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The Peter Dag PORTFOLIO STRATEGY & MANAGEMENT
65 Lakefront Dr., Akron, OH 44319.
1 year, 24 issues, $389.
Petro-Canada in a strong sector
George Dagnino's latest addition to Model Portfolio is Petro-Canada (NYSE PCZ $47.61).
PCZ is an integrated oil and gas company with a portfolio of businesses spanning both the Upstream and Downstream of the industry. In the Upstream, the Company explores for, develops, produces and markets crude oil and natural gas. The Company's Downstream business refines crude oil and other feedstock, and markets and distributes petroleum products and related goods and services. For the nine months ended 9/30/03, revenues rose 34% to C$9.29 billion. Net income rose from C$618 million to C$1.48 billion."
ECONOMIC ADVICE
3910 NE 26th Ave., Lighthouse Point, FL 33064.
Monthly, 1 year, $99.
Barrick: A great investment opportunity
James Rapholz thinks the precious metals market has at the very least, four more year on the up side and his educated estimate would be six more good years. Rapholz expects gold to reach $565 by the end of the year if the Dow and Nasdaq hold up and $615 if they dry up and drop dead in the Spring. He expects Silver will be $11.70 by year's end, and possibly as high as $14.45 if all hell breaks loose in the economy. Rapholz thinks Barrick Gold (NYSE ABX) is now a great investment opportunity.
"Barrick's President announced on December 3rd that they are no longer participating in hedging and that their share holders can take advantage of an increase in the price of the stock.
I'll try to explain the hedging game in a way that you can understand it. Most of the large gold producers (with an abundance of proven reserves) couldn't make ends meet a few years back. So they started forward selling the gold that they had in the ground before it was mined. Bankers would buy the gold from them at a fixed price. As an example, and these are not true numbers: let's say that Barrick Gold sold a hedge contract to the Bank of England of 100,000 ounces at $275.00 per ounce for the gold or a profit of $1,000,000. Now, clearly, Barrick didn't want to book a loss of a million bucks, but they didn't believe that they would be taking a hit in six months: they felt that the price of gold was going to go lower and that they'd made a good deal. The Bank of England made out real well because not only did they make a million bucks on the deal, but Barrick had to give them all the gold that they sold - back again.
Most of the large producers of gold stopped their hedging programs in late 2002 and early 2003. Barrick did not stop until early December of 2003. Its obvious that they now believe that the future price of gold is going to be higher than it was on December 3rd. This is very good for the price of gold because future selling drives the price of gold down.
And, just what does this mean to you? In plain and simple terms, Barrick is now a great investment opportunity. Up until the time that they got heavily involved in hedging Barrick traded nearly dollar for dollar with Newmont Mining (which has only a very minor hedge position).
A thinking person would conclude that there is a thirty dollar gap between the price of Barrick Gold and that of Newmont Mining and as Barrick unwinds its hedging contracts - that gap is going to narrow considerably!
Barrick Gold Corp. recently announced that it is investing $153.6 million to obtain a 29% interest in Highland Gold Mining Ltd.
Barrick is aiming to increase gold reserves, and Highland currently produces 200,000 ounces of gold per year from its mine in Russia. Highland is developing three other mines in Russia and expects to boost production to 575,000 ounces per year by 2007.
Since 1996, Barrick has kept a field office in Russia to watch for exploration opportunities.
"We had a toe in the water. Now we're putting a foot in the water," said Mr. Vincent Borg, Barrick spokesman. For more information on Barrick Gold Corp. call (800) 720-7415."
INVESTOR'S DIGEST of Canada
133 Richmond St., W., Toronto, ON M5H 3M8.
1 year, 24 issues, $137.
Corriente expected to outperform in '04
Jennifer Dowty, CFA, an equities analyst with MFC Global Investment Management does not expect the stock market to derail; any correction would represent a buying opportunity.
As we enter into 2004, the outlook for the markets look bright. Successful stock picking and trading remain key determinants in getting your portfolio to outperform.
Corriente Resources Inc. (TSX CTQ $3.05, 604-687-0449, www.corriente.com) is a stock that I believe will outperform in 2004.
Corriente is a junior exploration company with three main sites in Ecuador. Potentially positive study results will be released in mid-2004. If favorable, these results could make this small-cap company a takeover target. The company is highly levered to copper. This commodity is forecast to appreciate 20 per cent next year."
THE DINES LETTER
P. O. Box 22, Belvedere, CA, 94920.
1 year, 17 issues, $195. www.dinesletter.com.
The coming uranium meltup
James Dines is signaling a Major bull market in uranium. He has introduced The Dines Uranium Average (DIURANIA) which clearly demonstrates the raging bull market going on that is, for reasons based on Mass Psychology, totally "invisible" to The Herd. The long-term DIURANIA chart will be one more of many features in the upcoming Annual Forecast Issue published by Dines.
"Turning from Visual Analysis to Fundamentals, they are also wildly bullish. The truth about "The Coming Uranium Meltup" is very simply that global uranium use - even excluding growing usage by China and the former Soviet Union - is running at around 155-million pounds a year, as compared with global production of only 94-million pounds! According to Cameco's CEO Jerry Grandey, "There are no additional pockets of supply out there that are going to surprise people," and estimated prices would have to soar to about $22.50 a pound to spur exploration and development. Even then it would take years for uranium to arrive at the marketplace. The uranium bull market is a "Special Situation," and the rest of the world's financial press is dozing at their sports.
After August 14, 2003's shocking blackout in Canada and America, utilities were shaken and realized that when they don't pay attention the lights really go out. That washout was a kick in the shins that awakened utilities to begin immediate investment in long-neglected infrastructure of the electricity grid, news of which has been disseminated widely already.
But what has been completely under the world's radar is that nuclear plants are concerned about a shortage of uranium, because when they run out of uranium the lights likewise go out. If you were running a nuclear facility, you would have to be out of your mind not to be concerned about nailing down future supply, is that not the case? There's no switching to any other fuel, no tossing another log on the fire, so to speak.
The time to position yourself for "The Coming Uranium Buying Panic" is immediately. There will be Consolidations and setbacks, as there have been all the way up, but the Major trend looks up to us."
Dines' uranium recommendation of choice is Cameco (TSX CCO; NYSE CCJ).
CRAWFORD PERSPECTIVES
6890 E. Sunrise Drive, Suite 120-70, Tucson, AZ 85750-0840.
Monthly, 1 year, $250.
Metals, Stock Indices and Currencies
are all moving ahead smartly
Arch Crawford: "GOLD, after breaking out of a large Triangle pattern at 368, has continued an accelerating advance which as of last night is challenging the early 1996 highs in the mid-420's. Last month, we wrote: "If the 400 level can be breached, the precious one could possibly fulfill the chart count of the triangle to the $430 area." Even the MACD Oscillator has finally bettered a 'declining tops' condition it has been suffering since last May. "To date, it has weathered every test!" The GOLD-Hating and GOLD controlling cabal of international central bankers seems to have lost control over $400, there being 13 +days and only 8 -days in December. Long-term charts continue to show exceptional price expansion, but we are concerned about the extremes of premium above the 200-Day Moving Average. Our December 1 comment: "The US Dollar Index has now dipped below its 1998 low of 90.74 with little or no support down to 85-87." Now at 87.26, it is fast approaching 1985 lows, several in the neighborhood of 85-86. That may well offer stronger support than we have seen, lately, and a bounce is probable from those levels in the near future. This problem will become critical as Saturn crosses the birth Sun of the United States next June! If 85 fails to hold, that problem could become more immediate.
SILVER has really been playing 'catch-up' lately rising 26.7% from an October low at 475 to over 600 in short order. The XAU Index dropped from a high of 112.75 on Dec. 2 to a double bottom straddling mid-month in the 101.40's, closing out last week at 109.48 after a successful retest of its sharply rising 50-Day Moving Average. The long term Gold/Silver Ratio suggests deeply undervalued Silver, and it appears intent upon narrowing the spread!
The METALS, STOCK INDICES and CURRENCIES are all moving ahead smartly, closely mirroring the accelerating decline in the DOLLAR! Chinese Buying spiked WHEAT & CORN while CATTLE bounced after 5 limit down days.
The OIL Complex is higher, but not dynamically so! Highs in 2000 and in 2002 were in the 37.20-37.83 range. It seems rather muted against a backdrop of generally rising Dollar substitutes.
We have continued to recommend the Stocks, BONDS and Currencies of Australia, New Zealand, Canada, and to a lesser extent Russia and South Africa (greater political risk) for the last 2-1/2 years! "The Major shift to Resources is ongoing and will probably last for years. We firmly believe that coordinated attacks against US$-denominated assets could occur over next few weeks."
THE COMPLETE INVESTOR
500 5th Ave., 57th flr., New York, NY 10110.
Monthly, 1 year, $129.
Stephen Leeb: "Ask investors - including market professionals - to identify the greatest bull market of the past 30 years, and most would probably cite the tech bubble of the latter 1990's, when between late 1994 and early 2000, the Nasdaq climbed more than six-fold. But they'd be wrong. In the four plus years between mid-1976 and the third quarter of 1980, gold stocks climbed nearly sevenfold. Now that's a bull market.
And this is more than an interesting historical datum. Over the next few years we're a lot more likely to see a repeat of a big bull market in gold than in tech. In fact, you can argue that the conditions that in the end terminated the bull market in gold in 1980 are a lot less likely to occur today.
This means the recent bull run in gold, in which gold stocks have climbed more than 250 percent from their bottom in the third quarter of 2000, could be just the start.
The economic condition that went hand in hand with the bull market in gold and gold stocks was negative real interest rates. Throughout 1976-80, short-term rates, with just a few exceptions, were well below the inflation rate. Sound familiar? Today, too, real rates are below zero, and if you pay any attention to Alan Greenspan, they're likely to remain that way. The implications for gold and silver stocks such as our Growth Portfolio holding Apex Silver Mines (SIL), Barrick Gold (ABX), and Newmont Mining (NEM) could be profoundly positive."
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