Jeffrey McLarty

Yah…you know I keep getting more and more into the looming water problems for the world. Here is a July 3rd map of the droughts in the US.  Click it to see the entire thing

The monopolistic Bell & Telus, up in Canada, are going to start charging customers for incoming text messages. Not going to fly, unless Rogers does it too.

Look for yourself: http://tinyurl.com/5c5h7k

Learn & understand quality, not memorize & regurgitate quantity.

…this comes on the back of an 8 part video series with respect to the topic of miss-understood exponential growth, by the masses.

The series is presented by a prof, who lays out the simple arithmetic of the impossibility of infinite growth and then presents the corollaries and extrapolations with respect to demographics and energy.

It was nothing new to me, I’m sharing it with you, in case it’s new to you.

P2P file sharing still dominates bandwidth usage in North America, consuming 75% of the upload stream and 35.6% of the download stream. According to this short study/report on Trends in Broadband Traffic Demographics.

This study is done by a company, I own shares in, Sandvine. They are basically trying to help ISPs, prioritize packets and handle traffic on their networks, in the face of difficult bandwidth trends (Online video/media, P2P file sharing, etc.) The company’s revenue has been explosive quarter over quarter, with a stall in last two quarters. The stock chart is ugly, but I think it will be a great 10 year story. After buying this stock over a year ago, I went to my first annual share holder meeting, in May. I left the meeting more than doubling up my position.

They announce earnings early Tuesday A.M.

Long Sandvine.

Late last night, I sent my debt to equity ratio through the frigging roof, I bought a condo in the middle of Toronto. Had a blast doing it. Can’t wait to move in, Bayview & Sheppard if you know the area. I feel inflation is about to ramp up, so I’m not so worried about the debt.

Some of you might have noticed, on twitter, I’ve been pre-occupied from miss market. I’m back now guys.

More importantly, the only real estate agent you need to know in Toronto, is Julia Warren. She rocked. On my ride back to Waterloo, I estimated I’ve met and worked with somehow (counting even listing agents I’ve just met for 15 minutes) approximately 60-70 real-estate agents in 4 different countries, and she is so far, the best one. She worked really hard, was super informed, and most remarkably: she never left me with a hint of that feeling you get when you think an agent might be not actually working in your best interest. I’m stoked to know somebody in the GTA Real-Estate game that is so driven. Can’t wait to watch her trounce the competition and build up an empire.

Long Julia.

What does today’s market have to do with 3 mile Island? Oil.

I sat down with a top manager at Ontario Power Generation (the largest nuclear site in North America) late last night, a mechanical engineer and my girlfriend’s father. It is his opinion that the nuclear industry is a unique one, in the way that competition actually share intelligence and research, rather than attempt to leverage it over the competition. The reason is that, any accident looks bad on the entire industry. It is his opinion that without the problems at 3 mile island, the US would today, have ~70% of their power from nuclear. Instead, American’s have a sever case of NIMBY syndrome, and it stems from lack of education about the sector.

You can see where, uranium prices would be higher, oil would be cheaper, and the markets would not be selling off on oil climbing.

Nuclear is one of the only answers, technologically, because of the requirement for the base load. Sure, wind and solar can offset the need, but a sustainable base load, is a feat of engineering.

The picture show above, is 3 mile island.

Blows my mind, that a major market force, can, in this day and edge be summed up with “People are scared of what they do not understand”.

I have never met a blogger, who didn’t fall into the upper 1 percentile of most interesting and driven of people. For some reason they/we strive towards this surreal form of winning at whatever they/we do. I think, just because they/we want to.

First off line connection I ever made was with TJ Lynch, a real estate agent down on Roatan island. I picked him, because of his blog. I get down there, turns out the guy is just a complete pro, dominating his field, and a creative pioneer. Ever since then, I have made a point of going out of my way and/or jumping at the chance to touch base and connect with bloggers off line. Today’s meeting with Howard, and the one a few weeks ago with Dan, were both more supporting evidence for the thoughts outlined above. Both of them into money management, way too cool of guys, generous with information and guidance, driven, sharp, I could go on…but let’s just say…both gentlemen are seemingly at the top of their game.

Maybe the link (pardon the pun) is that the same type of people, all see the value of sharing information. That’s why, I’m long the flow.

I will continue to reach out to the community, because I think the ‘sphere brings out  some of the best of the best, who just want to dominate at whatever it is they do…

RIMM announces tomorrow.

It has become, a deal stock.  Everybody talks about it, everybody has traded it, everybody has a story about making huge bucks or losing some coin (mainly the shorts). 

See, same applies to GOOG.  Remember when GOOG announced, everybody had ZERO expectations, people were buying puts, and selling calls, scared it was going to tank…and then…and then…they blew away every-body’s guesses out of the water.  That’s all they are, guesses.  Look back at the twitter tape, there was only one bull in my twitter circle, who was long and proud.  Me.  Andy wrote a straddle, and got owned. See, you can look at the chart and see the pansies and bears sold all their shares or went short ahead of the CC.  That’s causality at work.

The market anticipated so much bad news, it priced it into the stock.  This happens, especially to deal stocks.  You know the ones, AAPL, GOOG, RIMM etc.

This is how you tell a deal stock, from not a deal stock:  Find an idiot, and ask them, if they know what a PE ratio is.  If they don’t know what a PE ratio is, you can use them as a test subject for your stock.  Ask them what the ticker is for company ABC.  If they know it, it’s a deal stock.  If they don’t, you guessed it, not a deal stock.

It’s also why, you don’t always have to chase smart money, you can chase dumb money too.  Deal stocks, they go up, higher and faster than anybody with a brain could anticipate. Because these are the only stocks idiots know about.  Idiots find out about them, and think, ‘maybe it’s going to keep going up…I better buy some’.  Self fulfilling prophecy.  So, there are more buyers for those stocks as opposed to the other, non deal stocks.

HEK is not a deal stock.  Will it one day be a deal stock, I hope so, but doubt it.  Because deal stock buyers, laugh in the face of multiplier expansion.

I am going to be off playing Tycoon in Toronto tomorrow…so I’m going to predict, my prediction.  Since RIM has become a deal stock, it’s going to go the opposite direction of the color it trades tomorrow.   If we see red ahead of the CC, look for springboard action in the AM, and get long at the end of the day.  If we see green, well, look out below.  Unless the chart looks like something leaked, don’t be stupid here.

I’m long either way, and I know I’ll do something dumb if I watch in real time.  I’m long, and I plan to hold right on through the worst of any possible sell off.  See, see right there, what I said, that’s me worrying.  A little light in your head should go off - that’s a bullish tell, that I’m worried about a sell off.  I don’t know anything anymore than the next guy does.

But I do know, markets are causal.  Fickle too.

Yes I am however, long a bunch of deal stocks…trying to quit…but they are just such quick fixes, you know?

Iiiiiiii’m a wierdo, I’m going to live blog, the reading of a book.  That’s right, I’m going to sit down, read a book from start to finish, reflect every other page and type when appropriate.  Question for my reader(s?) is, which one should I do?  If you don’t pick one, I’ll just…well…pick one myself, and do it whether you like it or not.

Joseph E. Stiglitz - Globalization & It’s Discontents

Joseph E. Stiglitz - Making Globalization Work

Alan Greenspan - Age of Turbulence: Adventures in a New World

Charlie Munger - Poor Charlie’s Almanack

Micheal Porter - Competitive Strategy: Techniques for analyzing Industries and Competitors

William Gross - Bill Gross on Investing

…it’ll be at least a week, because I didn’t pay extra for express shipping.  If you’re long AMZN, you can thank me later.

If you think I’m making up the problem of water scarcity, or you think it’s a problem for places far far away, or it’s just another hippy trend that isn’t real - talk to the developers in California who have piles of wood stacked up that they can’t turn into houses because the state won’t approve “will-serve” letters. In other words, the state can’t promise they will serve fresh water. Trust me, the state has no motive to stop economic growth like this.

Desalination is the process by which most of the world will likely turn to, as they need fresh water. Not too many investments open to the retail investor, yet. But eyes are open, and ideas are rampant.

I already own Hyflux. And I’ll likely buy a little ERII if I can get it for anywhere near $6 upon the ipo.

But thinking outside the box here, I’d like to own the names selling the membranes, and doing the chlorination & dechlorination, or pH neutralization. My favorite idea on how to invest in desal is buy the guys handelling/channeling the brine. The brine is the salt the facilities need to deal with. Usually it means dumping it back in the ocean, which, on a conservation of mass basis looks okay, but studies have shown clouds of shrimp dieing and discoloration of beaches. Of course, less unique, you could own the names selling oil-less pumps. That seems easy.

Check out this facility in Cypress:

Check out this bore in Australia:

It’s what’s used to drill horizontal holes for the brine. Link to Source.

Scott & Thiago both told me, independently, a while back about a company soon to IPO called Energy Recovery.

Less than 48 hours ago, they filed a bunch of paperwork with the SEC.

I’ve spent about 30 minutes looking at the numbers so far.  $8, the midpoint of their expected range, implies 57x 2007 ep, and Q1 ‘08 came in with lower eps than Q1 ‘07 by a penny.   Of course, sales were higher, and we are talking small cap here, to be priced between $250M and $500M, likely.

…is frigging cool

Search for words that are IN THE PICTURE…yah, like OCR recognition.  I see Flicker, Google, Microsoft, Facebook et al, snapping up this company soon!

http://www.truveo.com/Evernote-Image-Search-and-Capture-Demo-full/id/755121582 

Unless CCJ hits $55, or ENER hits $70, or CSIQ hits $45 (these are all >10% moves), and I take profits as planned on the July FSLR’s…all before tomorrow, and since I closed a 3 week trace on FCX…then I add 1.4% to my bottom line this month, or generated 5.7% on cash tied up…however you want to look at it.

All from shorting puts, for less than a month.

Which is why, I started http://FivePerFive.wordpress.com …read my logic on the ‘about page’.

And this doesn’t even include my buy-write retirement account where I was short puts to aquire RSX, and never got hit…or wrote out of the money $36’s holding HXU.to

booyah baby.

2nd biggest exporter in the world, is China. 2nd largest importer is Hong Kong.

The graph is per capita, the previous two facts are not.

Can you guess where there is opportunity is?

Source: China Water & Drinks Inc. 2007 Annual Report.

As oil rises, and urbanization trends continue, I’m thinking about what might happen.  Shipping rates go up - duh.  So, I think sales and margins will improve for concentrated solutions, where the competition selling finished products will be squeezed.

Eg. Canned frozen juice vs the 2L of ready to drink stuff.  If you have to ship 2L, you’ll pay more to ship a very comparable product.

…just thinking out loud…likely many have thought about this already…it just hit me today.