Visibility and Certainty

Every so often I get a flash of inspiration as to what make a good "Buffett Style" investment. Today my idea can be encapsulated as "Visibility and Certainty". Take the example of National Grid which yesterday pretty much (as far as an company would be able) announced its dividends for the next 4 years through to 2012. This comprises a 15% increase for the current year and 8% thereafter. Also yesterday Shell did a similar thing by declaring it's dividend for Q1 2008 at 40c or 11% up on Q4 2007.
In the case of Shell analysts fuss about near term production declines and high capex, seemingly ignoring record profits, buy backs over the past 3 years totalling $17bn, over 8% of market cap and a strong longer term portfolio leading, in time, to production growth. I listened in to the Shell media and analyst conferences and noted a couple of interesting points:
Shell CEO Jeroen van der Veer has now made public his thoughts on medium term energy supply and stated again that he sees "easy" oil production (i.e. excluding oil sands and very deep water) peaking around 2015. To compete with the NOC's the best strategy is therefore to position the company with assets that perform better at high oil prices and build expertise in complex operating techniques. Oil will become more expensive but this will create an unbrella for alternatives to become more economic. On 2008 JvdV noted that the US comprises about 20% of global oil demand and even if there is some reduction as a result of the economic stuation, growth in the Middle East and Far East make it very likely that global demand for oil products for 2008 will, in any event, exceed that of 2007.