Ceres (TSX:CRP) is in Play

Ceres Global Ag Corp (TSX:CRP) is in the news because New York hedge fund, VN Capital is unhappy with the fee arrangement between Ceres and a management group from Front Street Capital. VN Capital owns ~7% Ceres and their belief is that Ceres is trading below breakup value because of an outdated "2 and 20"fee structure.

Ceres was a pick of mine several years ago as a way to play the agriculture sector. Initially they were trading on the abilities of Front Street Capital's braintrust to plough money into agriculture related investments. 

Investing in big picture themes, like agriculture, it can lead to outsized gains. It helps to have strong fundamentals but if enough fund managers raise enough capital, a sector can become overheated. There are only so many real small/mid cap businesses to invest in. Multiples expand and everybody makes money...sometimes.

Ceres Global Ag Corp. long term chart

Ceres was set up with a typical "2 and 20" hedge fund compensation/incentive system for management. Management is paid 2% of the asset value annually and 20% of any gains or outperformance compared to a relevant benchmark. Unfortunately for Ceres' investors the company launched just before the 2008 crash and was never able to completely recover.  Management abandoned the fund model and decided to purchase Riverland Ag in 2010.  More recently, they have announced construction of a logistics hub in Saskatchewan (for trains of grain and Bakken oil). Ceres never made money for its initial investors so there have been no incentive fees paid to management. However, they've been collecting their 2% of Net Asset Value fees even after the acquisition of an operating company.

VN Capital Management is making waves. Here is an excerpt from their latest salvo...

The management agreement structurally misaligns Front Street’s financial interests from those of Ceres’ shareholders.  To illustrate, since the company’s inception, Front Street has collected $15.4 million of fees plus $2.3 million of additional expenses which has more than offset any losses on Front Street’s equity stake in Ceres while the non-Front Street shareholders have lost a collective $58 million.

You can read the entire release here. 

Ceres has a market cap of of ~$100 million and it has been higher in the past so that 2% fee certainly adds up over the years. One key question is, are the guys at Front Street earning their keep? Had they done nothing would shareholders be better off?  On the surface, it sounds like VN Capital may have a valid grievance.

PAGG - Global Agriculture Portfolio Profile long term chart.

The Index is designed to measure the overall performance of globally traded securities of the largest and most liquid companies involved in agriculture and farming-related activities. 

Ceres shareholders would have been better off holding an agriculture related ETF. 

The very important wrinkle in this corporate battle is that Front Street management is a significant shareholder of Ceres Global Ag Corp. On December 8th 2012 they announced a purchase of $9.4 million worth of shares. At that time they owned 3,093,091 common shares of Ceres (Ceres has just over 14 million shares outstanding). On March 18, 2013 Front Street principals announced that they owned or controlled   approximately 20% of the outstanding shares of Ceres. Less honourable management would have bailed as soon as their 20% incentive fee seemed out of reach. I've seen it happen.

Sometimes these hedge fund gambits work (Canadian Pacific Railway TSX:CP NYSE:CP) but other times they completely destroy shareholder value (Baja Mining - TSX:BAJ).   

I attended the Berkshire Hathaway AGM this year and one of my big learnings was how beneficial investment in long term businesses is to the economy compared to say, hoarding silver bars. It looks like Front Street is trying to create a business that will create jobs and make money for shareholders over the longer term.

I also learned that Warren Buffet pays himself $100,00/year.

Ackman's Canadian Pacific Payday at Canadian's Expense?

Bill Ackman's Pershing Square Capital Management LP  just had a big win. Who lost?

Ackman ventured to the Great White North as an activist shareholder trying to shake up Canadian Pacific Railway Ltd. (TSE:CP, NYSE:CP). Just over a year ago, he won a boardroom proxy battle.  Shareholders voted in favour of 6 new board members. They sacked the Chairman and replaced him with a hand-picked successor, Hunter Harrison.

So far this was a typical business story. The brilliant strategy of Pershing was to lay off lots of CP employees. CP metrics didn't compare favourably with other railroads. The market bought the story and CP shares tripled since Pershing's initial investment.

Of course the fact that CP has to cross the Rocky Mountains and endure winter avalanches and spring floods wasn't in the metrics. A railway crossing the plains of Kansas would likely appear to be more efficient. 

On June 3, 2013 Pershing Square Capital announced that it was starting to sell off some of its postion in Canadian Pacific. 

Then the floods came to Calgary early in the morning of June 21st. The worst natural disaster in the city's history. The cherry on top of this prolonged state of emergency came 6 days later when 6 CP Rail cars became stranded on the one bridge that failed in the City of Calgary (images).

Calgary's beloved Mayor, Naheed Nenshi, asked the question on everyone's minds.

I'll be very blunt. I'll probably get in trouble for saying this. We've seen a lot of people lose their jobs at CP over the last year. How many bridge inspectors did they fire?

CP is swearing up and down that the bridge was inspected. What kind of inspections are required on a 100 year old bridge? They thought about sending a diver down to inspect the piers but of course the raging Bow River made that unsafe. They didn't mention taking any elevation readings on the bridge. They didn't mention checking tiltmeter data (better technology can eliminate jobs, but it can also increase safety.) CP doesn't mention the use of any technology apart from a "visual inspection" of the rails.

Fortunately disaster was avoided this time and the railcars were removed safely but close calls and derailments are not news to anyone following Hunter Harrison's "track record". Read Are derailments the cost of CP Rail’s efficiency drive? if you are curious.

Back to Ackman, he's been described as just pompous and arrogant and seems to have been born without the gene that perceives and measures risk in a recent Vanity Fair article. 

To summarize, CP is being gutted, public safety is at risk, and Ackman is selling his shares. Well played Mr. Ackman. No white hat for you.  

Get Lucky Remix

Daft Punk has put out a classic album that is meant to be listened to in its entirety. However, the title track Get Lucky is getting most of the attention. If you're sick of it try the remix!

Daft Punk didn't act alone. They handpicked some of the best and brightest writers, singers, and musicians to collaborate with.  Check out The Collaborators to find out who they are.

The Big One - Calgary Flooding

It has been an eventful 24 hours with evacuations being ordered in Calgary at 3:00PM yesterday. They weren't kidding. Most everyone has family or friends affected by the high water. Fortunately things like electricity, natural gas, and water services are still functioning in the drier parts of Calgary.     

Here is another shot taken a few minutes ago above #Calgary #yyc #CalgaryFlood pic.twitter.com/Jv4SOG3vLB

— Justin Havre (@JustinHavre) June 21, 2013

Bottled water for those who don't trust the abilities of City of Calgary engineers.

bigpictureguy's photo on Instagram

There was a limit of 5 cases of water (or 120 710 ml bottles) per person at Costco. How much does 85,200 ml of fresh water weigh? 

Gold and Gravity - Update

Gold is heavy but I was kind of expecting some kind of lift for the yellow metal. See Gold and Gravity. The next hope for gold bugs is a fast close above $1350 creating an island reversal. Until then, the trend is your friend.

Tick Tick Boom suport failure in gold.

How to Evaluate a Junior Mining Stock

The IKN blog   has developed a thoughtful system for evaluating junior mining stocks. A bottom is forming but as to how long that process will take is beyond my predictive abilities. 

Oh I used to be disgusted, but now I try to be amused. 

Elvis Costello

Hold or sell your junior: A guide

Likes the quote "Better to operate with detachment, then; better to have a way but infuse it with a little humor; ... http://t.co/pGHBBoCtHw

— Jim Letourneau (@JimLetourneau) June 20, 2013

Doomsday Investing Update - Junior Gold Miners ETF

What if the fiscal apocalypse was just a bad dream?  In a perfect storm, the gold price would be rising, senior producers would be announcing massive expansion plans, and the Junior Gold Miners ETF would be skyrocketing. Perfect storms are rare and difficult to predict. 

I get the financial stress argument but it hasn't been working for 3 years running. I think there'll be a few seats available on the gold train IF one leaves the station on the up track. For now, the best one could hope for would be a quick bounce back up to $10.50 creating an island reversal on the chart. If that doesn't happen in the next few days then there's nothing to do but wait and worry some more about when the global financial system will collapse.

Market Vectors Junior Gold Miners 1 Year Chart. The three year chart looks bad as well but investors can only claim losses one year at a time.

Likes the quote: "I am an old man and have known a great many troubles, but most of them have never happened." http://t.co/70BgOGZbws

— Jim Letourneau (@JimLetourneau) June 20, 2013

More Bear Market Mining News

Read the PWC report - Mine: A confidence crisis

The big boys are reducing costs and attempting to become more efficient. Exploration can wait.

Strangulation by Regulation

The TSX Venture has been crushed. Since venture companies are designed to spend money, they don't offer much upside for investors when risk capital dries up. Everybody is happy when markets go up and structural problems are often ignored.

My friend, Joe Martin, has been championing the cause of junior miners for a long time. While corrections are a normal part of market activity, there are some structural changes that are hampering TSX listed companies. Now is a good time to step back and look at what works and what does not.  

The owner of the TSX Venture Exchange, The TMX Group, had been doing fine during the TSX Venture collapse. That appears unlikely to continue. 

Read Joe Martin's open letter of June 12, 2013 below if you care about having a public Canadian venture market. 

June 12, 2013

An Open Letter to the Canadian Mining and Mineral Exploration Industries from Joe Martin, Chairman – Cambridge House International Inc.

Can the Junior Companies listed on Canadian exchanges survive this “Double Whammy?”

Venture companies listed on the Toronto Venture Exchange are facing a “Double Whammy”, something that the industry has never faced before.

1.       Current market conditions have made it almost impossible to raise capital.

2.       Regulations being imposed on raising venture capital in Canada may well make it impossible for any venture company to survive, even if, or when the taps for capital turn on.

Cambridge House is asking everyone in the business to join in supporting the Venture Company Association at the upcoming founding meeting:

Date: Tuesday June 18, 2013
Time: 2:00 – 4:00 PM
Location: Four Seasons Hotel Vancouver
Click Here To Register

Markets go up and markets go down but this “Double Whammy” may well bring about the death of the great historical tradition Canada has achieved in becoming the number one nation in the world in finding mineable ore bodies and bringing them into production in countries around the world.

At this meeting you will learn that this is not a question of changing one rule, or several rules. It is a question of overhauling the entire system.

The system is broken and it must be fixed.

Venture capital, required as risk capital in speculative investing, is a fundamental requirement in starting, building, and growing companies.

Apple Inc., the world’s largest company, started with two people developing computers in a garage. Microsoft had the determination of Bill Gates who went out seeking venture capital. Many great companies bear the name of their founders; all creative and imaginative individuals who needed speculative venture capital. Henry Ford, like all of them, had to raise capital. Look at thousands of jobs people like this have created.

Canada’s Hemlo Gold mine, one of the great mines in the world, owes its startup because of the determination of Canadian investors to overcome hurdles and who stay the course to bring them to life. Canadian mineral exploration and mining companies are well known around the world for their ability to bring success to these high risk, high reward projects.

Venture companies create jobs. Large companies build until they forget how they started: Nortel; Palm Pilot; Woodward’s; Eaton’s; Kodak. It is up to venture companies to create new opportunities and new jobs. And that means venture capital for speculative investments.

The world will need commodities and prices will once again go up. But, when it does, our mining and exploration companies will wake up to the fact that Canadian regulators have killed their ability to survive.

Canadian public markets are controlled by banks that have lost sight of the necessity of venture capital in growing an economy. The banks now own TMX, the company that controls both the TSX and TSX-Venture. They simply have no concept of the importance of having a venture market in creating jobs and growing an economy.

As the resource industry continues to weather this storm, there have been an unprecedented number of regulations brought into play that may well kill all hopes of a recovery in mineral exploration and mining.

In this time period the order of precedence in raising capital for venture companies is to:

·         pay accountants and auditors

·         pay legal

·         pay listing fees

·         keep the office doors open

There are over 700 companies on the TSX Venture Exchange that do not have the capability of meeting the financial requirements to survive this year.

One reason we are in a period of regulatory overkill is that there are very few people involved in venture capital represented on any of the governing bodies. These regulatory bodies are mostly a collection of lawyers: people who take fees, and increase regulation to create more fees. They are individuals who may think they are doing the right thing but in reality are killing the industry.

The Governing Bodies:

·         The exchanges (The TSX and TSX.V are the two main exchanges but about 30% of their volume is done by other platforms that do not involve individual investors)

·         The 13 securities commissions governing Canadian provinces and territories

·         CSA – the Canadian Securities Association – the association of the 13 security commissions in Canada

·         IIROC – Investment Industry Regulatory Organization of Canada

·         Independent brokerage firms have very little representation with IIROC

A list of problems is long but they include:

·         Securities commissions that ineptly try to enforce their own regulations

·         Lack of transparency in trading stocks (the multiple trading platforms do not share information

·         Algorithmic trading – computer trading in milliseconds

·         Killer rules for brokers in “know your client – know your product” rules

·         Retail brokerage firms are being regulated to cemetery plots

·         Naked shorts

·         Multiple levels of costly repetitive compliance

·         fees, fees, fees

These killer problems have not been created by firms requiring venture capital 

They have been created by unregulated regulators

It is Strangulation by Regulation 

WITHOUT SIGNIFICANT CHANGE, WHAT DOES THE FUTURE HOLD?

·         Jobs by the thousands will be lost in Canada

·         Jobs by the thousands will be lost by people working on Canadian mining projects around the world

·         Geology schools across Canada will close

·         Accounting firm will have massive layoffs

·         Legal firms will have massive layoffs

·         Canadians account for about 60% of world-wide exploration. The country will lose this position and the thousands of jobs that have created it.

·         The Aussies and Chinese will take over Canada’s role in mineral exploration

·         Canada will hang its head in shame because a proud nation will have lost its job creation industries

DO NOT LET OUR INDUSTRY BE STRANGLED

JOIN THE COUNTER REGULATION REVOLUTION

JOIN THE VENTURE COMPANY ASSOCIATION

ATTEND THE FOUNDING MEETING IN VANCOUVER ON TUESDAY JUNE 18 AND SUPPORT VCA ONLINE AT http://venturecompanyassociation.com

The above facts are not fabricated. Information has been sourced from the following articles:

·         The Canadian Economy is Regulated to Death

·         Strangulation by Regulation – is the Venture Exchange on Its Deathbed?

·         The Impact of the TSX Venture on the Economy

·         Can the TSX Venture be Saved?

·         ‘Say goodbye to the public venture market’ Advisor warns Flaherty of disappearing TSX.V

·         Proof the Largest Canadian Banks are Taking Over

·         The Destruction of the Canadian Investor: Why the TSX Venture is Failing

·         NYSE Floor Trader Explains How Stocks Are Traded In Dark Pools vs. Lit Markets: Dark Pools Explained

·         The Shocking Truth About High Frequency Trading

Don Martin on Mike Duffy

There is little upside in being critical of a former colleague. Why make enemies? Don Martin didn't pull any punches when he recorded this segment of "The Last Word". Martin's comments aren't particularly shocking but the fact that he aired them publicly is pretty interesting. I guess the volunteer "Save Duffy" poster committee hasn't had time to meet yet.

Road Trip - Palm Springs to Calgary Days 2 and 3

Day 2

We’ve barely moved the map pin so far. We enjoy the free breakfast at the Best Western (you get what you pay for, but the oranges were a nice touch) and continue our journey north. We have to head inland to avoid the Langley Air Force Base and drive through some rolling hills. Then we see fields of vegetables and lots of workers picking them. If you ever think your job is hard…

We stop in San Luis Obispo and wonder if it rhymes with Nabisco (it doesn’t) and I use yelp to pick the highly rated downtown BBQ spot. We park beside a twin white Lexus SC-430 which makes for a cute photo.

As I gorge on my sauce laden BBQ tri-tip Howard informs me that he doesn’t eat much red meat. Howard grew up on a farm in Alberta and now he’s aligning himself with KD Lang. I vow to eat red meat for every meal for the rest of the trip. See you on the gurney buddy. This later proves impractical. It was probably the tri-tip affecting my thinking.

We decide to stop at the Hearst Castle Visitor Center. A full tour isn’t in the cards since we have to drive drive drive to at least San Francisco to day. I’m OK with not seeing the actual digs. I appreciate craftsmanship and nice views but I’ve never toured a palace, castle or cathedral that can compete with Mother Nature. I get confused by the Hearst worshipping dioramas that show a zebra and how awesome it is that they put a bunch of cows on the land. At any rate, you can’t take it with you. 

Soon we hit one of the highlights of the Pacific Coast Highway. Big Sur. A thin crenulated ribbon of asphalt stuck to massive coastal cliffs. Lots of construction projects trying to protect the highway from landslides. The views are stunning and the road is mercifully uncrowded. This section of the highway requires focus.

Our car is a Pebble Beach edition and soon we’re there. We don’t stop for a cute photo of the car by a sign or the golf course or the beach. We stop for gas. The sand dunes are stunning. Soon we’re travelling past fields of artichokes. I’ve played around with this spiky vegetable in the past but they were kind of pricy and more spike than like. I would change my tune if I lived in Santa Cruz where they sell 10 of them for a dollar. We don’t stop and buy 10 artichokes for a variety of practical reasons.

We need to get north of San Francisco today which isn't that far north in the great state of California. Suddenly we’re on a freeway and in California that often means going nowhere fast. Between a little fender bender and some kind of rush hour peripheral to Silicon Valley we get bogged down. Eventually we pop out onto a nice stretch of 2 lane that heads through Half Moon Bay. We stop at a local kite surfer beach. Even iPhone photos look pretty good. We are sneaking up on San Francisco.

The Gold Gate Bridge beckons and I take a couple of crappy iphone photos while driving on it. We decide to push past San Francisco. For a few minutes we are on a multi-lane interstate but once we turn off, there is a delightful stretch  of mint condition twisty black road. Unfortunately it is getting dark and the towns are getting smaller. We stop on Olema which is close to Point Reyes. It is dark and we don’t have many options that we are aware of for a room. We stop at an inn and ask if they have any rooms with 2 beds. Nope. We ask how much the rooms will cost and he seems evasive. We ask again and he says normally we charge $140 a night but since you’re here… Both of us assume that we’ll be paying some jacked up rate. Turns out we are wrong. We get a bit of a deal on an apartment above the local deli. We also catch the local restaurant before it closes. I forget my red meat vow and attack the local oyster supply. Our server tells us that there are two kinds, both local. I have oysters as an appetizer, mussels and clams for dinner and oysters for desert. I will never be an oyster connoisseur but the shells of one kind were a bit smaller than the other.

Day 3

We are still in California which is pretty far from Alberta. Had we taken the interstate we’d be home already. However, the early morning sun and nearly abandoned road make for spectacular views. It is hard to believe that we are so close to San Francisco. We have an amazing breakfast in the Café Aquatica. No red meat here either but some very nice poached eggs and a view that was stunning. I’m reminded of the coast of Scotland. We drive through Bodega Bay which is a town mentioned in Cracker’s I Need Better Friends.

Signs imploring drivers to slow down at the outskirts of every town and village do not encumber this stretch of the highway. My driving strategy is to let the local Toyota 4 Runner pass the fancy-ass sports car and then follow behind.

The coast is stunning but soon we head upward and inland through towering redwoods. The canopy almost completely covers the highway. We are getting close to the end but what looks like a half hour drive by distance on the map will take 3 times as long. We see logging trucks on this twisty turny road. There are truck drivers and then there are Pacific Coast Highway truck drivers. Wow! I try to imagine driving this road during the summer tourist season. I think it would suck.

We eventually hit the 101 near Leggett and the end of the Pacific Coast Highway. I almost feel like crying. We did it. Howard celebrates by taking a leak on the other side of the highway. Then we drive through a giant redwood tree.

Unbelievable

All we need to down is drive to Calgary.

Road Trip - Palm Springs to Calgary Day 1

I've been on a few awesome journeys this year, but I was pretty excited about driving from Palm Springs to Calgary with my buddy Howard. ​

Tuesday, May 7th

12:08P - Leave the Sterling Estates compound to pick up Howard from the airport. I forget to pick up my putter head cover from the Mission Hills Gary Player shop. My quest to break 100 is on hiatus this week.

12:25PM - Arrive at airport. Arrive at airport EARLY. I did not see any planes land on my drive there. Howard isn’t even on the ground yet. I’m very OK with being late unless I’m excited. Today I am stoked. Today is big.

1:08PM - I call Julia and suggest Trio up the street. Its only a block away, I lie and say Howard and I were waiting in the car and just got out to check. We both know I’m busted. Howard is recently single, and a retired divorce lawyer isn’t a bad contact to have when you’re looking for a mature life partner. However this means Howard will be interrogated over lunch. I’m a fast eater and Howard is a slow eater. He’s even slower when he’s under Julia’s microscope. Suddenly time stands still, there is no urgency, I must wait. I must.

I want I want I want to get on the road. We need to drive the entire Pacific Coast Highway Route 1 so maybe this chit chat can wait? Not this time. Its a 2 hour lunch.

2:54 - Could it be? Yesss. Driving. Dana Point to Leggett. The. Entire. Highway. Many will claim to have driven it. We are driving ALL of it. Every fucking inch (except when we exit an overlapping Interstate section and need to take an exit and entrance ramp).

Once we hit the coast, all we need to do is pick the paved road closest to the coast but getting to Dana Point requires a few deft exits and toll roads. The GPS in cars blows. I want to use Google Maps. I want real time traffic factored into my route decision making process. The reflective screen I added to my phone last Christmas Eve makes it impossible to read the screen while wearing sun glasses. I will not remove this screen until I park the car in front of our house in Calgary four days later. Turns out that having kids in the car is more distracting than texting and driving. My glancing down at my iPhone while driving is wrong, especially when I have to remove my prescription sunglasses to read it.

I am willing this drive to be complete. I know it is frivolous. It is a giant time suck. It is inefficient. A car can be driven from Palm Springs to Calgary in 24 hours more or less. I can’t even get an estimate of how long our Pacific Coast Highway trip will take from Google Maps. My laptop screen real estate is too small to drag all the blue dots off of the Interstates.

Ever since Brian F. introduced me to the Beach Boys in grade 4, I’ve had a thing for Southern California. Today we are in it. The mysterious places mentioned in Surfin’ USA are showing up on the road signs!

Beaches. Laguna, Newport, Huntington, Long etc. etc. Giant oil fields were discovered along this stretch of highway. Signal Hill! Pumpjacks. The old photos of Huntington Beach (aka Surf City USA) look much different than the pretty beaches and marshlands of today. We hit traffic. Mostly a consequence of my choice to drive south to Dana Point instead of starting in Santa Monica. I will forever be asking people if they started PCH 1 at Dana Point. I’m not sure if 3 hours of heavy traffic is worth being able to forever ask people if they started PCH 1 at Dana Point.

​Howard and I have noticed that in sunny California, the car pool lane is never busy. Also a high percentage (but not all) of Prius drivers near LA drive aggressively. Maybe the lack of power frustrates the driver. Just a theory. ​

As fortune would have it my Rolling Stone Top 50 Albums of 2012 playlist calls up Sweet Life.

Why see the world, when you've got the beach? - Frank Orange.

This tune comes up later on the trip and it makes sense. To be fair, people from California travel internationally more than most Americans.​

Why would you live anywhere else?

Why would you live anywhere else?

We've got the ocean, got the babes

Got the sun, we've got the waves

This is the only place for me

Best Coast

7:36 - Malibu. Soon to be owned by Larry Ellison. The real estate is precious. Malibu is a choke point on the highway. There isn't much real estate available between the landslide zone and the coastal erosion zone. The Malibu preachy actors tend to be coastal erosion deniers. There isn’t room for a beach, a row of beach houses, and two lanes of highway never mind four. Something has to give. My bladder. We gas up in Malibu and drive the scenic curves while watching the sunset. 

We stop in Oxnard?

8:31 - Best Western. Clean, safe, cheap and open. Day one’s driving is done.

8:50 - Cabo Seafood Grill and Cantina. Howard ate local style and had a Strawberry Margarita at dinner. I didn't know that Oxnard was famous for strawberries so I feel guilty for mocking his "girlie drink". ​Not much going on in the section of town we were at but I think we saw a crack whore standing on the corner. You don’t often see legs skinnier than Steven Tylers.

Exciting News From Shoal Point Energy

There are big happenings at Shoal Point Energy. The original team that identified the massive opportunity and captured the acreage (no easy feat) ​is stepping aside. Marc Jarvis will be replacing George Langdon as CEO. Jarvis' claim to fame is his association with Ultra Petroleum, a rags to riches natural gas deal that changed a few people's postal codes.

The chart on the left from BigCharts.com shows the meteoric rise of Ultra Petroleum. This is what investors in leading edge resource plays are looking for.

The "forward looking statements", mostly references to what the Government of Newfoundland and Labrador might or might not do in the future, were clarified in a second press release. 

Shoal Point Provides Operational Update and Announces Proposed Changes to Management and Board of Directors...

Shoal Point Energy Issues Clarification of Earlier News Release by James Letourneau

​Shoal Point Energy is an advertiser and I own shares purchased in the open market.

Gold and Gravity

I've been watching the gold price on a daily basis. Partly out of curiosity and partly to look for an opportunity. The short term trend looks down but the big picture?

​The trend is your friend, until the end when it bends.

Road Trip

I’m a the stylish Palm Springs International Airport waiting for the arrival of my road trip buddy, Howard. Our mission is drive a white Lexus LC 340 (Pebble Beach Edition) from Palm Springs to Calgary before Saturday afternoon.

I just heard the announcement! He’s arrived. Our first order of business is to have lunch with my wife, Julia in downtown Palm Springs. She will be grilling him on his new girlfriend.

I’ve chosen an extremely inefficient route to get to Calgary. I want to drive the entire Pacific Coast Highway 1. Not just a few stretches. Why? Because it is there and I’m not going to hold a rope like a daycare kid walking on a downtown field trip while I wait my turn to summit Everest.  This means driving to Dana Point where our little highway intersects a more efficient Interstate.

The WIFI appears to be down at this quaint little airport. I still love it but now I’m writing a Word document instead of live blogging. Word!

Why Don't Golf Carts Fly?

My interest in golf carts started at an early age. I still remember the photo of Bob Hope's nosed out golf cart in My Weekly Reader when I was a young laddy. Now I spend a good part of the winter months near Ground Zero for golf cart customization. It turns out that Bob Hope wasn't the only person who wanted a customized cart. The lowly generic golf cart gets the glam treatment every summer during the Palm Desert Golf Cart parade. People like pimped out golf carts. 

Maybe this summer there'll be a Bubba Hover in the parade. 

This video wasn't intended to sell hovercraft ​golf carts, it was intended to help market Bubba Watson and Oakley as hip and edgy. Turns out the concept is too good to completely dismiss.

I can attest to the desire of at least some golfers to stand out from the crowd. Everything from Loudmouth pants, lime green golfballs to plushy club head covers can be seen out on the links. 

Meanwhile the brains at Neoterich Hovercraft have been getting orders!​ Since the commercial, they have announced a limited edition of 100 carts.

Two Keystone Hurdles

1) Nebraska's unemployment rate is 3.8% Houses are affordable. Why create messy boom town conditions in the state?

2) The USA is convinced that shale oil is going to put them on a path to oil self sufficiency.

This makes the tenuous arguments about evil oil sands. Why risk alienating voters? ​

U.S. On Its Way To Becoming World�s Largest Oil Producer infographic

@warrenbuffet Takes on Twitter

If Twitter followers were dollars Warren Buffet would be having a big day. ​

Buffett ‘In the House’ Gets 50,000 Followers on Twitter

He's pushing 100,000 followers as of 11:21 PST so his numbers are ramping. I think Twitter followers are worth more than Bitcoins. 

So far his only tweet has been ​

Warren is in the house.

— Warren Buffett (@WarrenBuffett) May 2, 2013

​There are numerous unofficial Warren Buffett Twitter accounts but @WarrenBuffet is verified. I'm not sure if Buffett would use a term like "in the house" so we'll see shortly the account is the real deal. 

Off to See the Oracle

The Oracle of Omaha, Warren Buffet, will be answering questions this Saturday at the Berkshire Hathaway Annual Shareholders Meeting. The highlight of this event at the CenturyLink Center will be the live unscripted QandA that runs from 9:30AM to 3:30PM. Warren and Charlie Munger don't pull any punches.   

There ​is not a cloud in the sky today in Rancho Mirage, CA but a trip of ever cascading delays could be in the cards.

​Weather is not climate and computer models of climate are not very good science.

Fracking's Fine in Western Newfoundland

Shoal Point Energy Ltd's (CNSX:SHP) partner in Western Newfoundland's massive Green Point shale play is doing a great job of community relations. Black Spruce Exploration CEO, David Murray, has been meeting extensively with local community leaders to prepare for the potential long term impacts (which are seen by the community as extremely positive).  

Black Spruce is looking to start drilling "mid-summer". This is an exciting play.