Monday, July 6, 2020

Notes From All Over -- The Harvard Edition -- Mid-Afternoon -- July 6, 2020

Harvard: $50K / year and all on-line. The good news: a computer only costs $1,000 and free wi-fi at Starbucks -- once they open again. LOL.

DAPL: to be drained. I assume pipes rust. In reply, from a reader:
The oil that has flowed through the pipeline has coated the interior surface of the steel. This pipeline, if left drained and closed, would last for several years before a rust action would occur. Also, see comments.
Analysis continues: Berkshire Hathaway, Dominion, Duke. Motley Fool here:
  • Dominion (D) becomes a much safer retirement holding per Motley Fool;
  • Dominion (and Duke) will quit dumping good money after bad money on a proposed $8 billion natural gas pipeline; always a good thing to quit losing money;
  • Dominion's balance sheet improves;
  • Dominion sees $3 billion in after-tax proceeds: will be used to re-purchase stock
  • D's market cap: $63 billion
  • D will reduce annual dividend to reflect new reality
  • payout will improve company's payout ration from 85% to 65%, more in line with industry leaders
  • dividend expected to drop from $3.76/share to $2.50 share
  • 2020 operating earnings will likely fall to $3.50 vs $4.50/share
  • D: drops almost 10% on news; now trading at $75
Analysis continues: "Warren Buffett's bet is a midstream buying signal. Berkshire Hathaway's long-awaited pandemic-era purchase in a seemingly difficult business might seem  like odd time, but there is good logic behind it -- WSJ, July 6, 2020, "Heard On The Street."

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D: wow, this is a tough one. I'm fully invested, and I do have some Dominion in the portfolio but would like more at this price. I have gone through the portfolio and there is absolutely nothing I would like to sell to raise cash for additional Dominion. What a perfect situation to be in. So, we'll see. 


  1. Pipeline corrosion by bacteria is a problem.
    To correct this problem a slug of chemical to kill the bacteria is put in between a couple of pipeline pigs.

    1. Thank you. I appreciate that. Yes, it makes sense that pipeline companies have ways of maintaining their pipelines.