Tuesday, May 20, 2008

Boone Pickens and Gary Kaminsky on Oil and Energy, Yahoo-Microsoft Update

Great Squawk Box this morning if you like oil and energy. We had the very watchable Boone Pickens offering his opinion that oil would make it to $150 a barrel by the end of the year, and would keep going up from there. He mentioned the possibility of $12-15 gasoline at some point. That will kill our economy, but also will accelerate the development of alternate fuels and vehicles. Question: do the refiners find a way to make money at $12 gas?

Boone has rarely been wrong the past 10 years. He also is pushing the heck out of wind energy which is a good reason to own GE, the biggest maker of wind generation equipment in North America, if not the world (I own a lot of GE stock and options). I wish there was a more direct play on wind energy, but there is not. This is a tough business. A friend of mine, who was CFO for a local wind energy company in Minneapolis, just quit because his little company cannot get any generators from suppliers like GE. They are all committed for the next 4-5 years to big players like Pickens.

Pickens mentioned Solar as part of our national energy solution. I don't know if he has a play there, but I do know that I am helping my employer, SICK, get positioned in that market. After a company meeting last week, it was decided I will be focusing more of my time on the Solar energy market. We are attending several solar equipment trade shows the rest of this year and I am working on brochures for applying our products to that industry and have a couple of sales proposals in the work to equipment suppliers. It is the new oil and will be big over the next 20-30 years. (I own a small stake in solar company ETF fund - TAN and will keep adding to it).

We also had Gary Kaminsky of Neuberger Berman funds on CNBC this morning. Gary's column in Forbes is what got me into PennWest in 2004. He was the first to recommend this way back then, and still does. He also has been promoting Suncor for just as long. I already knew about the Canadian oil sands having worked up there since 2000. But Gary has reinforced the message about oil sands and makes me want to own more (have Candian Oil Sands - COSWF, today, plus Daylight and PGH that have some oil sands exposure).

As for the Yahoo-Microsoft deal: what fun! I have stock and options in Microsoft and also options in Yahoo. Carl Icahn's involvement in a new board of directors for Yahoo is the catalyst needed to move Yahoo towards MSFT. (Boone Pickens agrees as he said he bought 10M Yahoo shares behind Icahn, though $240M is play money for T Boone). However, Steve Ballmer is not playing along with Carl and proposed last weekend an alternate plan to only buy part of Yahoo. Question: is this truly Ballmer's intention? or, is this a negotiating ploy to get the price for Yahoo down, as in: MSFT thinks part of Yahoo has value, and the rest is not worth what Yahoo shareholders think. It will be entertaining for sure.