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Teck Cominco IR Presentation 2/27
This is an excellent presentation. Zinc is still going to be tight even with new production coming.
http://www.teckcominco.com/presentations/rv-bmo-feb07.pdf
Kipp
Teck Cominco IR Presentation
This is an excellent presentation. Zinc is still going to be tight even with new production coming.
http://www.teckcominco.com/presentations/rv-bmo-feb07.pdf
Kipp
Mike - YAR.OL
If you are a paid subscriber here you can search my posts for YARA DD. The main theme is that nitrogen fertilizer is mostly derived from natural gas. YARA has gone around the world and found the most dislocated natural gas and built fertilizer plants there. The gas is converted to a very stable granular urea fertilizer and safely shipped in bulk cargo ships. This is a much easier, safer way to ship than liquid natural gas. They are going to make 100's of millions!
Kipp
Metals and Agriculture are the place for me.
I too have run the traps today, listened to the talking heads, read the stories on the internet, lisened to conference calls, etc.
I feel that the world is going to continue to consume massive amounts of base metals, much of it going to energy conversion efforts. Ethanol, biodiesel, nuclear, and coal plant construction build-out. Chinese migration from rural to urban landscape will continue at a blistering pace: housing, autos,farm/mining/manufacturing equipment, appliances, airports, roads, general infrastructure will continue at a 10% growth rate. To a lesser degree Brazil, India, and Russia will be engaged in the same activities as China. The U.S. economy and housing market is no longer the controller of base metal prices and consumption.
The agricultural industry is going to benefit from the conversion of food to fuel. The bottom line here is we now have additional demand for grain that was not anticipated. The next real estate bubble is going to be in farm land. We are also going to see food price inflation hit hard in the coming months.
I am using this pull back to rotate out of some of the bigger metal stocks I have owned, moving into junior "near term" producers of base metals, gold and silver(visit the "junior miners" board for ideas in that sector). As far as agriculture I still like YAR.OL on weakness. My brothers and I own 240 acres of farmland in Illinois so I have plenty of exposure to grain and farmland.
I'm no good at market timing. It seems to me that if the global market was going down the tubes gold would be up not down. The base metal prices held up well last week and they too should tank if the global economies are headed for recession.
I hope we hear about a bunch of hedge funds and derivative deals blowing up in the weeks to come. A good cleansing will help markets continue healthy progress.
All in all I can't see a good reason to bail out or go shoet at this point. The consensus of a 10% decline probably means it won't happen (near term). Spring is also typically strong for metals.
No matter what happens, I owe a great debt to this board and all of it's posters. Everyone has great ideas and opinions and I listen, learn from, and appreciate them all.
Good luck to each and every one of you!
Kipp
YAR.OL - YARA Website link
Here is the link to Yara Website:
http://www.yara.com/en/news_room/press_releases/index.html
YAR.OL from $119 to $187 since this post!
I think this stock is a multi-bagger. I sure would like to hear if any of you have looked at it since I made this post.
http://www.investorshub.com/boards/read_msg.asp?Message_id=14761813&txt2find=yar.ol
I only wish I had more!
Kipp
LMC - $1.01 for the year.
http://www.kitco.com/pr/1267/article_02222007024521.pdf
International Trading Online
I was sitting here thinking about the lack of sleep this new service might cause. Immagine being able to trade around the world, in all currencies, from one account.
WOW!
E-Trade will charge a $20 commission, and also give customers the ability to move U.S. dollar accounts into foreign currencies.
I use TD Ameritrade. I hope they are forced to offer the same international service soon. I may call and see if they have future plans to compete with E-Trade.
Anyone care to comment on their E-Trade experience?
Kipp
E-Trade to unveil global trading platform
NEW YORK -- E-Trade Financial Corp. on Tuesday unveiled a global trading platform that makes it the first U.S. discount brokerage to give customers the ability to trade foreign-listed stocks online.
The pilot project, which begins with 1,000 E-Trade customers this week, allows them to buy, hold and sell stocks in Canada, France, Germany, Hong Kong, Japan and Britain. The rollout is expected to take two months before all customers have access, and could one day expand to 42 international markets.
The launch unlocks thousands of stocks previously unavailable to online traders, and pressures top rivals Charles Schwab Corp. and TD Ameritrade Holding Corp. to make similar moves. It also comes as stock exchanges in Asia have bounced to unprecedented highs and far outpaced Western markets.
"Nobody can deny the world is becoming more interconnected, a more global community," said President and Chief Operating Officer Jarrett Lilien in an interview. "I think our competition is going to have to follow. This is going to be a fundamental part of investing."
Previously, retail investors who wanted to buy foreign stocks that were not listed on U.S. exchanges as American Depositary Receipts had to call brokers and accept commission fees that topped $100. E-Trade will charge a $20 commission, and also give customers the ability to move U.S. dollar accounts into foreign currencies.
The ability to keep the commission low is because E-Trade already has operations set up in 15 countries where customers have access to both local and U.S. stocks. This international network means E-Trade doesn't have to pay a third-party to execute transactions because it is already doing so as a licensed broker in these countries.
The E-Trade commission for cross-border transactions is higher than what U.S. online brokers charge for domestic trades. There has been a major price war in the past few years among discount brokerages and banks that offer online trading.
Wells Fargo & Co. announced earlier this month it will offer up to 100 free online trades a year to customers with at least $25,000 in balances at the bank. Most of the online brokerages charge under $13 for most trades.
"Schwab and Ameritrade pulled back their international efforts since the (dot-com) bubble burst, so it really is E-Trade being dominant in that space," said Richard Repetto, an analyst with Sandler O'Neill & Partners. "I'm not sure if it transforms the business, but it helps them."
Until now, most average investors were pretty much restricted to owning mutual funds or electronically traded funds - commonly known as ETFs - with stocks from a particular market. Most retail investors have shied away from owning foreign stocks because there isn't as much research available to them, while funds tend to spread the risk.
There's a growing consensus on Wall Street that investors should diversify overseas, appropriating 25 percent of their portfolio to foreign investments. More and more Americans are sinking cash into mutual funds outside the U.S., where last year saw broad advances.
For example, funds that tracked the Asia-Pacific region - excluding Japan - had a 29.61 percent return last year, according to Lipper. Latin American funds jumped 43.73 percent, while those tracking China returned a staggering 61.51 percent in 2006.
Lilien believes the timing is now right where investors are becoming more interested in buying stocks outside of the U.S. E-Trade tinkered with the idea of offering cross-border training off and on during since 1999, he said.
However, the demand just wasn't there after the dot-com bubble burst in 2001. Wall Street meandered before steadily moving higher in the past four years.
"It was only a matter of time when the U.S. investor became interested and ready for global stock trading," Lilien said. "International is a fundamental part of everyone's portfolio, and I don't think that's going to change."
China's central bank to raise deposit reserve ratio
www.chinaview.cn 2007-02-16 18:53:58
BEIJING, Feb. 16 (Xinhua) -- The required reserve ratio for financial institutions engaging in deposit business will be raised by 0.5 percentage points from Feb. 25 to 10 percent, the second hike in two straight months, sources with China's central bank said here on Friday.
This moderate increase shows that the People's Bank of China (PBC) had shied away from using drastic moves to absorb liquidity as the country's consumer price index, the measure for inflation, grew by only 2.2 percent in January, down 0.6 percentage points from the previous month, observers said.
The reserve ratio hike, the fifth of its kind since last July, was made to deal with "dynamic currency liquidity changes and to consolidate macro-economic controls", said the central bank in its latest statement.
The statement said that imbalanced international payment generated by mounting trade surplus had resulted increasing currency liquidity and made another reserve ratio hike necessary.
China's central bank lifted deposit reserve ratio by the same margin of 0.5 percentage points on Jan. 15, which was estimated to take 150 billion yuan (18.8 billion U.S. dollars) out of the banking pool.
However, some economists argued that an interest rate hike was inevitable, as reserve ratio adjustments and open market operations had proved ineffective in curbing excess liquidity.
Official data revealed that the newly-added renminbi-denominated loans amounted to 567.6 billion yuan (about 74.7 billion U.S. dollars) in January, basically equivalent to last January but twice as much as last year's monthly average.
The outstanding renminbi-dominated loans amounted to 23.1 trillion yuan in January, up 16 percent year-on-year. The growth rate was 0.9 percentage points higher than the end of last year and up 2.2 percentage points from last January.
Yin Zhongli, an expert with the Financial Research Institute of the Chinese Academy of Social Sciences, called the move "an expected expedient."
"This won't be the last reserve ratio hike of the year. Meanwhile, interest rate rises are far from the best tool to absorb liquidity, " he said.
Economist Han Zhiguo contended that an advisable way was to facilitate the development of capital market and allow stock markets to play a bigger role.
The central bank reiterated in its Friday statement that it would "adopt a prudent monetary policy, tighten the management of bank liquidity and facilitate the rational growth in monetary credit."
ADA.V stuck in the mud.
I was hoping this stock would show some life with rise in zinc price. Am I missing some bad news?
Kipp
MSGI or anyone - XNN C.C.
Did you listen to the CC? I will listen tonight but I'm curious to get your take.
Thanks,
KIpp
ARSD.OB up on volume past few days.
I have looked for a reason but see no news. Anyone have any news?
Kipp
Wade OPBL
Can you post a link to where you expect to see the trading volume number today?
Thanks!
Kipp
u308 website started today.
This is a "kitco" type website for uranium.
http://www.u3o8.biz/s/Home.asp
Kipp
CMM.V - IR Presentation from January
Take a look at this presentation. I can't help but think this stock is cheap. If they can get there act together and get producing they should see some price appreciation.
http://www.centurymining.com/documents/Corporate%20Presentation%20(Jan%2015%202007).pdf
I know this stock makes some of you want to puke, but that's probably a good thing for those of us thinking of taking a good sized position.
I would appreciate comments after you look at this presentation.
Thanks!
Kipp
CMM.V - Anyone a T/A expert?
This stock has a chart that looks great if you print it out and then hold it infront of you while looking in a mirror! Anyone venture a guess where the technical bottom is. I am airing up the tires on my truck and checking the reverse gear!
Any thoughts....anyone???
Kipp
Bob - Do I make the check out to "Mrs. Bobwins"?
ABI.V Abcourt
Has anyone done any work on this one?
Look at this:
http://www.miningmarketwatch.net/abi.htm
Kipp
Donald Coxe Weekly Call - Japan
http://events.startcast.com/events/199/B0003/#
Zinc Price and China
For all of you that are on my email list for "Basic Points": I just sent you a pdf from Deutsche Bank that outlines how the tax changes in China have scewed the demand numbers. Check your email!
For any of you that are not on my "Basic Points" distribution email list, just send me a PM and I will add you to the list.
Kipp
Cornerstone Natural Gas Report
Here is this weeks report.
It was 18 degrees BELOW ZERO at my house here in Denver this morning!
http://www.cornerstoneenergy.com/marketnews/mi020207.pdf
Kipp
Cl001 - LMC
I margined all of my LMC and purchased LionOre, RNO, and HudBay with all of the proceeds. I am going to hold LMC until one of the big boys takes them out. It is like the old video game "pac-man"! I am thinking a 500% gain on my original EZM shares is not out of the question!
Kipp
Lundin buying HudBay
This is the first time I have seen this merger talked about in the press:
http://www.theglobeandmail.com/servlet/story/LAC.20070126.RLUNDIN26/TPStory/Business
Kipp
LionOre upbeat about Activox project
Ditiro Motlhabane
1/23/2007 5:08:21 AM (GMT +2)
The management of LionOre has expressed confidence and optimism about the new Activox project which was launched by president Festus Mogae at the Botswana Metals Refinery (BMR) site along Francistown/ Matsiloje road on Monday.
The construction of Botswana’s first ever metals refinery and the world’s first ever Activox refinery which uses hydrometallurgical technology is expected to boost the efficiency and improve productivity at BMR’s sister company, Tati Nickel Mine.
The President and Chief Executive Officer of LionOre International, Colin Steyn, said the project is a culmination of ten years hard work by his company and its subsidiaries.
He said Botswana stands as a shining beacon to the world of how to successfully harness and harmonise the imperatives of government and business, enabling responsible development of its natural resources for the benefit of all stake holders.
“This refinery will have a broader impact on Botswana than just the mining sector or the local communities around Francistown. This investment of 4 billion pula represents a 3% contribution to the economic diversification of Botswana, 1% of the country’s GDP and a 2.5% increase in export earnings and this will benefit all the citizens of Botswana. This partnership has combined to maximise the value of our joint resources in the region,” Steyn said.
LionOre Group Chief Operating Officer, Peter Breese, said the refinery represents a significant investment for both LionOre and the people of Botswana at a cost in excess of 3 billion pula. He said the new Activox refinery will have the capacity to produce 25 000 tonnes per annum of highly refined nickel and 22 000 tonnes per annum of refined copper representing an increase of approximately 100% metal production which will further increase foreign currency revenues for the economy.
“When the refinery is commissioned in late 2009 it will employ around 500 people. This is a significant skills development project in that Botswana has never had a metals refinery prior to this project. LionOre thus sees this investment as an opportunity to significantly develop enhanced skills within Botswana which will add to the future economic prosperity of the country,” he said.
Conducting the groundbreaking ceremony at the BMR site the president of Botswana Festus Mogae hailed LionOre for the new technology and pledged that government will continue to use its best endeavours in promoting the success of world class investors like LionOre..
“LionOre International, through Tati Nickel Mining Company, having successfully established Africa’s largest nickel mine has now introduced this state of the art facility, which will soon be operating where we now stand. The amount being spent on this project, around US$620 million is a clear vote of confidence on our investor friendly mineral policy and fiscal regime.” He said government’s policy for mineral development is to create an environment to realise maximum benefit, while also allowing investors a fair and decent return on their investment.
“Through this approach over the last few years we have succeeded in attracting increased interest among international investors. Indeed the trade journal Resource Stocks of Australia has ranked us the number one destination in the world for mineral investment. This project is one example of how new mineral sector investment is having a positive effect on our economy.”
LionOre is a world powerhouse in nickel production, owning and operating mines in Australia, Botswana and South Africa. The construction of the new Activox refinery project signals a shift by LionOre from being a concentrate producer to a finished nickel producer with the capacity to produce nickel on site without depending on third party for smelting.
The Activox refinery will use LionOre’s state of the art hydrometallurgical technology which involves the purification and recovery of metals via dissolution in water.
LionOre International holds 85% shareholding in TNMC and BMR while the government of Botswana holds the remaining 15% in both companies.
Cornerstone Weekly Natural Gas Report
Here is the weekley report link:
http://www.cornerstoneenergy.com/marketnews/mi012607.pdf
Kipp
LMC - More good news for Lundin!
Double zinc mining success in Portugal by Lundin
By: John Chadwick
Posted: '25-JAN-07 08:00' GMT © Mineweb 1997-2006
LONDON (Mineweb.com) --Finnish manufacturer Metso Minerals will supply a crushing plant and other equipment to Pirites Alentejanas’s revitalized Aljustrel zinc mine in southern Portugal. Delivery will be completed by January 2008 and the order valued at some €14 million comprises a stationary crushing plant, consisting of a primary jaw crusher, a secondary cone crusher and two tertiary cone crushers with two screens. The order also includes a 2.2 km conveyor, a VPA pressure filter, six units of stirred media detritors and mill lining to the existing mills, as well as engineering, erection and commissioning services.
Metso Minerals has designed the modifications of the Aljustrel mine. During the first year of operation, about 1.4 Mt of zinc ore will be processed from the Moinho deposit, and in the subsequent years ore will be processed primarily from the higher grade Feitais deposit, at a rate of 1.8 Mt/y.
The current mine life, estimated to be 10 years based on known reserves, could be much greater when inferred resources are upgraded to indicated and measured categories, and all deposits have been fully delineated.
Exploration potential in the Aljustrel mine area is considered excellent with the known deposits open at depth and along strike. Extending the deposits, as well as upgrading inferred resources to indicated resources, will be part of an ongoing resource delineation program once the mine is in production.
Pirites Alentejanas is a subsidiary of based Eurozinc Mining, which recently merged with Lundin Mining.
Aljustrel joins Neves-Corvo as Lundin Mining's second base metals mine in Portugal.
Lundin Mining has just announced that the new zinc processing facility at Neves-Corvo is now operating at the designed production and metallurgical performance levels, just five months from the commissioning date. Joâo Carrêlo, Executive Vice-President and COO for Iberian Operations, said "The zinc plant has consistently performed at the designed production rate with the recovery of zinc metal into concentrate exceeding 80%, at the targeted zinc concentrate grade of approximately 50%, since December 5, 2006. This is substantially ahead of the typical 12 to 18 month ramp-up time for similar base metal process plants around the world and is attributable to the hard work of the employees at the plant and the metallurgical consultants who assisted us on the project".
Zinc production at Neves-Corvo came in slightly earlier than planned in July of 2006, and the mine is forecast to produce 25,000 tonnes of zinc metal in concentrate for 2007. Carrêlo added: "We are at present completing the design and engineering requirements to increase annual zinc production to 50,000 tonnes of zinc metal and will be selecting an engineering firm to review opportunities to expand production even further. The new reserves and resources of the zinc rich zones in Neves-Corvo will be published shortly, however, it is safe to say that the information to date supports considering a substantial increase to the zinc production at Neves-Corvo while maintaining and/or increasing the output of copper at the mine".
Moly price outlook info:
http://www.kitco.com/ind/Reser/jan182007.html
I own Blue Pearl as well as Roca.
Kipp
Lundin eyes doubling Neves-Corvo zinc production
I am happy to be weeks away from long term hold on my original EZM shares purchased at $1.21 avg. I still think there is big upside to this company in the coming year. 25,000 tons of zinc at $1.70/lb is worth another $85,000,000 per year.
http://yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070124:MTFH51082_2...
Good Luck!
Kipp
Thanks for Blue Pearl!
I was in the back of a taxi on the way to my hotel yesterday, buying Blue Pearl an hour before the close. Looks like it will be a good one!
Kipp
LionOre secures next $250M for Tati Activox project
BOTSWANA - Toronto-based LIONORE MINING INTERNATIONAL has raised $250 million in project funding for its Activox® and dense media separation (DMS) projects in eastern Botswana near the border with Zimbabwe. The balance of the project funding will be financed from the company's treasury ($100 million) and from cash generated by existing operations.
The project is owned by Tati Nickel, a joint venture of LionOre (85%) and the government of Botswana. The operation comprises the Phoenix open pit and mill. The nickel and copper concentrates are shipped 200 km by road for custom smelting.
Tati Nickel is boosting output with the addition of the $114-million DMS Phase 2 plant now under construction. The plant will boost ore grade to 0.52% Ni (from 0.30%), making it suitable feed for the Activox refinery. A description of the Activox process is available at www.LionOre.com.
Nickel Advances in London on Falling Stockpiles, Supply Delays
By Brett Foley and Chanyaporn Chanjaroen
Jan. 15 (Bloomberg) -- Nickel rose on the London Metal Exchange on speculation dwindling stockpiles and supply disruptions will create a shortage of the metal.
Inventories tracked by the LME fell by 240 tons to 5,676 tons, the exchange said in a daily report today. LME-monitored stockpiles have slid 82 percent in the past 12 months while delays to nickel projects proposed by BHP Billiton Ltd. and Cia. Vale do Rio Doce, the world's largest and second-largest mining companies respectively, have exacerbated shortages.
``Those supply concerns will remain this year and into 2008,'' said Roy Carson, a London-based analyst at Triland Metals Ltd, one of 11 companies authorized to trade on the LME's floor. ``How much that continues to affect the price will depend on demand.''
Nickel for delivery in three months on the LME increased $1,255, or 3.9 percent, to $33,700 a metric ton as of 11:59 a.m. in London. The metal dropped 3.2 percent at the end of last week. Nickel, which is used in stainless steel, more than doubled last year and traded at a record $34,950 on Dec. 15.
BHP said on Nov. 30 that its Ravensthorpe project in Australia would be delayed by as much as a year as costs increased 64 percent. Vale was ordered by a French court on Nov. 24 to stop construction at its $2.15 billion Goro mine on the Pacific island of New Caledonia until it received administrative licenses. Vale acquired Goro when it gained control of Canadian miner Inco Ltd. last year.
Further exacerbating supply concerns, Eramet SA, operator of the world's largest ferronickel plant, said on Jan. 11 that it reduced sales to customers and used inventories to cope with a three-month-old strike that has cut production by almost a third. The protest on the French-controlled Pacific island of New Caledonia has reduced Eramet's production by 50 metric tons a day, or 27 percent of its 185-ton daily rate, since Sept. 25.
Nickel Demand
Deutsche Bank AG, Europe's biggest securities firm, raised its 2007 price forecasts for nickel by 62 percent to $14.28 a pound, and its 2008 forecast by 110 percent to $14.06. Spot nickel prices averaged $10.96 a pound in London last year. The bank also increased its 2007 zinc forecast by 6.7 percent to $1.67 a pound.
Rising demand from Chinese stainless-steel makers and delays to the nickel projects of Vale and BHP means there will be a nickel deficit until 2009, the bank said in a Jan. 12 report.
Stainless-steel output rose 14 percent last year to 27.8 million tons, industry consultant MEPS (International) Ltd. said on Dec. 21.
``Demand seems to be holding up at the moment,'' Triland's Carson said.
Aluminum Shortage
Copper fell $50 on the LME to $5,700 a ton. LME-tracked inventories of the metal gained for a fourth day, up 2,600 tons, or 1.3 percent, to 199,450 tons. Aluminum gained $33 to $2,728 and zinc increased $50 to $3,820.
LME data show a shortage of aluminum, the most-traded metal on the exchange, as cash prices were $110 more than the three- month price today, the highest premium since August 1997.
A group of investors hold long positions, or bets that prices will rise, exceeding 40 percent of total open interest for the contracts to expire this month, LME data as of Jan. 11 show. Open interest means the total of bets on price direction.
There were two short positions, or investors previously sold the futures on expectation of buying them back at lower prices, of up to 19 percent each of total open interest. These short holders need to buy the futures to cover the positions this month, boosting prices of metal for immediate delivery.
Rising demand for aluminum this month probably came after China, the world's largest producer and consumer of the metal, increased export tax and cut incentives for exports last year, Randy North, a trader at RBC Capital Markes in London said today by phone.
Such measures are now reducing supplies from China. ``The market underestimated the impact of China's rebate cut,'' he said.
Len, I looked up "statistician" in my Webster's and guess what? All there is is a picture of you!
You are THE stats man of all time!
Thanks for all the hard work and making this so much fun.
Kipp
Anyone know if Merrill can trade Canadian stocks on Monday, even if our market is closed???
Kipp
1 Year Chart of U.S. Dollar Index
Canadian Dollar Article
http://news.silverseek.com/CharlestonVoice/1168554431.php
Futures Traders Place Record Bets Canada Dollar to Decline
By Haris Anwar
Jan. 12 (Bloomberg) -- Futures traders boosted their bets against the Canadian dollar to a record high for the third straight week as a decline in crude oil prices and a slowing economy reduced the currency's appeal.
Wagers by hedge funds and other large speculators on a decline in the Canadian dollar exceeded bets on a gain by 84,906 as of Jan. 9, increasing from 74,268 a week earlier, according to the Washington-based Commodity Futures Trading Commission. It was the biggest so-called net short position since at least February 1983.
Canada's dollar rose 0.7 percent to 85.47 U.S. cents at 3:41 p.m. in Toronto. One U.S. dollar buys C$1.1694. Yesterday, it touched 84.72 U.S. cents, the weakest since Nov. 22, 2005.
Futures are agreements to buy or sell assets at a set price and date. The figures reflect holdings in currency-futures contracts at the Chicago Mercantile Exchange.
Canada's economy, the world's eighth-largest, failed to grow in back-to-back months in October and September for the first time since March and April of 2003, Statistics Canada reported Dec. 21.
Crude oil fell to a 19-month low yesterday, before rebounding today. Commodities such as crude oil account for about 54 percent of Canada's economy.
The Canadian dollar has dropped 6.4 percent from 91.44 U.S. cents on May 31, which was the highest since 1978.
Each Friday the Commodity Futures Trading Commission usually publishes aggregate numbers for long and short positions for speculators such as hedge funds and institutional investors that buy or sell futures to protect against price moves.
Analysts and investors follow changes in speculators' positions because such transactions can reflect an expectation of a change in prices.
The Canadian Dollar vs. U.S. Dollar
I have decided that the chances for the Canadian Dollar (CDN) to hit par with the U.S. Dollar (USD) have increased. I feel that the counter trend bounce in the USD will end in the coming weeks and it will roll over. I am almost 100% out of U.S. stocks and hold all Canadian and Eurozone equities at this time.
Here is a 5 year chart of the USD to CDN
Don Coxe's Investment Recommendations
From the most recent copy of "Basic Points": (I will add you to the email distribution of Basic Points, just PM me with your email)
INVESTMENT RECOMMENDATIONS
1. Continue to maintain an overweighted position in oil stocks with long
reserve life indices in politically secure regions, particularly in the Alberta
oil sands. The share price of a company with more than fifty years’ reserves
will continue to fluctuate in response to oil price changes, and oil prices
will remain weak until there is clear evidence of a return to fast global
growth, but there are so few such companies that they deserve a huge
scarcity premium.
2. Continue to maintain an overweighted exposure to mining stocks with long
reserve life indices in politically secure regions. Base metals have no OPEC
to stop their downward corrections, but great orebodies are still rare, and
the mining majors are richer than ever before. Takeovers will continue, so
stocks of strong companies will not fall as far as metal prices. Whenever
the global recovery resumes, base metals should be the top-performing
commodity asset class.
3. Continue to maintain an overweighted position in gold, whether through
the mines or the ETF. The serial debauching of corporate bonds, and the
dissemination of junk derivatives through the financial system mean that,
if a true global slowdown comes, systemic risk will return. Gold’s true
value these days is not as an inflation hedge, but as a protection against
serious problems for the dollar and/or the financial system.
4. Build an overweight position in agribusiness stocks. If the El Niño turns out
to be stronger than currently forecast, be aggressive in your purchases.
5. Build an overweight position in Emerging Markets stocks. The world of
tomorrow will become increasingly dependent on the increasingly scarce
resources that EMs have in abundance—commodities and workers.
6. Maintain a longer-than-benchmark bond duration in balanced portfolios.
Buy long zeros as hedges against portfolio exposure to falling industrial
commodity prices.
7. The Canadian dollar is the most undervalued of the leading currencies.
Canadian-based investors should ensure they hedge their exposure to US
dollar-based investments. American clients should diversify their bond
exposure by reducing Treasury holdings in favor of Canadas. All other
investors should be building increased exposure to high-quality Canadian
assets.
8. If Nasdaq continues to outperform the S&P in coming weeks, expect a
stock market correction. This is a record run for US stocks without a 10%
pullback. Nothing is forever, particularly a Nasdaq-led rally.
9. This is the Year of the Cicada in the Upper Midwest, when billions of
homopterous insects will suddenly emerge from the ground and chirp.
This phenomenon occurs every 17 years. The last two happy times for
cicadas were not happy times for investors.