Replies to post #666 on iHub Mining Sector Entrance Lobby

[Frank Pembleton]

marcos...

Three rules for oilpatch investing.

To make money in this market you need to anticipate -- if you're finding yourself reacting to the circumstances your sheep.

Rule No.#1 - Anticipate, don't react.

fwiw, I've been trolling through my watchlist of favs and I gotta tell-ya things are getting a little ahead of themselves. Stocks like Keywest Energy (KWE-TSX) Peyto Energy (PEY-TSX), Thunder Energy (THY-TSX) even crap like Canadian 88 (EEE-TSX) have made some substantial moves in the past couple of weeks. When buying these stocks there has to be a glut of product on the market – you sell when there’s scarcity. We’re beginning the stage of scarcity awareness.

Rule No.#2 – We’re one cycle away from a boom or a bust.

We’ve seen the last of the M&A activity with Canadian Natural (CNQ-TSX) buying the heavily indebted Rio Alto. This signified the beginning of the new cycle, the cycle always begins when inventories reach new record highs. Therefore the massive inventories forces cuts to the budgets of the major producers and naturally they stop drilling. How do they catch up when inventories fall? They do extensive take-overs of small junior firms who were nimble enough to get financed in lean periods.

Rule No.#3 – Consolidation happens at either the top or the bottom of a sector’s market cycle.

About the PDF document… I’ve read these RJ pump jobs once a week for the last couple of years and for as long as I can remember they never write anything that’s bearish on this sector. They’re the CNBC of the oilpatch. Permabullz.

About Richard Saunders, yeah... smart guy-- I hope Claude and him become friends, it certainly has the potential of a dream team.

Regards,
Michael

[KastelCo]

Hi marcos,

I agree with Michael on the RJ reports. I read them for the facts not necessarily the opinions. They are perma bulls.

Richard S. is definitely a worthwhile read (as are many), but then again you gots to make up your own mind. Sometimes when I read guys I follow I do exactly the opposite of what they suggest (and it works out :o) Like Bobby says: Don't follow leaders, Watch the parkin' metres

Yeah, I pointed Claude to the Canadian REITS and the Boom Boom Room. http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=18310847
I get the feeling he was quite taken by the fat yield on Provident. Assuming here he'll do his research 'cause there is more to these than just yield to consider. Depends on your goals which is why in my post I stated that I'm more LT buy and hold in those trusts, hence for that purpose I prefer those with a decent record of good management demonstrated by consistently good hedging and reserve acquisition (staying ahead of the cycle or to use Michael's vernacular those that anticipate well).

I have PEL.TO and PQUE and NCF.UN (a trust) all for trades. A trust for a trade ? Yes because they don't hedge much so NG leverage is good while still paying a dividend and they were basically at what appears to be a cycle low (could be wrong though :o), I certainly was too early adding more AVN.UN @ the 12.50 to 12.60 level.

regards,
Kastel
A cute and cuddly Canadian