Replies to post #26404 on Copper King Mining Corporation fka CPRKQ

[ABIGIDIOT]

nice theory

Posted by: lexion585 Date: Friday, July 03, 2009 10:56:51 AM
In reply to: None Post # of 26404

Good morning......
A good DD project for somebody on this board would be to investigate the Royal Bank of Scotland... IMO

Have a happy 4th all!

[goforthebet]

Commodities: Is it time to buy copper and nickel again?

Once they were the hot funds. Now Patrick Collinson asks if they're leading a new bull run

The price of oil went below $40 a barrel, but is now around $70. Copper collapsed from $9,000 a tonne to below $3,000; now it is above $5,000. Nickel, zinc and tin are all up 50%-60% since their March lows. Is this the start of another bull run for small investors in commodity funds or time to cash in?

Commodity funds were the hot unit trusts of 2005-07, with small investors enjoying huge gains as China's voracious demand for industrial metals pushed prices to record levels.

The UK's biggest commodity fund, JP Morgan Natural Resources, gave investors a return of 50.1% in 2005; 26% in 2006 and 43% in 2007.

But in 2008 the world's mines turned into a money pit, as everyone from car manufacturers to skyscraper developers pulled the plug on demand. Some investors who bought towards the top of the market saw their investment more than halve in value.

At JP Morgan, fund manager Stuart Connell says much of the recent rebound in prices is down to demand from China which, despite the global slowdown, is still posting economic growth figures of around 6% a year. "We don't think valuations are by any means ridiculous. We are still a long way from the top," he says.

In the short term there could be a "wall of money" looking to commodities as an alternative to minuscule returns on cash, he adds. In the longer term, he reckons commodities are supported by the industrial revolution in China and Asia's young and increasingly urban population and act as a hedge against the possibility of a rise in inflation in the west.

But the scale of the rally in commodities has left some analysts puzzled. For example, worldwide copper demand is down. The world's oil inventories, which normally acts as a brake on price rises, are near record highs. The car industry remains stagnant. So why have prices started rising again?

What's emerging is that the Chinese State Reserves Bureau has been stockpiling copper and other metals, regarding this as a better way of investing its $2tn reserves than sinking them into risky US treasuries.

This is music to the ears of commodity fund managers. Shares in the world's giant mining companies have soared this year. Oil companies such as Brazil's Petrobras have doubled in value, while BP and Shell are around 20% above their March lows.

All of the reasons why investors first became so excited about commodities are still there, Connell reckons. And because the credit crunch has starved many projects of capital, the supply issues have, if anything, got worse.

Critics won't see it that way. There is still virtually no volume revival in industrial demand in Germany, Japan or the US, which together still make a lot more stuff than China.

Back in March, when commodity prices were at a low, Rob Pemberton, of financial advisers HFM Columbus in Tunbridge Wells, told investors to pile back in. But today he believes prices could plateau or even fall.

"Commodities have done too much, too soon. These things have a tendency to overshoot. The fundamentals don't really back up the magnitude of the move. It's not as if Chinese industry has sprung back into action. This has been a Chinese-led inventory build, but they weren't buying because of demand, but because metals were so damned cheap."

Try playing the game – it's a (natural) gas
Is natural gas about to explode, or will it just burn your money?

Speculators are moving out of the commodities that have performed well in recent months and into the ones that have not, writes Patrick Collinson. And the one the speculators like most is natural gas.

This sort of punting used to be the preserve of big-money investors, but small investors can now play the same game. You buy an "exchange-traded fund" (ETF), which replicates the price rise and fall of a particular commodity. ETF Securities is the leading player in this market. The minimum investment can be just a few pounds, while the annual management fee tends to be between 0.4% and 1%. You can even put them in your personal pension plan or self-invested personal pension (Sipp).

But there is no denying this is a risky strategy. The underlying ETF is backed by a "counter-party", which can be a bank or other financial institution, and we have all seen how shaky they can be.

Nicholas Brookes, head of research and investment strategy at ETF Securities, closely monitors securities. Last year, many were shorting oil, making money as it tumbled from a peak of above $150 a barrel. "From last October we started seeing inflows into metals. The big move, which has been going on since May, has been into natural gas."

He says the "rig count" in the natural gas market – an indicator of production – supports a possible price rise, but warns inventories are high and demand weak.

http://www.guardian.co.uk/money/2009/jul/04/commodities-investment-funds

[Fairways18]

I wonder if RBS will be interested in providing LT financing once they see the higher volumes of concentrate.

F18