RoR: Forum

Post 0

Saturday, August 30 - 2:16pm

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I have been wanting to post this for some time but because of this quote I decided it was time to do so.

A number of weeks ago this news article explained Mr. Pickens Plan for getting America off foreign oil. Whatever you think of alternative energies I have to hand it to Pickens for deciding to take matters into his own hands. It's men like him that actually get anything done. His thought is that if we can get enough windmills generating electricity it will free up natural gas for our cars. He is promoting his plan out of his own pocket and running adds to raise awareness. People can invest in his plan by dropping a few million.

Visit the Pickens Plan

Of course there are always going to be people who object but In the following week here is what one person says:

Commentary writes Bob Beckel and Cal Thomas sang the praises of T.Boone Pickens' plan to wean America from foreign oil and become energy independent, a move that I am all for...

However, both failed to point out that Pickens stands to reap a financial windfall if his plan is put into action.

His BP Capital, an energy hedge fund, is heavily invested in alternative energy. Pickens also has invested heavily in wind power, which he is advocating to replace natural gas to generate electricity.

And in an example of the rich getting richer, minimum investment in BP Capittal is 5$ million, so the average American can only buy into Pickens vision of the future metaphorically, because they sure can't buy into it financially.

While I applaud Pickens for wanting to bridge partisan divides and help America get over its addiction to oil, readers should know that Pickens - and his investors - stand to benefit from his Pickens Plan.

The news article says that Pickens has given out of pocket nearly 1/2 a million to Oklahoma State but this doesn't seem to phase him because what urks people like him is that THEY don't have the cash Pickens does and THEY wouldn't spend it like he does - besides THEY know how to use it better anyway and THEY would just give it away for no profit.

This small minded idiot is harpooning Pickens and his investors because they have the money to attempt to pull this off. But there is no guarantee that this enterprise will work. These moral heroic individuals are putting THEIR hard earned cash in jeopardy - they could lose it all.

The comment about the rich getting richer is what reminded me of this article and the need to post it. These people seem to think that "trickle down" means cash is going to fall from the hands of the wealthy to those who don't have it. In reality Pickens is a perfect example of trickle down in action. Everyone who ends up using the wind produced power or fills their tanks with natural gas will have Pickens to thank for it. While Pickens and his investors may end up with more money - if it works - they will also have more to create the next thing in energy independence.

Long live men like Pickens!

Post 1

Saturday, August 30 - 3:24pm

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I don't agree with the Pickens Plan when it calls for government subsidies or government "investment". Regardless, I believe his Pickens Plan is based on some sound ideas and admire him quite a bit. He has been a great entrepreneur. I read one of his autobiographical books. He was (I believe) one of the few corporate raiders in the 1980's who would not accept greenmail, which I regard as immoral. Greenmail is basically a scheme in which existing management buys the shares of a dissident shareholder (e.g., a raider) with a lot a shares at a price well above that offered to other shareholders. In effect, greenmail rips off the other shareholders to pay off the dissident shareholder. Entrenched management approves it to keep their jobs. Picken's raid of Gulf Oil led to the immense profit of all shareholders (not just Pickens). (Situations like Gulf Oil occurred because such companies were holding assets -- oil reserves -- at cost on their financial statements, whereas the market value of those assets were much higher. This was after the oil price shocks of the 1970's. ) Basically, Pickens was astute enough to recognize the difference between market value and book value.

Incidentally, the high minimum dollars required to invest in BP Capital (and many other "hedge" funds) is to avoid the hedge fund having to deal with the (expensive and time-consuming) disclosure requirements that apply when shares are offered to the general public. Also, the typical investor in a hedge fund is a big investor (e.g. a mutual fund, bank, insurance company, pension fund, or, nowadays, a sovereign fund) which allocates a fairly small fraction of its assets to a single hedge fund. $5 million is "chump change" to, say, CalPERS or the Harvard University's endowment fund.

I suspect that Harvard University's endowment fund "trickled down" to Barack Obama. :-)

(Edited by Merlin Jetton on 8/30, 3:27pm)

Post 2

Saturday, August 30 - 5:21pm

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The problem with Pickens's idea is that there is no grid feed-out for the power garnered by it should it be built - the lines cannot handle the extra, and new ones would have to be built, an additional large outputting before anything positive comes of it...

Picken's Plan