Comments on: The Real Reason Why ExxonMobil Profits Suck http://www.coyoteblog.com/coyote_blog/2008/08/the-real-reason.html Dispatches from a Small Business Sun, 12 Feb 2012 09:39:47 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Leonard Huff III http://www.coyoteblog.com/coyote_blog/2008/08/the-real-reason.html/comment-page-1#comment-13089 Leonard Huff III Sat, 09 Aug 2008 05:32:53 +0000 http://coyote-blog.com/wordpress/2008/08/the-real-reason.html#comment-13089 <p>Mr. Scott:</p> <p>The one thing that I learned as a Auditor in the Accounting Field was to always test People to get a reaction!</p> <p>It work this time!</p> <p>You did your homework!</p> <p>Have A Nice Day!</p> Mr. Scott:

The one thing that I learned as a Auditor in the Accounting Field was to always test People to get a reaction!

It work this time!

You did your homework!

Have A Nice Day!

]]> By: Scott http://www.coyoteblog.com/coyote_blog/2008/08/the-real-reason.html/comment-page-1#comment-13088 Scott Fri, 08 Aug 2008 18:32:38 +0000 http://coyote-blog.com/wordpress/2008/08/the-real-reason.html#comment-13088 <p>Mr. Huff, you had me all excited but your numbers are wrong. According to the XOM website, a $100,000 investment in XOM stock in 1983 would be worth $1,690,000 today, which is just under 12% per year appreciation.</p> Mr. Huff, you had me all excited but your numbers are wrong. According to the XOM website, a $100,000 investment in XOM stock in 1983 would be worth $1,690,000 today, which is just under 12% per year appreciation.

]]> By: Mesa Econoguy http://www.coyoteblog.com/coyote_blog/2008/08/the-real-reason.html/comment-page-1#comment-13087 Mesa Econoguy Fri, 08 Aug 2008 06:07:02 +0000 http://coyote-blog.com/wordpress/2008/08/the-real-reason.html#comment-13087 <p>Mr. Huff, you have odd typing skills, but you are absolutely dead-on correct there, sir…</p> Mr. Huff, you have odd typing skills, but you are absolutely dead-on correct there, sir…

]]> By: Leonard Huff III http://www.coyoteblog.com/coyote_blog/2008/08/the-real-reason.html/comment-page-1#comment-13086 Leonard Huff III Fri, 08 Aug 2008 05:27:15 +0000 http://coyote-blog.com/wordpress/2008/08/the-real-reason.html#comment-13086 <p>AS far as the comments of the Exxon 5 year plan, think of it as this.</p> <p>Venezuelazz , Chavez , Ect. Dicatort , South american + ===== you lose all of your investment in the project that you were sucker into 1995!</p> <p><br /> $500.000.000 million down the rat hole! = DRY HOLE!!!</p> <p>THINK ABOUT THAT!!!!!!!!!!!!!!!!!!!!!!!</p> AS far as the comments of the Exxon 5 year plan, think of it as this.

Venezuelazz , Chavez , Ect. Dicatort , South american + ===== you lose all of your investment in the project that you were sucker into 1995!

$500.000.000 million down the rat hole! = DRY HOLE!!!

THINK ABOUT THAT!!!!!!!!!!!!!!!!!!!!!!!

]]> By: Mesa Econoguy http://www.coyoteblog.com/coyote_blog/2008/08/the-real-reason.html/comment-page-1#comment-13085 Mesa Econoguy Fri, 08 Aug 2008 04:57:57 +0000 http://coyote-blog.com/wordpress/2008/08/the-real-reason.html#comment-13085 <p>Methinks, as you know, liberals assigning moral values to means of production <a href=" http://www.youtube.com/watch?v=GB8VZT_UsE8" rel="nofollow">is communism</a>.</p> Methinks, as you know, liberals assigning moral values to means of production http://www.youtube.com/watch?v=GB8VZT_UsE8” rel=”nofollow”>is communism.

]]> By: Leonard Huff III http://www.coyoteblog.com/coyote_blog/2008/08/the-real-reason.html/comment-page-1#comment-13084 Leonard Huff III Fri, 08 Aug 2008 03:06:51 +0000 http://coyote-blog.com/wordpress/2008/08/the-real-reason.html#comment-13084 <p>Re: Exxon Stock</p> <p>A broker make a recommended buy to me (accountant) in Midland, Texas in 1983! Buy Exxon Stock @ $30 per share then! Make dog & pony show to ex-mother in law , who I was working for at that time!</p> <p><br /> Exxon web site has a what if ! you would have brought $100.000 dollars of stock at that time!</p> <p>That stock would be worth at today price with dividend reinvestment @ + or - #3,000,000 (Three Million u.s. Dollars ). </p> <p>Not a bad payout for a $100.000 investment over that period of time.</p> <p>Wish I could have talked her into at the time!</p> <p>But, she was fighting the banks at the time over six drilling rigs that were worth $-0-.</p> <p>Moral of the Story! Timming is everything!</p> <p>Have a Nice Day!</p> Re: Exxon Stock

A broker make a recommended buy to me (accountant) in Midland, Texas in 1983! Buy Exxon Stock @ $30 per share then! Make dog & pony show to ex-mother in law , who I was working for at that time!

Exxon web site has a what if ! you would have brought $100.000 dollars of stock at that time!

That stock would be worth at today price with dividend reinvestment @ + or – #3,000,000 (Three Million u.s. Dollars ).

Not a bad payout for a $100.000 investment over that period of time.

Wish I could have talked her into at the time!

But, she was fighting the banks at the time over six drilling rigs that were worth $-0-.

Moral of the Story! Timming is everything!

Have a Nice Day!

]]> By: Methinks http://www.coyoteblog.com/coyote_blog/2008/08/the-real-reason.html/comment-page-1#comment-13083 Methinks Fri, 08 Aug 2008 02:52:14 +0000 http://coyote-blog.com/wordpress/2008/08/the-real-reason.html#comment-13083 <p>Mesa,</p> <p>You say things that make sense and the Yoshidads of the world hear "blah blah blah".</p> <p>You have to be either Warren Buffet or Bill Gates for them to listen to you and even then all they hear is "tax the 'rich'".</p> Mesa,

You say things that make sense and the Yoshidads of the world hear “blah blah blah”.

You have to be either Warren Buffet or Bill Gates for them to listen to you and even then all they hear is “tax the ‘rich’”.

]]> By: Mesa Econoguy http://www.coyoteblog.com/coyote_blog/2008/08/the-real-reason.html/comment-page-1#comment-13082 Mesa Econoguy Fri, 08 Aug 2008 02:48:27 +0000 http://coyote-blog.com/wordpress/2008/08/the-real-reason.html#comment-13082 <p><a href="http://www.taxfoundation.org/research/show/1175.html" rel="nofollow">US Corporate Taxes</a></p> US Corporate Taxes

]]> By: Mesa Econoguy http://www.coyoteblog.com/coyote_blog/2008/08/the-real-reason.html/comment-page-1#comment-13081 Mesa Econoguy Fri, 08 Aug 2008 00:05:58 +0000 http://coyote-blog.com/wordpress/2008/08/the-real-reason.html#comment-13081 <p>Okay, not to pile on, but let’s pile on. </p> <p><i>No, to deserve the big money, you have to produce something valued by society.<br /> Posted by: Yoshidad</i></p> <p>This is incredibly idiotic.</p> <p>Isn’t that precisely what XOM does? Produce oil? Oil seems to have a lot of value lately, so you can’t possibly be referring to oil companies now, can you Yoshalist?</p> <p>Oil has a productive value because it powers cars and engines and power generators and lots of stuff that moves or creates other stuff. Just because you don’t like something, because some left-wing nutjob AlGore-type told you so, doesn’t mean it doesn’t have value. Just because a lot of people use oil, and price fluctuations affect many different economic components doesn’t mean that producers of that particular commodity or good (or even service) can’t profit from it; in fact, they should profit a lot from it, particularly if it becomes scarce, and in this case many, many shareholders can profit from it.</p> <p>That’s what free exchange of goods & services in open economies is: exchange goods & services for money, which can then in turn be exchanged for other goods & services. Yoshalist’s ignorance of this tiny but critical fact belies his ignorance of practically all else economic. If you do not understand where value comes from, or who values what and who receives exchange for value, you’re completely lost and have no business even mentioning economics, much less claiming that large corporations are somehow evil.</p> <p>Just pathetic.<br /> </p> Okay, not to pile on, but let’s pile on.

No, to deserve the big money, you have to produce something valued by society.
Posted by: Yoshidad

This is incredibly idiotic.

Isn’t that precisely what XOM does? Produce oil? Oil seems to have a lot of value lately, so you can’t possibly be referring to oil companies now, can you Yoshalist?

Oil has a productive value because it powers cars and engines and power generators and lots of stuff that moves or creates other stuff. Just because you don’t like something, because some left-wing nutjob AlGore-type told you so, doesn’t mean it doesn’t have value. Just because a lot of people use oil, and price fluctuations affect many different economic components doesn’t mean that producers of that particular commodity or good (or even service) can’t profit from it; in fact, they should profit a lot from it, particularly if it becomes scarce, and in this case many, many shareholders can profit from it.

That’s what free exchange of goods & services in open economies is: exchange goods & services for money, which can then in turn be exchanged for other goods & services. Yoshalist’s ignorance of this tiny but critical fact belies his ignorance of practically all else economic. If you do not understand where value comes from, or who values what and who receives exchange for value, you’re completely lost and have no business even mentioning economics, much less claiming that large corporations are somehow evil.

Just pathetic.

]]> By: Scott http://www.coyoteblog.com/coyote_blog/2008/08/the-real-reason.html/comment-page-1#comment-13080 Scott Thu, 07 Aug 2008 15:22:32 +0000 http://coyote-blog.com/wordpress/2008/08/the-real-reason.html#comment-13080 <p>Yoshidad, let me clarify dividends and buybacks for you. First, a company earns pretax profit and pays 35% taxes on it, effectively on behalf of the companies owners (shareholders.) With the cash left over, they can do a few things: invest in the business (tax free), give cash to owners (dividends, taxed to owners at 15%), or buy stock from owners (if the owner sells the stock at a higher price than he bought, 15% tax also.) When one owner sells in a buyback, all the other owners then own proportionately more. For dividends, if Exxon earns $1 pretax and pays it out as a dividend, the shareholders pay first .35 cents at the corporate level and then .10 cents on the individual level, giving them net .55 cents and nothing to invest in. For reinvestment, after the .35 cents tax the remaining .65 is reinvested in the exxon business, which despite the whiners earned an average of 24% per year on equity in the last ten years. Very good, but they have limited new things to invest in. Buybacks economically are another way to reinvest in the business, as the business is buying itself, but it's paying 4x book value, so the expected return is 24/4, or 6%. This is the same return anyone investing in exxon at this price should expect. Crummy investment. They only do it so that the shareholders have a choice - if they all sell into the buyback, the effect is exactly like a dividend, but if they don't want the cash and would rather own more of the business they can do that. Since the holders selling really never have a tax basis equal to zero, the buyback is more tax efficient than a dividend, but the rates are exactly the same and the company and its owners are always taxed the least if they reinvest in the business, not the stock.</p> Yoshidad, let me clarify dividends and buybacks for you. First, a company earns pretax profit and pays 35% taxes on it, effectively on behalf of the companies owners (shareholders.) With the cash left over, they can do a few things: invest in the business (tax free), give cash to owners (dividends, taxed to owners at 15%), or buy stock from owners (if the owner sells the stock at a higher price than he bought, 15% tax also.) When one owner sells in a buyback, all the other owners then own proportionately more. For dividends, if Exxon earns $1 pretax and pays it out as a dividend, the shareholders pay first .35 cents at the corporate level and then .10 cents on the individual level, giving them net .55 cents and nothing to invest in. For reinvestment, after the .35 cents tax the remaining .65 is reinvested in the exxon business, which despite the whiners earned an average of 24% per year on equity in the last ten years. Very good, but they have limited new things to invest in. Buybacks economically are another way to reinvest in the business, as the business is buying itself, but it’s paying 4x book value, so the expected return is 24/4, or 6%. This is the same return anyone investing in exxon at this price should expect. Crummy investment. They only do it so that the shareholders have a choice – if they all sell into the buyback, the effect is exactly like a dividend, but if they don’t want the cash and would rather own more of the business they can do that. Since the holders selling really never have a tax basis equal to zero, the buyback is more tax efficient than a dividend, but the rates are exactly the same and the company and its owners are always taxed the least if they reinvest in the business, not the stock.

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