Dollars have friends and family and love parties. You can party-plan right? Invite tens of thousands. How hard is that? Dollar parties everyday now–just for you, and us, maybe a couple other peoople.
“Get out. Get noticed. Meet some exciting new dollars.”–StockJaw, the same people who told you on July 11th that AMZN was a buy under $950.00. It topped $1300.00 yesterday. That’s a 36.8% move.
“It’s incredible really.” StockJaw’s accountant points at the screen.
“Amazon is far from normal,” I squint. “Make’s you wonder.”
Well yes, listening to 3M’s conference call makes us wonder also. We listened. We marveled. CEO Inge G. Thulin and 3M changed everything, and nothing at all.
What did 3M change? President, CEO, and Chairman of the Board, Inge Thulin answers the actual questions asked. Let me restate. Question upon question, Inge Thulin answers the question asked, clearly, and often adding clear context. Speaking of their automotive business in Chine Thulin points out that 3M is growing revenue there consistently above the car build rate. If you want perspective, you’ve got it.
Every industry must come to the chemists; the auto manufacturers; Titanium dioxide/pigments, paints, coatings–metal/glass/plastic, plastics–rigid/ flexible, foam rubbers–seats/window seals/interior, rubber–tires, adhesives–everywhere, and many of the building blocks of said, and more.
Inge Thulin and 3M give the absolute best conference call in the corporate zone. It’s galactically good. Clear, direct, and perspective building. They answer everything. AMZN dodges all the time.
For three days we had been nose-down on the chemical complex. Forward we plowed over conference call after conference call. And why chemicals? Of course it’s our Huntsman call options with mere moments to contract expiration. And what is StockJaw about to do?
We’ve all seen it–the industrials busting a move. Chemicals have been working, and Huntsman’s roared. StockJaw’s ready to open our position, and it pulls back. That’s how it goes. We’re still well in the money. We will exercise the contracts, thus buying the shares.
Stock research creates winners. The investing we all do is done by crashing the calls, grappling with the metrics, clarifying charts, and then thinking about it as a whole. This research is our friend. It is our way to win.
Our investigation into the wider chemical industry proved eye-opening. Huntsman’s largest segment is polyurethanes. Competition comes from MOS, FMC, OLN. Out digging led us to McKinsey&Company, a fabulous online chemical industry publication. Own any chemicals? Don’t just read from the outside. Read the industry from the inside.
McKinsey is a terrific source for both sweeping and granular takes on the chemical industry. What jolting little pills did the site spread before us? How about the fact that diversified chemical companies struggle to compete with more focused models like commodity and specialty chemical players. Huntsman self-defines as “differentiated.” That means specialty. That group is however precisely the business model the article addresses.
Try this sweeping picture of the future;
“Chemicals 2025: Will the industry be dancing to a very different tune?”
The specialty chemical industry seems poised for a tougher time. Why?
1. Over the last decade the global petrochemical industry has grown by 3.6% annually. Within the industry “capacity creep” grows supply by 1-2%. Together they create margin pressure.
2. Chinese chemical consumption is slowing, as the economy matures into one more based on services and replacement/up-grade sales.
3. Increasing competition. Over the last ten years the industry has concentrated within more downstream markets. Secondly, Chinese companies are increasingly entering the global market.
4. Specialty chemicals has failed to produce any true “blockbuster” chemicals over the same ten years–with the exception of crop protection.
5. India, now the fastest growing massive economy in the world has no real customer base for pricey specialty products, including specialty chemical “applications,” or differentiated products.
The petrochemical industry hasn’t produced any “blockbuster” chemical for years, outside a dab in crop protection.
Building perspective comes from digging a bit deeper, looking a bit longer. Read and never return to that same smaller spot you just left.
Good research creates winners. Good research should take you to new places, both in your perspective and your sources. If you don’t end up some place you’ve never been, you’re not researching. That’s pretending. But then, even pretending can be a place to begin.
Look for some of those less traveled roads in your research. Think industry websites and online publications. We searched “large polyurethane wholesalers” and our new adventure began.
Now the GOP game show tax policy rewrite wraps our land as law. Enjoy the new-tax smell while it lasts. But do not hold your breath for a raise. That was all “trickle-down” micturation.
And now that the circus is over everything left is very real. But what do people expect? What do we believe about tax cuts? Following the grotesque MoneyGames Washington continues to call “reform” real adults sort out the results.
Savor more reforming fun and tax-cut madness.
Say What You Want. But the Math Says “1 for you, 10 for Corporate America.”
Meanwhile, let’s take a peek at what Charles Schwab’s Chief Investment Advisor Liz Ann Sonders and crew have to offer on people. the “cuts,” and what’s coming’ next:
“…according to a survey done in late December by Strategas Research Partners, at least 95% of Americans will see larger paychecks as a result of the tax change. Interestingly though, “most” think that their taxes are going up or staying the same; so those folks will be in for a nice surprise come February, when paychecks are adjusted, which could lead to an increase in consumption “Schwab Market Perspective; Party Like It’s 2017.”(JANUARY 12, 2018.)
A plastic cup and a poster should get you going–oops, plastic, paper? That’s right. Chemicals. Think Post-iis. Guess who? 3M.
Paychecks will grow. Real changes are coming. The cynical shell game the GOP calls reform further eroded public trust. But then no wink of sleep was lost. Speed and secrecy work when hood-winking the actual tax-paying public.
“Do you run?” “Never with empty hands.”–HST
“This is a sweet deal–I assure you. But it’s only good for a short while. A very short while. Oops, gotta go.”
Thanks for reading. Keep looking.
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Investopedia.com. Seriously Wonderful. Fact.
Charles Schwab. In Our Opinion, the best broker going.
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