green energy revolution, it's time for change. When Goldman Sachs and other big banks drive up food prices in both the developing world and the developed world, it is time for change. When they pay out $160 Billion dollars in executive bonuses in the face of the devastation of the U.S. economy, it's time for change!

What do these companies make? Why they make money, lots and lots of money, and they make "no apologies". Now I know that statement goes to the very heart of capitalism, but at what cost. For each and every member of the United States congress, they have three lobbyists in Washington to look after their interests. For clarity, the American public have one person speaking for them for every "three" people speaking for the banking lobby, and that doesn't even address the tie in with actual Government bodies that were meant to regulate these behemoths and did not.

Maybe President Obama should consider financial advisers who "are not" the alumni of Goldman Sachs and J.P. Morgan. Just maybe, an outsiders point of view might bring clarity to a bungled regulatory regime. After a full year of "back burner" status while the health care debate took center stage, the economy is finally and decisively, in Obama's sights.

So where does this leave the small investor trying to find sense from the current fiasco? Technology, green energy and resource companies. Companies that actually make things that will make the world a better place and that will make life easier, and the environment cleaner. Companies where they still "make things" as well as make money. Buying such companies on the current dips could boost your Retirefund tremendously over the coming year.

Don't cry for the big banks. They always find a way to wriggle free. Watch for that to happen over the coming months.

Also see: Seeking Alpha


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Friday, January 22, 2010

Ballard Power Systems is on a roll (excuse the pun)

A hydrogen fuel cell public bus accelerating a...Image via Wikipedia
(Updated March 25th 2010)
We have been high on Ballard Power Systems for awhile now. Today Ballard was added to the new, clean Tech Index on the TSX, and the spike in the stock price (and the high trading volume) is a direct result of that. If you act quickly, you may be able to get in on the upside of this trade.
(Also added to that index was another of our clean tech stocks, Azure dynamics.)
Ballard, situated in Burnaby, a suburb of Vancouver, is the grand daddy of the fuel cell industry. It's founder is considered the father of the hydrogen fuel cell industry and the company has spawned other companies known as "Baby Ballards" like plug power. It has for the past 20 years, been on the driving edge of the green energy revolution.
Ballard has produced working hydrogen fuel cell buses for several cities (Chicago and LA are two) and recently delivered a fleet of 20, brand new, hydrogen fuel cell buses to the Vancouver transit authority. Those buses shuttled athletes and fans by the thousands to the winter Olympic Games in Whistler. The International press also got to ride these buses.
At a time when the world is looking for green energy solutions, and the world press is falling over themselves for stories to run about this part of Canada, Ballard Power Systems showcased to the world a bus that runs on pure hydrogen. You can drink the water from it's tailpipe because that is the only by product of their fuel cells, pure H2O. No doubt, every politician interviewed will mention it and want to be seen standing beside those buses.
Ballard is expanding it's reach into Europe and India as they partner with European companies to supply fuel cells on the continent and they recently signed an agreement with India to supply 10,000 fuel cell powered back-up units for the Indian telecommunications industry for their wireless infrastructure which is ramping up.
No doubt the international reporters will also comment on the fuel cell forklifts Ballard is now supplying to companies from Chicago to Shanghai, and the possibility of stacking their fuel cells to power trucks, ships and to build giant, utility grade generators to power cities. More buses were delivered this week to California, London and Amsterdam.
On March 17th 2010, Ballard CEO, John Sheridan, will present at the 9th, Jefferies Global Clean Tech Conference in New York City.

If you like green energy investments then you cannot discount this first mover in the fuel cell space, especially this year, as it ramps up and finally become profitable.
Disclaimer: We have owned Ballard Power Systems ( BLD-TSE) (BLDP-Nasdaq) for several years. Over the past 12 months the stock has gained 84%. In the midst of the first pull back of 2010, Ballard was one of the few stocks that actually traded a little higher. We believe it will go higher still. Much higher!
Updates:
COLLEGE PARK, MD and VANCOUVER, April 27 /CNW/ - Ballard Power Systems (TSX: BLD; NASDAQ: BLDP) today announced the launch of a new center of excellence for the advancement of fuel processing technology, with founding partners University of Maryland (UMD) and U.S. Department of Defense Army Research Laboratory (ARL). The new center - named FuelWorks(TM) - will be located at the University of Maryland in College Park. 

Update: July 30th 2010 - Ballard builds worlds largest fuel cell generator!
 
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Thursday, January 21, 2010

Electric cars vs Fuel Cell cars - the argument for both!

Honda Fuel Cell CarImage by Joi via Flickr

Electric Vehicles - EV's

Electric cars from Tesla Motors to the Chevy Volt, Toyota and Hyundai have been the talk of the investment community for the past 2 years. Lithium players have benefited from the hope of this technology and new Junior miners are jumping into the space looking for fresh Lithium deposits. However, according to John Peterson, the technology itself may not be a viable alternative to the internal combustion engine found in 98% of vehicles today.

John Petersen, an alternative energy expert with a strong background in electric battery technology, makes a very good argument for investors to shy away from the hype and keep a solid foundation in "facts" instead of "hype". I recommend you read this informative article at Seeking Alpha. Once you have read this, and digest the argument, you may no longer wonder "who killed the electric car"! It may be that the electric car killed itself.

However, this begs the question, why is Honda going with it's new fuel cell vehicle? Is Honda's management stupid or has it done due diligence that makes it run in the opposite direction of the herd mentality! Why has Ford contracted with Azure Dynamics to have their electric drive train in Fords new, "Truck of the year".

After all, a herd mentality led to the over production of SUV's in the 1990's. A herd mentality led to every asset and stock market bubble in history, including the meltdown of 2008. Mr. Petersen makes a very strong argument for seeking a contrarian investment strategy when it comes to Electric vehicles replacing the internal combustion engine. Here is our contrarian view.

Fuel Cells

Hydrogen is the most abundant element in the entire universe. When astro physicists send out "signals" into the universe to look for intelligent life, they always include the atomic weight of hydrogen in their message. That is how common this element is. Pure hydrogen is also the best fuel for fuel cells used in cars and buses. There is, however, a problem with storage of pure hydrogen, given it's volatility, however at the outset of the production of the internal combustion engine, volatility of gasoline was also a problem, which was eventually overcome. The production and storage of pure hydrogen will also, eventually, be overcome. Where does that leave the fuel cell industry in the meantime?

Natural Gas is the most abundant and cleanest source of hydrogen today, and it is already in production throughout North America, which houses the largest deposits of natural gas on the planet. That gas has only recently become available in abundance, thanks to the fractionation technology developed to extract it from Shale (Shale gas). Natural gas is also easily utilized in fuel cells and although it doesn't have a neutral effect on the environment as does pure hydrogen, it is a much cleaner fuel that any other fuel available, especially when used in fuel cells.

Fuel cell buses are already on the road and in production at this writing. You will see them ferrying athletes and spectators to the Winter Olympics in February. Fuel cell trucks (running on natural gas and eventually pure hydrogen), fuel cell ships and finally large fuel cell stacks to replace coal fired electric plants. Can a battery do these things?

Natural gas and eventually pure hydrogen fuel cells may be the future of transportation, the future of back-up power and the future of power plants in general. Lithium will power the wireless market and, with advances in technology, may power electric vehicles. North America will lead the way, (China is ramping up) and this will no doubt affect your Retirefunds over the next few years, no matter where the market is today!

The argument for Lithium
Electric vehicle drive trains
Vehicle fleet niche-NYT

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Sunday, January 17, 2010

A new, world class, gold deposit is born!

(Update-March 5th 2010 _ Apollo gold is "in play" after latest drill results - MSN Money)

I have been high on Apollo Gold since I first bought the stock at .45 several months ago, and have been doing homework ever since. Earlier this month, I sold some APG at .51 to finance the purchase of more Wilan Technologies. I believe that these two companies have enormous upside potential in the short to medium term. That is why I bought more Wilan and bought back into Apollo Gold last week.

Apollo Gold is set to release it's latest core results from it's Grey Fox site near Timmons Ontario. This site is now tied into their already producing "Black Fox Mine" which will produce around 100,000 oz in 2010. Apollo also bought the Pike River property which connects Grey Fox and Black Fox and which has a rich history in itself.

gold analysts currently have Apollo Gold as a strong buy and I couldn't agree more. It is still trading in the .45 range per share (for now). Those analysts, and this writer believe it is better priced in the short to medium term somewhere between $2 and $3.50 and I believe this may even be too conservative.

Because of it's current production at Black Fox, and it's great core drill results at Grey Fox coupled with it's acquisition of Pike River, we believe it is a world class deposit in the infancy stage. Once the bigger dogs in the gold business get more familiar with the numbers and drill results, we think Apollo will be a takeover target in 2010. In that case, all bets are off and the target price goes straight up.

One note of caution is that Apollo hedged 30% of it's production at $867 per oz, in early 2009, however, this will not keep shoppers at bay nor should it keep you from making some money on Apollo Gold.

Previous Article: Apollo Gold

APG.T

Latest Analyst Report:

J. Taylor - The Au Report - "Apollo Gold has enormous upside potential and has one of the highest potentials for capital appreciation relative to risk involved. We think this company's Black Fox Mine, from which management expects to produce more than 100,000 ounces this year, represents the beginning of a world-class gold mining operation in the making. We say that on the basis of upside exploration potential not only on the producing Black Fox Mine but also on the basis of drill results from the Grey Fox and historical data from the Pike River Property, which Apollo recently acquired from Newmont. With Apollo currently trading at only 42% of NAV, enormous growth in earnings and cash flow starting to take place, enormous upside potential with regards to resource/reserve base and attributable production, Apollo is a perfect takeover target"!

APG.T AGT-Nasdaq

Update, Feb 17th 2010 - Great drill results at Grey Fox
Update, Mar 5th 2010 - Great drill results at Pike River


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Thursday, January 7, 2010

The dark horse of mobile web technology

%u4ECA%u3001%u5B9F%u306F%u6211%u304C%u5BB6%u30...Image via Wikipedia

Wilan Technologies has been one of our favorite stocks since it began refocusing from it's 1990's technology development and now is focused almost entirely on licensing and defending it's many patents in wireless, internet and video. We have been acquiring more of this stock for the past 9 months.

Today this stock rose 11%, and we feel it is just the start of a realization of some tech investors that it is truly a "patently valuable company for the 21st century"! Most Wilan technologies were developed over 15 years ago, but the company is only now being recognized as holding the underlying patents for many of today's top tech toys and business applications.

Over the past two years (Since it has been aggressively protecting it's patents and licensing it's technology) Wilan has signed licensing agreements with 212 tech companies worldwide including many of the biggest brand names as shown here:


This year, 19 more companies, including Apple, will be forced in a Texas Court Case, to either pay for their past transgressions involving these patents, or to license them from Wilan.

Wilan inventions include:

3G Cellular– A range of wireless communication technologies used in modern cellular handsets.

BluetoothTMA wireless technology that sends and receives data over short distances, creating a personal area network (PAN).

DOCSIS
A standards-based technology to provide high-speed internet and other data over coaxial cable networks.

DSL – A standards-based access technology that provides broadband Internet access over twisted pair telecommunications wiring.

Wi-Fi
The underlying technology of wireless local area networks and other products based on IEEE 802.11 specifications.

WiMAXBroadband wireless technology that provides longer-range wireless connectivity based on IEEE 802.16 specifications.

V-Chip – A technology that allows users of multimedia devices to filter out programming they consider inappropriate for their children to watch, whether that be from a television broadcast, DVD/VCR/DVDR or computers that have the ability to receive and process broadcast signals.


Wilan has been making money throughout 2009, in the toughest market conditions, is expanding it's business monthly, increasing cash flow and profit and began paying a dividend in 2009. It's management is completely focused, motivated and is professionally suited to the task of increasing shareholder value.

As I have said for the past six months, we believe Wilan is at least a $10 Stock (probably more) and it is still trading under $3. Last month we doubled down on our investment in Wilan Technologies, even though our initial purchase was already up over 65%. We initially bought Wilan at 1.45, doubled down at 2.40, bought more at 2.94, 3.00 and 3.01

This stock is going much higher. Don't wait!

Related: Wilan signs 212th licensing agreement

Analysts: 4 Buy 2 Strong buy

Update: Feb 9/2010 Buy Recommendation

Update March 3rd 2010 - Financial Post - Wilan on verge of Windfall!

Important date for Wilan Technologies: March 11th 2010 - Texas court case - Markham hearing, where a who's who of major companies, including Apple Inc., Dell Inc., Hewlett-Packard, Intel Corp., Sony Corp. and retail chains such as Best Buy Co. Inc. and Circuit City Stores Inc.will find out how much they have infringed Wilan's patents. Look for a settlement and possible licensing agreements which will bolster Wilan's bottom line.

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