How About Those Markets?

Almost every conversation I have with market insiders will have them throw me a phrase like  "in these tough markets" or "are these markets tough, or what?". Today I took the other side of the argument...

The Dow just hit a four year high. People who complain should stop investing in the gutter. There are too many junior companies out there. Some will come back and others won't. Pointing out the handful of drill results winners won't bring those losing companies back to life. 

I feel better already.

There are some bargains out there and precious metals are rocking and rolling so the TSX Venture casino will be gaining in popularity into the fall. Hopefully I'll be able to dust off this quote soon...

"Don't confuse brains with a bull market" - Humphrey B. Neil



Amazing Bakken Boom Photos from North Dakota

I ran across some great photos by Travis Dewitz. He went to Williston, North Dakota, the heart of the Bakken Oil Boom. He captures the pumpjacks, drilling rigs, big trucks, bulka bags of proppant, ATCO trailer camps (the Alberta Trailer Company has done pretty well for itself), rail cars etc. 

The Black Gold Rush - Bakken Formation Oil Boom

Click on the photo to see more. 

On Clint Eastwood's Speech

The people like their politicians slick so when Clint Eastwood decided to wing it at the Republican National Convention, the long knives came out. While his speech wasn't polished, it was real. The difference between working on a tightly controlled movie set and a live audience may have tripped him up, but in his words it was "mission accomplished."

Eastwood says his convention appearance was 'mission accomplished'


 

 

Did Samsung Win?

Lots of discusion about Apple's (AAPL) patent lawsuit agains Samsung. While a $1.05 billion award is nothing to sneeze at, keep in mind that Apple's market cap is $622 billion. 

Robert Scoble has an interesting take...

I think this is actually a sizable win for Samsung. Why? It only cost $1 billion to become the #2 most profitable mobile company. Remember how much Microsoft paid for Skype? $8 billion. So, for 1/8th of a Skype Samsung took RIM's place and kicked HTC's behind.

Samsung is a much healthier company than any of those BECAUSE it copied the iPhone.

Look no further than Research in Motion (RIMM) for the consequences of not stealing from the best. Steve Jobs said "We have always been shameless about stealing great ideas" and its worked out pretty well for Apple.

If Samsung is prohibited from selling its products then they are the obvious losers but usually patents can be licensed for a reasonable fee. 

Canada's Wi-Lan (WIN.TO) makes a good living licensing their patents and this is a quote from Andrew Parolin, their Senior Vice President, Licensing:

License fees are determined by many factors so there is rarely a “one-size-fits-all” rate or fee. One of the factors that applies in virtually every situation is that we want a royalty that compensates fairly for the essential IP but is not so unduly onerous that it would jeopardize a licensee’s business.

Apple's last CEO was a vindictive prick but it remains to be seen how the current regime will handle the situation. 

From what I've seen so far, it appears that the best approach is to build the best product first and then worry about the IP later. If the product sells, everybody should win.  

 

If You Want to Build a Mine, Do It in Quebec

Build your mine in Quebec. At least that is the conclusion of a recent FMC Law report (Mining Royalties in Quebec: Overview of an Analytical Framework", Focus on Mining, August 2012).

The conclusion of the analysis is that the current mining royalty regime based exclusively on profits is optimal for the Quebec economy in that it allows government to capture a large part of the economic rent when prices are high without burdening mining operations with added fixed costs throughout the mining cycles. 

One of the many things to consider while doing your due dilligence on a mining company is location (location, and location). 

Calgary Herald Business Section Irony

How did Jeff Rubin's photo get placed above an article about the possibility of a fracking moratorium being lifted in New York State?

Rubin's prediction of $200 oil may not come to light because of the global recession (his reason) OR the fact that technical professionals are slowly finding new sources of oil using techniques like fracking. Either way Steve Forbes and Jeff Rubin will be talking about economics on Thursday October 4th in Calgary for a good cause. Google it!

A Shareholder Fights Back... and Wins

Congratulations to Rahamin Amram who settled a lawsuit with Carbon Friendly Solutions. The company last traded at $0.12. Amram claimed that company president, Stan Lis, said the stock would hit $10. (Stockwatch)

There was a wave of carbon "ventures", to use a polite term, several years ago. I was pitched several times on a company that was planting trees in Africa. I had a low opinion of the merits of the project. I upped my retweets of Steve McIntyre and Anthony Watts after that. Shares peaked at $0.95 and now occasionally trade in the $0.08-$0.13 range. While this company has put together some innovative projects, most of their investors have been crushed.

The Grand Optimist

...is who I want to be.

I fear I'm dying from complications
Complications due to things that I've left undone
That all my debts will be left unpaid
Feel like a cripple without a cane
I'm like a jack of all trades
Who's a master of none

Then there's my father
He's always looking on the bright side
Saying things like "Son, life just ain't that hard."
He is the grand optimist
I am the world's poor pessimist
You give him burdensome times
And he will escape unscarred

I guess I take after my mother 

I used to be quite resilient
Gain no strength from counting the beads on a rosary 
Now the wound has begun to turn
Another lesson that has gone unlearned
But this is not a cry for pity or for sympathy

I guess I take after my mother

 

Having a scientific education means I have many practical friends that can tell me exactly why something won't work. I also know the best part of me is my inner optimist. My world is full of abundance and possibilities. Shit happens to all of us but in aggregate, the world is becoming  a better place. I'm going to keep looking on the bright side. 

 

How to Become a Pop-Expert - a Guide to the Guru Business

Peter Shawn Taylor's essay in Canadian Business, Peak Delusion, does a fantastic job of guru deconstruction. Unfortunate for Jeff Rubin who has his photo is marked up with the word "wrong" 12 times. Hell, I'm wrong 12 times a week, but this is not about me. Rubin is no stranger to negative press (Dan Gardner: Jeff Rubin is a guru you shouldn’t listen to) which is interesting given Canada's image of being "nice".

Taylor provides the template that most pop-experts follow. 

Since the Oracle at Delphi, humans have looked to soothsayers to point the way. While ancient Greek prognosticators were famous for their cryptic suggestions, readers today expect (and are willing to pay for) a substantially clearer message. A certain formula has evolved: Take an expert with established credibility. Reduce the fate of the world to a single, simple concept. Create a suitably grim future to attract plenty of media attention. Then, if possible, add a glimmer of salvation, if only to keep readers' spirits up enough to buy your next book.

He goes on to mention David Foot (demographics), Thomas Homer-Dixon (water wars), Don Tapscott (technology), and Richard Florida (urban geography) as examples of pop-experts.

Taylor's essay echoes some of the key points in Dan Gardner's Future Babble: Why Expert Predictions Are Next to Worthless, And You Can Do Better. Gardner divides gurus into two classes, foxes and hedgehogs. Ronald Bailey's It's Hard to Make Predictions, Especially About the Future article describes their differences as follows:

Foxes are intellectual omnivores obtaining disparate information where they can. Hedgehogs in contrast fit all information into one central grand scheme that explains the operation of the world.

If you want to be a successful expert, follow Gardner's advice and Be simple, clear, and confident. Be extreme. Be a good storyteller. Think and talk like a hedgehog. 

Hedgehog gurus like Jeff Rubin are often very wrong but they survive and thrive by providing us simplicity and certainty in an uncertain world. They are simply giving the people what they want.  

Fox gurus like Donald Tapscott provide us with less certainty and more reality. They modify their narratives as new information becomes available, instead of emitting "squid-ink clouds of obfuscation." Tapscott's words sum up the ever changing world that foxes inhabit "I think the future is not something to be predicted, it's something to be achieved." 

 

 

 

Fracking Contaminates Groundwater?

The main reason for an anti-fracking movement from my understanding is that fracking contaminates groundwater. Nevermind that there are NO documented examples in Alberta. The few examples presented in the media are most often lacking in context. People were lighting  tap water on fire before fracking started - I'll get to the CSI style isotopic proof in another post. 

Back to groundwater contamination...

Raw sewage being pumped onto reserve near Calgary
The Elbow River, a source of Calgary's drinking water, sits roughly 500 metres from the site

Sauk Village Stuck With Bottled Water Due To Contamination

Groundwater protection is important but I can't help but wonder if the anti-frack movement is being funded by investors like Al Gore's hedge fund - because if the issue is about groundwater contamination, the facts are pretty clear. Fracking isn't the problem.