SUGAR LAND--December 9, 2008--Researched by Industrial Info Resources (Sugar Land, Texas)--Alabama currently has two nuclear power plants that can produce a total of up to 5,008 megawatts (MW): the two-unit, 1,711-MW Farley Nuclear Power Station in Columbia, Alabama, owned by Alabama Power Company (Birmingham, Alabama), a subsidiary of the Southern Company (NYSE:SO) (Atlanta, Georgia); and the three-unit, 3,297-MW Browns Ferry Nuclear Station in Decatur, Alabama, owned by the Tennessee Valley Authority (TVA) (Knoxville, Tennessee.
Other companies featured: McDermott International Incorporated (NYSE:MDR), Toshiba Corporation (PINKSHEETS:TOSBF)
A lot has happened in the markets in the past two weeks. From the biggest one week drop in history two weeks ago, to the best day in history on last Monday. Then, just as things appeared to have calmed down with a relatively mild day on Tuesday, the Dow suffered an 8% hit on Wednesday. I’m sure that if you are reading this article, you have most likely been following the markets and are well aware of all of this already. So, I am not going to go into further detail in this article but rather try to propose a stock that I feel is a safe play in this ridiculously volatile and risky market. That stock is The Southern Company (SO:[More...]
One of the best things about blogging is the instant responses we receive. There are many times you have to be thick skinned when receiving criticism or just tolerant of the foolish people who are either rude or unknowing.
This brings me to Mr. noitall (small 'n' his choice) and the following commentary which followed my recent post $700 billion is real money!
"Well, maybe I was labeled a cynic about 2 years ago when I said the Fed is in a "check-mate" situation, where they will have to choose between saving the stock market, real estate market, or the dollar, but it most likely fail at all three. I don't think I am a cynic, just a realist, and it looks like I was right. Another thing I will say is massive greed, ignorance, arrogance and our willingness to believe in fantasies allowed this to happen. Maybe when a "cynic" questions some of the well known "facts", like the "buy & hold" theory, people should listen & give it some thought, before they believe the "historical data" they are given."
Mr. n and I often find common ground and he is telling the truth when he writes that two years ago he predicted the speculation and down market we are faced with today. While I must say that I find his view bleak, it has to be said also that people should be better prepared for poor markets and tough times.
While Mr n. is correct today and maybe tomorrow, his bearish outlook may not hold true next week or month or year. He does not mention the folly of straight-line analysis, but I am sure he would agree that good times do not necessarily follow good times and for the same reason bad times to not proceed in a linear fashion either.
Regarding his view of the "buy & hold" investment style, he is certainly correct that in these tumultuous times it has waned somewhat, but I would say not completely. I think the notion that a particular investment will be suited to all times is going to depend on what that investment is and what your overall portfolio looks like; and what your personal needs are. Nevertheless, he makes some points worth strong consideration.
In the large majority of cases this last decade buy-and-hold produced little gains. Here is one example where buy and hold worked excellently over the last decade: Chasing Value: Southern Company is somewhere to hide.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of SO.
One of the best things about blogging is the instant responses we receive. There are many times you have to be thick skinned when receiving criticism or just tolerant of the foolish people who are either rude or unknowing.
This brings me to Mr. noitall (small 'n' his choice) and the following commentary which followed my recent post $700 billion is real money!
"Well, maybe I was labeled a cynic about 2 years ago when I said the Fed is in a "check-mate" situation, where they will have to choose between saving the stock market, real estate market, or the dollar, but it most likely fail at all three. I don't think I am a cynic, just a realist, and it looks like I was right. Another thing I will say is massive greed, ignorance, arrogance and our willingness to believe in fantasies allowed this to happen. Maybe when a "cynic" questions some of the well known "facts", like the "buy & hold" theory, people should listen & give it some thought, before they believe the "historical data" they are given."
Mr. n and I often find common ground and he is telling the truth when he writes that two years ago he predicted the speculation and down market we are faced with today. While I must say that I find his view bleak, it has to be said also that people should be better prepared for poor markets and tough times.
While Mr n. is correct today and maybe tomorrow, his bearish outlook may not hold true next week or month or year. He does not mention the folly of straight-line analysis, but I am sure he would agree that good times do not necessarily follow good times and for the same reason bad times to not proceed in a linear fashion either.
There is a lot of bad news affecting the stock market and prices are falling for some very important reasons. These include reduced expectations for earnings, higher unemployment, a lack of liquidity, a housing market that has not bottomed yet, federal spending gone wild, and the collapse of some venerable financial institutions to name a select few.
The Standard & Poor's 500 Index: started the year (Dec 28, 2007) at 1,478.49 and as of Friday October 3 it was 1,099.23, down 25.7%.
There are concerns about recession and even a depression and the global market for most commodities has softened.
Given all this how can I believe that the market is becoming irrational to the downside and values abound?
For one reason I know that many people are selling stocks out of fear of the market going lower and they do not want to be the last one out of the pool. That is a legitimate reason to sell but has nothing to do with the intrinsic value of a company or stock. If the index is being sold off then that means the good are being sold along with the bad.
Another factor pressuring the market relates directly to tight liquidity. I recently refinanced my home and the bank wanted me to reduce my home equity line to comply with its much tighter lending requirements. I sold some stock to accommodate them but this had nothing to do with stock valuations. I also sold some stocks and funds to buy down a commercial real estate loan in the past month. I had no pressure to do so because the loan to value is very low, but we are looking to acquire additional property as distress sales turn up and want to keep our powder dry.
Many people have been allowing their credit card debts to increase but facing little hope of growth in the stock market; those that can are selling stocks to buy down their debts where they can. This too has nothing to do with the intrinsic value of the stocks they are selling.
Companies featured in this segment: Alcoa (NYSE:AA), AK Steel (NYSE:AKS), U.S. Steel (NYSE:X), Freeport-McMoRan (NYSE:FCX), ThyssenKrupp (FRA:TKA), Holcim (VTX:HOLN), Canadian Natural Resources Limited (NYSE:CNQ), Cytogenix (NASDAQ:CYGX), Dow Chemical Company (NYSE:DOW), 3M (NYSE:MMM), Sony Corporation (NYSE:SNE), Cameco Corporation (NYSE:CCJ), KBR Incorporated (NYSE:KBR), Global Investment House (KUW:GLOBAL), Jordan Phosphate Mines Company (AFM:JOPH), Arab Potash Company (AFM:APOT), Southern Company (NYSE:SO), McDermott International Incorporated (NYSE:MDR), and Toshiba Corporation (OTC:TOSBF).
Companies featured in this segment: Southern Company (NYSE:SO), Teck Cominco Limited (TSX:TCK.B), Daimler AG (NYSE:DAI), General Motors Corporation (NYSE:GM), Ford Motor Company (NYSE:F), Flint Energy Services Limited (TSX:FES), Anglo American plc (NASDAQ:AAUK), Synthesis Energy Systems Incorporated (NASDAQ:SYMX), CONSOL Energy Incorporated (NYSE:CNX), The Shaw Group Incorporated (NYSE:SGR)
Companies featured in this segment: Rio Tinto (NYSE:RTP), BHP Billiton (NYSE:BHP), Sumitomo Chemical Company Limited (TYO:4005), Toyo Ink Manufacturing Company Limited (TYO:4634), Steel Authority of India (BOM:500113), Tata Steel (BOM:500470), Sunshine Gas Limited (ASX:SHG), FPL Group Incorporated (NYSE:FPL), Southern Company (NYSE:SO), Entergy Corporation (NYSE:ETR), Progress Energy Incorporated (NYSE:PGN), Edison International (NYSE:EIX), Petrobras (NYSE:PBR)
Companies featured in this segment: The Southern Company (NYSE:SO), Sysco Corporation (NYSE:SYY), Fluor Corporation (NYSE:FLR), Cemig (NYSE:CIG), Petrobras (NYSE:PBR)