Weekly Market Wrap - June 23 to June 29 2007

Weekly market commentary from Canaccord Capital's Rod Blake

Paul Van Eeden Video Interview June 25th 2007

Paul Van Eeden On BNN's Stars and Dogs on June 25th 2007

Paul Van Eeden, President of Cranberry Capital explaining why he’s bearish on base metals and uranium and bullish on Gold (Approximately 18:16 minute mark - BNN)

Personal Finance Tips - Dave Ramsey

Some Personal Finance Tips from Bestselling Author and Radio Host Dave Ramsey

Don Coxe Basic Points June 2007

Don Coxe Basic Points June 2007 - "Babel in Bond Land"

PDF File - June 2007 Basic Points By Don Coxe of BMO Harris Bank

Here's a summary by Jonathan Chevreau of the Financial Post

-Coxe’s key assessment came two issues ago, when he pronounced the 25-year old bond bull market to be dead. He says he is no longer convinced long bonds are a core investment that will continue to outperform short bonds and cash. He predicts U.S. long treasures will rise at least 200 basis points (2%) in the next two years. This will be accompanied by a return to normalcy in yield spreads and the supply of liquidity.
-Coxe’s asset allocation (for U.S. pension plans) remains unchanged at 56% equities to 44% bonds and cash. Cash is at 17% and he has zero in long bonds. The bond exposure is 12% domestic (i.e. American) bonds and 15% foreign bonds (which may or may not include Canadian bonds).

Don Coxe - Bearish on Bonds - June 2007

Video Interview


Don Coxe from BMO Financial Group explaining why he thinks the death knell has been rung for long bonds (Approximately 36: 53 minute mark - - June 25, 2007 - BNN)

Some Arbitrage Opportunities in the Canadian Resource Sector

June 15, 2007 – French nuclear giant Areva announced it’s friendly offer to buy 100% of Uramin’s (UMN:TSX) outstanding shares. The cash offer of US$ 7.75 (approx. C$ 8.26) cash per share was a 21% premium over UraMin’s 20-day average share price as of June 8, 2007. The breakup fee payable by Uramin is US$ 75 million but the if the following lines from the press release are any indication this is most likely a done deal, “The UraMin Board of Directors, after consulting with its financial advisors, has determined that the offer is fair and in the best interest of the UraMin shareholders and it has resolved to recommend acceptance of the Offer. BMO Capital Markets has provided an opinion that the offer is fair, from a financial point of view, to the UraMin shareholders.” Uramin last traded at C$ 8.41 representing a spread of -1.8% to the Areva offer price.
Voting Date: July 9, 2007


June 15, 2007 – Aluminium Corporation of China (Chinalco) announced its friendly offer to acquire all the outstanding shares of Peru Copper (PCR:TSX) for C$6.60 per share in cash. The Offer represents a premium of 21% to Peru Copper's 20-day volume weighted average trading price of $5.45 on the Toronto Stock Exchange ending on May 23, 2007. The offer has the unanimous recommendation of the Peru Copper Board of Directors. The breakup fee payable by Peru Copper is US$ 21 million. Peru Copper last traded at C$ 6.47 on the Toronto Stock Exchange representing a spread of +2.58% to the Chinalco offer price.
Offer Expiry Date: July 31, 2007


June 4, 2007 – Uranium One (SXR) and Energy Metals (EMC) announced that Uranium One would acquire all the issued and outstanding shares of EMC; each EMC share will be exchanged for 1.15 shares of Uranium One. The deal has been unanimously approved by the boards of directors of Uranium One and EMC. The break-up fee payable by Energy Metals is $55 million. The offer represents a 28% premium to the 20 day volume weighted average trading prices of Uranium One's and EMC's shares on the TSX for the period ending May 17, 2007. Energy Metals last traded at C$ 16.21 on the Toronto Stock Exchange and Uranium One last traded at C$ 14.33 on the Toronto Stock Exchange representing a spread of +2.18% to the Uranium One offer price.
Voting Date: July 31, 2007


May 3, 2007 – Norilsk Nickel made a friendly all cash offer of $21.50 for all outstanding shares of Lionore Mining (LIM:TSX). On May 23, 2007 Norilsk Nickel increased its offer to Cdn$27.50 per share in response to a competing bid from Xstrata. I guess the increased offer from Norilsk sealed the deal because on June 15, 2007 Lionore made an announcement saying “LionOre’s Board of Directors, after consultation with its financial and legal advisers, has unanimously approved entering into the support agreement and recommends that LionOre shareholders tender into Norilsk Nickel’s offer.” Lionore Mining last traded at C$ 27.21 on the Toronto Stock Exchange representing a spread of +1.06% to the Norilsk offer price.
Voting Date: June 27, 2007

5 Ways to Gauge Market Sentiment

1) Sentiment Surveys:

a) The American Association of Individual Investors Sentiment Survey measures the percentage of individual investors who consider themselves "bullish," "bearish" or "neutral" on the stock market on a weekly basis. The AAII indicator is considered a contrary indicator because individual investors like you and I are considered “last to know”. It has been found that the significance of the AAII Index Ratio increases as it rises above 70% or falls below 30%. Hence when the indicator is overbearingly bullish or bearish it is usually a signal for change in market sentiment. Available here: http://www.aaii.com/
b) The Hulbert Stock Newsletter Sentiment Index (HSNSI) tracks the recommendations of a number of financial newsletters and reflects the average recommended stock market exposure among a subset of short-term market timers tracked by the Hulbert Financial Digest. Hulbert regards HSNSI as a contrarian signal for future stock returns; so when HSNSI is high, he views the outlook for stocks as generally bearish and vice versa. The HSNSI is only available to paid subscribers but if you keep an eye out on http://www.marketwatch.com/ or type “Hulbert Stock Newsletter Sentiment Index” into Google, you can invariably find someone blogging or commentating on the latest HSNSI readings.
c) Lastly, one can also use the readings of the Yale Stock Market Confidence Indexes to gauge market sentiment. Available here: http://icf.som.yale.edu/confidence.index/YearIndex.shtml?



2) IPO Volume and First Day Returns according to Sector: During the first quarter of 2007, IPO volumes in the U.S. hit a seven year high in terms of both volume and proceeds, with $12.1 billion raised through 64 IPO’s, up from $11.6 billion from 54 IPOs in Q1 2006, but down from $19.7 billion from 89 IPO’s during Q4 2006. Average deal size has fallen to $190 million from $216 million and $221 million during Q1 and Q4 2006, respectively. The average first day returns for IPO’s in the United States in the first quarter of 2007 was 8%. These statistics are important to consider because I think IPO volume and first day returns for IPO’s signify investor appetite for new public issues and how bullish businesses feel the markets are. In my mind, a business would only go public if it thinks it is the most opportune time in the market to do so and evidence of this can be gleaned from first day returns on IPO’s. I also think that higher first day returns for IPO’s demonstrate investors’ appetite for greater risk (which translates into bullish sentiment). Let’s take for example the year 1999, investor bullishness for technology IPO’s regardless of company specifics was so great that they pushed the average first day returns for IPO’s to 72%, compare that to 11% last year (2006). So if you see IPO volumes suddenly rising significantly compared to prior period and first day returns suddenly rising much higher than usual it usually signifies a market top and vice versa.




3) VIX, VXN and VXD: The VIX is the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market's expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options. This volatility is meant to be forward looking and is calculated from both calls and puts. The VXN is the ticker symbol for the CBOE NASDAQ Volatility Index and the VXD is the ticker symbol for the CBOE Dow Jones Industrial Average Volatility Index. Since all 3 volatility indexes move in the opposite direction (inversely) to their corresponding benchmark indexes [VIX moves inversely to S&P 500 index, VXN moves inversely to Nasdaq 100 index (NDX), VXD moves inversely to DJX, which is the symbol for options based on The Dow Jones Industrial AverageSM, observing the price movements of the VIX, VXN and the VXD can give one insight into what direction the market is trending by analyzing what investors’ eagerness for risk and volatility are.




4) Bullish Per Cent Index (BPI): The BPI is a popular market breadth indicator that is calculated by dividing the number of stocks in a given group (an exchange, an industry, etc.) that are currently trading with Point and Figure buy signals, by the total number of stocks in that group. The BPI is a contrarian indicator and hence when market bullishness as indicated by the indexes are too high, it is proably a good time to go short and vice versa. When the BPI rises over 70, it is considered overbought (i.e. time to go short the corresponding index) and when the BPI falls below 30, it is considered oversold (i.e. time to go long the corresponding index). There are BPI’s for the NYSE ($BPNYA), the NASDAQ Composite ($BPCOMPQ), the Dow Jones Industrial Average ($BPINDU) and the S&P 500 ($BPSPX).
Since the BPI applies to groups/sectors of stocks it gives an investor a more general, broad based view of markets from an overbought/oversold standpoint.



5) Fund Inflows: Keeping an eye on where investors and putting their monies can be a great contrarian indicator of market sentiment. In a study done by 2 economists, Andrea Frazzini from the University of Chicago Graduate School of Business and Owen Lamont from the Yale School of Management which examined mutual-fund inflows from 1980 to 2003, they found that “for every period longer than three months (and out to five years), the stocks receiving the highest flows of new mutual-fund money performed significantly worse than the stocks that received the lowest flows of new money. Over a three-year period, the difference was 8 percentage points a year. In other words, individual investors had lousy timing, and their efforts to chase returns ended up costing them dearly. As a result, the authors conclude that "individual investors in aggregate are unambiguously dumb." (Excerpted from a Daniel Gross article “Why You Are Dumb Money”)
For example, if I see a trend (over a few weeks or months) where fund inflows into equity mutual funds are decreasing significantly and fund inflows into bond/money markets funds increasing significantly, I might start bulking up on some of my equity positions. In a sense, I would invest conversely of what the fund inflows data tells me.
Resources for Fund Inflows:
Investment Company Institute http://www.ici.org/
Amg Data http://www.amgdata.com/

In conclusion, there are many more sentiment indicators out there but I have chosen to write about the ones I use most often. I use sentiment indicators as a tool to gauge whether I should be long or short the markets and specific sectors. I can and often will be wrong in the short term however, I am looking to outperform the market in the long term on a relative and absolute basis. The resources I have provided above have helped me a significant amount and I hope they do the same for you. Happy and Successful Investing.

Paul Van Eeden, Jean-Francois Tardif, Bill Belovay and Bart Melek

Audio and Video Regarding Commodities and Markets

Audio (Requires Realplayer)


Paul Van Eeden explaining why he thinks Uranium and base metals are overvalued (CBC Radio - June 20th 2007)

Video


Jean-Francois Tardif, of Sprott Asset Management on BNN Market Call – June 21, 2007 Top Picks: Khan Resources (KRI, Genivar Income Fund (GNV.UN:TSX), Tim Hortons (THI:TSX)


Bill Belovay of Jones Heward Investment Counsel commenting on base metals on BNN's Commodities Weekly (June 22, 2007). He likes Teck Cominco (TCK.B:TSX) and Alcan (AL:TSX)


Bart Melek, Senior Economist at BMO Capital Markets commenting on Commodities (Oil, Natural Gas, Copper, Gold (Around 16 minute mark – BNN - June 21 2007)

BCE Inc (BCE:TSX). and Telus (T:TSX) Merger??

Since I'm mostly a commodities/ resources enthusiast I don't pay much attention to news such as this. However, being that the news involves Canada's 2 largest telecom companies, i reckon it deserves some attention.

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"Shares of Bell Canada closed above $40 for the first time since 2001 on Thursday after it emerged that Telus became the fourth group in merger and buyout talks with the Canadian icon. Canaccord Adams analyst David Lambert thinks a Bell-Telus tie-up is the most likely option the market has heard about to date.He thinks an offer from Telus could come in at the upper end of the $42.75 to $45 per share range previously expected from private equity buyers. However, that price may climb as high as $52 in an all-stock deal given the potential synergies a combination would bring, Mr. Lambert told clients in a note."(FP Trading Desk)

I know next to nothing about the 2 companies, other than my internet connection being served by Telus and my phone connection being served Bell Canada, which is owned by BCE. I do know that the combined entity would have a market worth greater than 53 Billion with 20 Million customers. I also know that there are already several bidders for BCE including a group that includes the Canada Pension Plan Investment Board, the Caisse de dépôt et placement du Quebec, Onex Corp. and U.S. private equity investment firm Kohlberg Kravis Roberts & Co., A group led by the private investment arm of the Ontario Teachers' Pension Plan — the largest shareholder in BCE — and Providence Equity Partners, a private equity fund based in Rhode Island and a group led by the New York-based private equity firm Cerberus Capital Management, along with the Hospitals of Ontario Pension Plan and Pacific Century Group. Some reports say OPTrust and CanWest Global Communications are also part of the consortium.

The proposed merger could also face serious opposition from regulating bodies, the competition board and even political parties (Reuters) given that if Telus and BCE merge, the Canadian telecom sector would essentially become an oligopoly including the merged BCE/Telus entity, Rogers Communications (RCI.B:TSX) , Shaw Communications (SJR.B:TSX) and Quebecor(QBR.B:TSX). While the proposed merger may end up keeping BCE public and in Canadian hands, the deal does squat for increasing competition in the wireless market. So the highly inflated prices Canadians pay for cellphones will probably remain that way for some time to come. Could this deal prompt Industry Minister Maxine Bernier to step in to public markets and make changes regarding competitiveness in the wireless markets...i don't know, all i do know is that the last time (October 2006) the Canadian goverment stepped in to the public market, income trusts lost around $20 billion in market capitalization.

Discussing BCE's most recent bid from the horse's mouth

Brent Fullard, Executive Managing Director, Catalyst Asset Management discussing his company’s recent bid for BCE. (Around 10:25 minute mark – BNN)

Analyst Opinions on the BCE saga

Peter Hodson of Sprott Asset Management commenting on the brand new Catalyst Asset Management bid for BCE and the Blackstone IPO. He also likes a solar stock called Timminco (TIM:TSX) and thinks that it can earns upwards of $2 a share over the next couple of years. (Around 49:10 minute mark – BNN)

Peter Brieger of GlobeInvest Capital Management commenting on the brand new Catalyst Asset Management bid for BCE. (Around 6:55 minute mark – BNN)

Market Vectors-Global Nuclear Energy ETF - Van Eck

Van Eck Global has filed an application with the SEC to launch a Global Nuclear Energy ETF. This will be the world's first nuclear energy ETF.

The following data is an excerpt from Van Eck's Sec filing :

Principal Investment Objective and Strategies

Investment Objective: The Fund’s investment objective is to replicate as closely as possible, before fees and expenses, the price and yield performance of the DAXglobal®® Nuclear Energy Index.” [ The DAXglobal®® Nuclear Energy Index is a a modified market-cap index that tracks global companies from uranium miners through final electrical generation, to be published by Deutsche Börse. ]

Principal Investment Policy: The Fund will normally invest at least 80% of its total assets in equity securities of U.S. and foreign companies primarily engaged in various aspects of the nuclear energy business. Companies primarily engaged in the nuclear business include those engaged in uranium mining, uranium enrichment, uranium storage, providing equipment for use in the provision of nuclear energy, nuclear plant infrastructure, nuclear fuel transportation and nuclear energy generation, and which derive at least 50% of their total revenues from such activities. This 80% investment policy is non-fundamental and requires 60 days’ prior written notice to shareholders before it can be changed. The Fund will normally invest at least 95% of its total assets in securities that comprise the Nuclear Energy Index. A lesser percentage may be so invested to the extent that the Adviser needs additional flexibility to comply with the requirements of the Internal Revenue Code and other regulatory requirements. The Fund is not managed according to traditional methods of “active” investment management, instead, the Fund, utilizing a “passive” or indexing investment approach, attempts to approximate the investment performance of the Nuclear Energy Index by investing in a portfolio of securities that generally replicate the Nuclear Energy Index. Because of the passive investment management approach of the Fund, the portfolio turnover rate is expected to be under 30%, generally a lower turnover rate than for many other investment companies.

Market Capitalization: The Nuclear Energy Index is comprised of companies with market capitalizations greater than $150 million that have a worldwide average daily trading volume of at least $1 million and have maintained a monthly trading volume of 250,000 shares over the past six months. The total market capitalization of the Nuclear Energy Index as of [ • ], 2007 was in excess of $[ • ] billion.

Principal Risks of Investing in the Fund

1) Risks of Investing in Nuclear Energy Companies
2) Risk of Investing in Foreign Securities
3) Market Risk
4) Index Tracking Risk
5) Replication Management Risk
6) Non-Diversified
7) Absence of Prior Active Market
8) Trading Issues
9) Fluctuation of Net Asset Value


With Uranium spot prices having close to doubled since January 2007 ($70/lb) i think Uranium prices are a little overheated at the moment. With the easy money already made in the sector, one has to pick and choose either undiscovered uranium stocks or emerging/existing producers of U3O8. However, this index will be an easy and diversified way to gain exposure to the Uranium sector without taking the risk of holding individual stocks. If and when this ETF makes it to the market, it would allow retail investors who dont have futures accounts to participate in and trade the Uranium market just like what the Market Vectors Gold Miners Index (GDX) and the Market Vectors Steel ETF (SLX) did for investors. The Global Nuclear Energy ETF could very possibly be a hit with investors should Uranium prices keep rising.

Research/ Insight into Uranium and Crude Oil

Marin Katusa from Casey Research on Uranium



Phil Flynn of Alaron Trading discussing the risk premium in Crude oil due to instability in Iran

Coverage of the 2007 World Gold and PGM Conference

Jay Taylor – Notes from 2007 World Gold and PGM Conference

In an inflationary environment, silver does better than gold. So in order to determine if we are in an inflationary environment, look to the gold/silver ratio, if silver is outperforming then we are in an inflationary environment.
In a deflationary environment, gold performs better than any other asset.
The following video pretty much sums up his talk.



Following chart are from the John Williams of ShadowStats (the private economist from Dartmouth that Jay talks about)

Notes From the 2007 World Gold and PGM Conference

Some Additional Notes and Picks from the 2007 World Gold and PGM Conference

Paul Van Eeden Notes: He said to always remember one concept” Buy Low and Sell High”. He is very bearish on base metals and is short them. He doesn’t believe in the Chinda or BRIC (continued robust growth in China and India’s GDP will sustain high commodity prices for years to come) theory and attributes the rise in commodity prices to major financial institutions who bought hard assets during 2005 and 2006 as a way to hedge their losses as the Yen carry trade began unwinding. He also doesn’t believe gold is in a bull market, as in a bull market prices exceed fundamental value and he doesn’t believe that has happened yet with gold.

Rick Rule Picks (Global Resource Investments): likes alternative energy themes such as geothermal and hydro. He also likes the Canadian natural gas sector, water and gold. His pick in the gold sector was Allied Nevada Gold (ANV:TSX)

Bob Bishop’s Picks (Gold Mining Stock Report): Rare Element Resources (RES:TSXV), Southern Arc (SA:TSXV) and Canadian Gold Hunter (CGH:TSX)

John Kaiser’s Picks (Bottom Fishing Report): Geologix Explorations (GIX:TSXV), Geodex Minerals (GXM:TSXV) and Lithic Resources (LTH:TSXV)

Lawrence Roulston’s Picks (Resource Opportunities): Novagold (NG:TSX), Serengeti Resources (SIR:TSXV), Romios Gold (RG:TSXV), and Copper Fox (CUU:TSXV)

Lou Paquette’s Picks (Emerging Growth Stocks): Mexican Silver Mines (MSM:TSXV), RPT Uranium (RPT:TSXV)

Jay Taylor Picks (Gold and Technology Stocks): San Gold Corporation (SGR:TSXV), Pelangio Mines (PLG:TSX), and Valgold Resources (VAL:TSXV)

News Flash - Sprott Asset Management to invest in Freegold Ventures (ITF:TSX)

June 18 - Freegold Ventures (ITF:TSX) is pleased to announce that, subject to regulatory approval, Rob McEwen and Sprott Asset Management have entered into subscription agreements with the Company for the private placement of 5.4 million units at a price of C$ 1.15 per unit for aggregate proceeds of C$ 6.2 million.
Mr. McEwen is subscribing for 4.5 million units for proceeds of C$ 5,175,000, and Sprott Asset Management, as portfolio manager for various Sprott funds has subscribed for 900,000 units for proceeds of C$ 1,035,000. Upon completion of the placement, Mr. McEwen will own 8.2% of the Company's issued shares. Sprott Asset Management, currently the largest shareholder of the Company, will be increasing its stake in the Company after completion of the placement from 9.9% to 10.5%.

TSX Group (X.TO)

A few days ago, i posted about an indicator that one can use to determine whether to go long or short the TSX Group (X:TSX). However, i think i may have found an even better and more refined indicator. Check this out -



The above graph is a measurement of daily pageviews of a site called Stockhouse. Stockhouse provides aggregated news and information regarding Canadian stocks. The site also hosts something called Bullboards, which are akin to forums for stocks. Anyway, the Alexa graph for Stockhouse seems to mirror very closely the share price of the TSX Group (X:TSX).

Coffin Brothers’ (Hard Rock Analyst) Stock Picks from 2007 World Gold and PGM Conference

The following are some of the Coffin Brothers' Top Picks in each respective category:

Base Metals
1) Sherwood Copper (SWC:TSXV)
2) ICS Copper (ICX:TSXV)

Speculative
1) Serengeti Resources (SIR:TSXV)
2) Candente Resources (DNT:TSX)
3) Copper Ridge Resources (KRX:TSXV)

Uranium
1) Strathmore Minerals (STM:TSXV)
2) Hathor Exploratin (HAT:TSXV)
3) Nova Uranium (NUC:TSXV)

Diamonds
1) Diamonds North (DDM:TSXV)
2) Stornoway Diamonds (SWY:TSX)

Tungsten
1) Primary Metals (PMI-TSXV)
2) Playfair Mining (PLY-TSXV)

Precious Metals
1) Nautilus Minerals (NUS-TSXV)
2) Bravo Venture Group (BVG-TSXV)
3) Everton Resources (EVR-TSXV)
4) Premier Gold Mines (PG-TSX)
5) Silver Quest Resources (SQL-TSXV)
6) Minefinders Corporation (MFL-TSX)
7) U.S. Silver Corporation (USA-TSXV)
8) Virginia Mines (VGQ-TSX)

World Gold and PGM Conference Coverage June 17-18 2007

So i just returned from the World Gold and PGM Conference put on by Cambridge House and was probably the youngest guy over there. The event was fairly crowded i suppose, but since people were dispersed at various simultaneous workshops and the company booths i could'nt really get a gauge of the total number of attendees. I sat in on a Jay Taylor Workshop (Gold and Technology Stocks Newsletter), a talk given by Paul Van Eeden (Paul Van Eeden Newsletter) and the Coffin Brothers (Hard Rock Analyst Newsletter) and a panel discussion that included Rick Rule, Eric Coffin, Bob Bishop, John Kaiser, Lawrence Roulston and Lou Paquette. They all happened to give out a few stock picks and i shall soon (over the course of the next few days) reveal them to you. I also entered a few contests at the show, most of them promised winnings of gold coins or silver bars but i entered one which promised 2 tickets to the Chinese Olympics which I'm thoroughly stoked about. I was also fortunate enough to see the world's largest gold coin weighing in at 220 pounds and worth a cool 2 million dollars. BTW, the coin looked magnificient and was well protected by around 15-17 Vancouver Police Dept. members.

I will most probably be going back to the show tomorrow for a couple of hours so stay tuned for the soon to be coming TOP PICKS.

Weekly market Recap - Rod Blake

Weekly market commentary from Canaccord Capital’s Rod Blake. For the week of June 9nd to June 15th, 2007.

Tom McManus (Bank of America) and Tobias Lefkovich from Citigroup

(Reuters) Jun. 11 - Tobias Lefkovich says investors should consider "technology, particularly semiconductors" for investments for the second half of 2007.
The Chief U.S. Equity Strategist at Citi said, "It's an area that we think has some great opportunity for the upside." (Reuters)


(Reuters) Jun. 11 -Tom McManus, the Chief Investment Strategist at Banc of America Securities says there is a 25-percent chance the Federal Reserve will raise rates before they decide to cut them.

Louise Yamada on Bonds, Housing, Dow and US Markets

Jun. 12 - Louise Yamada says "the process is in place for a reversal from its 26-year bond bull market moving into what is going to become the next bond bear market."

The maverick market technician, speaking at the Reuters Investment Outlook Summit in New York on Tuesday, says right now "bonds are in a transitional trading range between 3 1/2 and 5 1/2 percent." Yamada points out "we would only be moving into the 8th cycle for interest rates in the last 206 years."

Dennis Gartman Bullish on US Dollar ?!?

Jun. 12 - Dennis Gartman, Author of The Gartman Letter says "everybody I know is betting against the dollar."



He says "the one-sided nature of the dollar bearishness is really quite extraordinary." Gartman, speaking at the Reuters Investment Outlook Summit in New York, believes "the dollar is still the reserve currency of the world" and as long as that's the case, investors will continue to hold dollar reserves. (Reuters)

Short the TSX?

I don't know if anyone should or should'nt short the TSX but in the past, the number of monthly visitors to the official website of the TSX has been a good predictor of whether one should go long or short the stock (see charts above). At the moment, with visitors to the site declining and investors/money managers taking summer vacations, it would make sense to short the stock. (Disclosure: I have no position in the stock)

Buy Gold During the Summer Doldrums??

Thesis: Continued fundamental weakness in the U.S. Dollar for the foreseeable future


1) Demand for gold is greatest going into the end of July till the middle of October. During this period, consumption is highest as gold fabricators and jewelers buy gold to prepare for gift-giving peaks beginning with Indian harvest and wedding festivals in autumn and carrying through US religious holidays and Chinese New Year.

2) Gold spot prices hit their lowest levels since mid march on June 15th 2007 of $649/ oz. Technicals show gold holding above the 180 day Exponential Moving Average which acted as support in mid January and since stochastics indicate a bottom or very little downside from here on (and have been a very reliable indicator in the past), I would wait a few days for the momentum in gold to reverse to the upside. Although I am waiting, I would be cautious about not sitting on the sidelines for too long because I don’t want to miss the seasonal gold trade




3) According to the World Gold Council, “Global demand for gold reached $17.4bn in Q1 2007, more than double the level of four years earlier and 22% higher, in dollar terms, than in the first quarter of 2006.” Chinese gold production this year is forecasted to fall 100 tonnes short of meeting demand. Additonally, on February 15, the first Indian gold ETF was launched, the Gold BeEs of Benchmark Mutual Fund. The second ETF launch, the UTI Gold Exchange Traded Fund, is already underway. Rajesh Bhojani, UTI Mutual Fund’s president of marketing says about 30% of the gold market in India is investors and according to Casey Research “the new gold ETFs (in India) are going to dramatically boost that percentage.” Moreover “Demand from countries like Egypt and Saudi Arabia for Dubai gold is increasing and the city is increasing its imports to meet this demand. Dubai’s first quarter gold imports rose to 132 tonnes, up 14.8% compared with the same period last year, while exports fell 23.3% to 66 tonnes, the DMCC said. “Demand for Dubai gold is becoming ... huge and more gold is getting into the city which has succeeded in truly becoming the world’s city of gold,” said Tawhid Abdullah, managing director of the Gold and Jewellery Group in the emirate. (Gulf Times) I don’t think I need to reiterate this point again but as middle classes in developing nations around the world increase their wealth, especially in Asia and the Middle East, they spend a considerable amount of their new found wealth on gold bullion and jewellery, thereby increasing global demand for gold.

4) The first partial private equity takeover of a mining company was sealed recently between Crescent Gold and Deutsche Bank's London branch to take a 55 per cent stake in the gold-miner in return for providing a $122 million cash injection. "The private equity chaps were very keen to get a hold of gold," Mr Haythorpe (Managing Director at Crescent Gold) said. "I think it's fair to say … they're very optimistic on the gold price." (Sydney Morning Herald) Uptil now, all the M&A activity that has been going on in Canada and the United States has not affected the price multiples of Gold producing companies. However, all the gold sector needs is one major takeover, maybe it’s this deal between Crescent Gold and Deutsche Bank, maybe not but as soon as that deal is announced we can expect the stocks of gold prodcing companies to follow a similar tear as witnessed in the sectors where M&A activity is rampant.

5) With the ECB recently announcing that they will not sell any more gold this year that in itself is a major bullish sign for the price of gold. The reasons being, either the ECB is running out of their gold reserves or that they think the gold prices are too low to sell, anyway you see it these are positive things for gold.

Interviews with Robert Cohen of Dynamic Funds, Jeffrey Christian of CPM Group discussing Uranium and Ashraf Laidi of CMC Markets - June 2007

Gold and Precious Metal Stocks

Robert Cohen, Precious Metals Fund Manager at Dynamic Funds discussing Gold and Precious Metals stocks (BNN)

Uranium

Jeffrey Christian, Managing Director at CPM Group discussing the Areva bid for Uramin and the Uranium Sector in general. (BNN)

Forex


Ashraf Laidi, chief FX analyst, CMC Markets US discussing the Euro vs. the U.S. dollar, the Australian dollar vs. Canadian dollar and the Canadian dollar vs. the Swiss Franc(BNN)

United States Economy

Henry Groppe and Dean Orrico on Oil & Gas Stocks and the Big Picture in Energy June 2007

For greater perspective on the high crude and natural gas markets and prices, check out the following:

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Henry Groppe and Dean Orrico on Oil & Gas Stocks and the Big Picture in Energy (BNN)

Detour Gold (DGC:TSX)

Detour Gold (DGC:TSX)

- Andrew Kaip of Haywood Securities noted on June 12th that recent drilling results continue to confirm continuity of gold mineralization along the east west corridor (2.5 kilometers long by 200 meters wide) extending from the West Pit to the Calcite Zone resource blocks. Also, recent geologic work indicates that the mineralized corridor is open to the east of the West pit along the Sunday Lake deformation zone, further south of the main east-west trend. Detour has already drilled 124 holes (45,065 meters) to date, with results for 93 holes yet to be released. Kaip believes that the release of these remaining holes, as well as the release of a resource estimate in Q3/07 will drive up share price. His target: $9.10, Risk: Speculative.

- Wolf Stone Take: The Detour Lake project hosts a multi million ounce near surface gold resource (> 3.4 Million ounces) amenable to open pit mining (cheaper) with some very seasoned and experienced people (Hunter-Dickinson Group) running the company. The Detour Lake project is located in Canada, so is politically safe and the company only has around 40 Million shares outstanding (giving it lots of room to grow). The company will most likely go on to become a significant gold producer and if gold prices go where I expect them to ($900-$1000/oz) Detour will do very well.

Disclosure: No Position

Bart Melek on Gold and Paul Van Eeden Interview on BNN On June 13, 2007 Regarding Small Cap Resource Stocks

Videos


Bart Melek, Global Commodity Strategist, BMO Capital Markets saying – “Buy Gold” (Around 17:05 Minute Mark - BNN)


Paul Van Eeden Interview on BNN On June 13, 2007 Regarding Small Cap Resource Stocks (BNN) His Top Picks: Wildrose Resources, Mirasol Resources, Nevada Geothermal.

Market Wrap Video for June 12, 2007 by Investors Business Daily

Market Wrap Video

You've heard of the Big Mac Index, Now here's the Ipod Index

Q: What is the Big Mac Index?

A: Just over 20 years ago, The Economist magazine launched an index based on a McDonalds hamburger – the Big Mac index – a practical way of assessing whether a particular currency was under or over-valued against other currencies. The Economist magazine devised the Big Mac index in 1986 as a way of looking at purchasing power. In simple terms the theory says that if a Big Mac in Australia is cheaper than it is in the US when expressed in US dollars then the Australian dollar may be perceived as undervalued. One way that the imbalance in Big Mac prices may be corrected would be for the Australian dollar to rise against the greenback.A key assumption of PPP is that the goods being compared are broadly the same. The Economist chose the Big Mac hamburger sold by McDonalds, a product made the same way the world over. The Big Mac index can be distorted by complications such as taxes, transport costs, labour laws and trade barriers like tariffs. But no PPP approach is perfect, just as no currency model is completely accurate. The Big Mac index has some limitations, one being that hamburgers cannot be traded across countries. Additionally, the Big Mac index is updated only irregularly.

Q: What is the CommSec Ipod Index?

A: The CommSec iPod index is a light-hearted approach to assess currency movements. CommSec's iPod index is a comparison of prices for the popular iPod nano music player across the world. A key difference between the iPod and Big Mac approaches is that Big Macs are made in a host of countries across the globe whereas iPods are predominately made in China. The iPod doesn’t meet all the criteria to illustrate purchasing power theory. Freight costs no doubt vary and countries such as the US may get volume discounts. And because the iPod is centrally manufactured it won’t incorporate changes in domestic costs. But the iPod is tradable across country borders and it is homogeneous, or the same, across the globe. So it may provide a purer assessment of currencies.

CommSec iPod nano index
2 gigabytes, US dollars
January 2007

Brazil- $327.71
India- $222.27
Sweden- $213.03
Denmark- $208.25
Belgium- $205.81
France- $205.80
Finland- $205.80
Ireland- $205.79
UK- $195.04
Austria- $192.86
Netherlands- $192.86
Spain- $192.86
Italy- $192.86
Germany- $192.46
China- $179.84
Korea- $176.17
Switzerland- $175.59
NZ- $172.53
Australia- $172.36
Taiwan- $164.88
Singapore- $161.25
Mexico- $154.46
US- $149.00
Japan- $147.63
Hong Kong- $147.63
Canada- $144.20
Source: CommSec, Apple

In January 2007, the IPOD Index suggested that the US dollar has scope to appreciate, perhaps as much as 15 per cent against the Aussie dollar.


Since this event has not come to pass, To Hell With This Index ?!?!

June 2007 -- Jean Francois Tardiff, Mark O' Dea (Aurora Energy), Jim Rogers (Commodities), Bill Gross (Pimco) and Ocean's 13 Full Movie

Video

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Jean Francois Tardif of Sprott Asset Management and Mark O'Dea, President and CEO, Aurora Energy Resources on Uranium (BNN)


Jim Rogers Says U.S. Government`Lying' About Rate of Inflation and that Agricultural commodities are the best place to be for the next 18 months. (Bloomberg)


Bill Gross of PIMCO saying the U.S. Federal Reserve will hold rates until inflation declines (Bloomberg)

NASDAQ, AMEX, DOW, Standard and Poor's 500, RUSSELL 2000, TSX AND TSX Venture Performance Charts

Major North American Indices' Performance


AMEX Sector Performance


TSX Sector Performance

Canada and U.S. Economic Snapshots

Canada Economic Snapshot


U.S. Economic Snapshot

Intermarket Analysis -- John Murphy

Intermarket Analysis


MARKET RELATIONSHIPS ACCORDING TO JOHN MURPHY

-THE U.S. DOLLAR AND COMMODITIES TRADE IN OPPOSITE DIRECTIONS
-BOND PRICES AND COMMODITIES TEND IN OPPOSITE DIRECTIONS
-BONDS AND STOCKS NORMALLY TREND IN THE SAME DIRECTION
-BONDS PEAK AND TROUGH AHEAD OF STOCKS
-DURING DEFLATION, BOND PRICES RISE WHILE STOCKS FALL
-A RISING DOLLAR IS GOOD FOR U.S. BONDS AND STOCKS
-A WEAK U.S. DOLLAR FAVORS LARGE MULTINATIONAL STOCKS
(Can you spot the anomaly in the chart?)

June 8th 2007 -- Canada's Trade Surplus and Jobless Rates, Bonds in the U.S. and Sam Stovall (S&P) commenting on the markets

Canada

Jobless Rate


The Canadian economy created about 9,300 jobs last month, a tad shy of expectations, though several economists said that won't sway the Bank of Canada from raising interest rates. The jobless rate remained at a 33-year low of 6.1 per cent in May, Statistics Canada said Friday. Details of the report were mixed: most of the job gains were full-time positions, although gains in the public sector and among the self-employed offset a slide in private-sector positions. British Columbia leads the way this year in job growth, followed by New Brunswick and Alberta, while Ontario lags.

Trade Surplus


Canada's trade surplus rose unexpectedly to $5.76-billion in April from $5.10-billion in March as imports fell more sharply than exports, which were buoyed by strong industrial shipments, Statistics Canada said Friday. Merchandise exports inched down 0.3 per cent from the previous month to $40.67-billion, while imports slid 2.2 per cent to $34.91-billion. The resulting surplus was above analysts' average forecast of $4.9-billion, according to a Reuters poll. Exports, which account for about 40 per cent of gross domestic product, took a beating from a decline in automotive, energy and forestry shipments. Imports fell from their record high in March on declines in all sectors except energy. Machinery and equipment posted the strongest decline, while imports of consumer goods fell after 10 straight months of expansion.

United States -- Video

Bonds: Marc Ostwald of Insinger de Beaufort saying investors ‘too bearish on bonds’. (Bloomberg) He’s right but the next chart (Barron’s Cash Track) however, shows a changing sentiment and an inflow of money into bonds funds recently.

Markets: Sam Stovall of Standard & Poor’s explaining the market’s recent action (Around 4:44 minute mark – BNN)

Video --Dubai Oil Futures ---Threat to U.S. Oil Production --- Watch Phil Flynn of Alaron Trading

From June 6th 2007

The recently organized Dubai Mercantile Exchange has lauched its Middle East "(thick and) sour" crude futures contract as an alternative to the bellwether New York and London contracts for the black gold of Texas and the North Sea. So is this a threat to U.S. Oil production – Phil Flynn of Alaron Trading??

June 7th 2007 - JP Morgan and Gold, Aneka Tambang and Nickel and Videos of Kevin Kerr, Hugh Cleland and Robert Quartermain

Commodities

Gold: Gold may rise to more than $1,000 an ounce as demand from India, China and exchange traded funds increases and production of precious metal falls, according to JPMorgan Chase & Co., the third-largest U.S. bank.” We would continue accumulating gold and silver positions looking to higher prices by year-end,'' the analysts said. ``A four-figure gold price looks quite feasible to us given the tight supply demand situation in the gold market.'' (Bloomberg)

Nickel: Strong demand for nickel, particularly in China, will keep nickel prices at high levels, a miners conference heard Wednesday. 'Most analysts feel China will continue to grow strongly. Unless the country's economy significantly falters, nickel prices at least until the end of the decade, will be strong and stable,' said Darma Ambiar, director of PT Aneka Tambang(Indonesia's second largest nickel producer). Ambiar, who was attending the 7th Asia Pacific Mining Conference in Manila, projected nickel prices to average 8.54 usd per pound in the next 10 years, from an average of 3.04 usd per pound from 2002 to 2003. 'The outlook for nickel prices is very, very positive and our company is looking for various opportunities to increase output,' Ambiar said. (Forbes)

Recent Pinetree Capital Purchases

June 5, 2007 - Pinetree Capital purchased shares of Delta Exploration Inc.(DEV:TSX)

Videos

Silver: June 6, 2007 - Robert Quartermain CEO of Silver Standard Resources discussing the fundamentals of Silver (June 6th 2007 Bloomberg)

Small Cap Stocks: June 6, 2007 - Hugh Cleland of Northern Rivers Capital Management discussing small cap stocks on BNN (Around 40 minute mark - BNN)

Crude Oil with Kevin Kerr of Global Resources Trader

Top Hedge Fund Managers in Canada (National Post)

June 2nd 2007

1) Eric Sprott (Sprott Asset Management) <---- If you read this blog, you know about him
2) Frank Mersch (Front Street Capital) <---- Go to official website for monthly commentaries
3) Victor Koloshuk (Integrated Asset Management) <---- Never heard of these guys
4) Daniel Guy (Salida Capital Corp.) <---- Never heard of these guys
5) Jeff McCord (Vertex One Asset) <---- Local (Vancouver) shop, website for commentaries
6) Som Seif (Claymore Investments) <---- The ETF guys
7) James McGovern (Arrow Hedge Partners Inc.) <---- Never heard of these guys
8) Tom Stanley (Resolute Funds Ltd.) <---- was a producer & host of TV show “Your Business”
9) Peter H. Puccetti (Goodwood Inc.) <---- Activist Manager, go to website for commentaries

"Sell Sell Sell" - Morgan Stanley

United States

Morgan Stanley issues triple sell warning on equities – Read about it here (The Telegraph)

China

Video - Chinese Business News Roundup (CCTV)

Commodities

Uranium: Uranium spot prices may reach $200 a pound within the next two years, buoyed by a shortfall in supply and increasing investment in the nuclear fuel by speculators, said Macquarie Bank Ltd., Australia's biggest securities firm.” In the near term, with the market expected to remain in significant deficit in 2007-08, risk on the supply side and growing speculative interest, it is hard to see what could prevent spot prices going higher,'' Macquarie analysts Max Layton and John Moorhead said. “We would not be surprised to see prices move up to around $200 a pound over the next two years.'' Read more here (Bloomberg)

June 6th 2007 - Videos From George Soros, Ashraf Laidi and Mark Arbeter

George Soros (Billionaire Chairman of Soros Fund Management)


George Soros plans on investing in Brazil’s ethanol (Bloomberg)

Ashraf Laidi (Chief FX Analyst at CMC Markets)
Ashraf Laidi discussing the issues concerning the Canadian Dollar, Parity and Dollar – Gold relationship (Around 36:45 Minute Mark - BNN)

Mark Arbeter (Chief Technical Strategist for Standard & Poor's)
Mark Arbeter saying it’s too early for a major correction in the markets. His technical analysis indicates that the market has room to run for another 3-4 months because retail and individual investors haven’t yet embraced a bullish stance towards the market. (Standard & Poor's)

June 2007 - Building Permits in Canada and Crude Oil (Cyclone in Middle East, EIA Report and Iran)

Canada

Building permits: Canadian building permits fell 8.4 per cent in April after a double-digit gain in March, driven by a sharp drop of construction intensions in the non-residential sector. Statistics Canada said Wednesday that municipalities issued $5.6-billion worth of building permits, an 8.4-per-cent fall from March. “While the residential sector experienced only a modest decline, non-residential permit values fell sharply.” Non-residential permits fell 18.9 per cent to just under $2-billion, the second biggest decline – when measured in dollars – since 1989, Statscan said. Intentions in the industrial, commercial and institutional sectors eased in April. (Report on Business)

Commodities


Crude Oil: “Uncertainty about the cyclone in the Middle East is holding the crude oil futures market steady, with prices fluctuating a little as traders watch storm developments,” said Victor Shum, an energy analyst with Purvin & Gertz in Singapore. Cyclone Gonu menaced Oman's central coast with strong winds and rain early Wednesday and forecasters said it was expected to hit land in southeastern Iran later in the day or early Thursday. The Joint Typhoon Warning Center, a U.S. military task force that tracks storms in the Pacific and Indian oceans, predicted rough seas in the Straits of Hormuz, the transport route for two-fifths of the world's oil and the southern entrance to the Gulf. Gonu is predicted to skirt the region's biggest oil installations but could disrupt shipping in the Straits of Hormuz, causing a spike in prices. (Report on Business)

EIA Petroleum Status Report: Crude oil stocks were little changed in the June 1 week, up 0.1 million barrels to 342.3 million. But in a big plus and what may be a minus for oil prices, gasoline stocks rose 3.5 million barrels. Distillate stocks also rose, up 1.9 million barrels. Gasoline stocks, which are most closely watched at this time of year, are still very low, down 6.0 percent year-on-year. In contrast, gasoline demand, limited by high prices, is up only 1.5 percent. Refineries had been picking up production in recent weeks, but not in the latest week as capacity dipped back below 90 percent to 89.6 percent -- a factor that is likely to limit any relief for prices at the pump. (Nasdaq)

Iran: Iran is increasing its fleet of small attack boats capable of challenging warships and disrupting oil traffic in the Strait of Hormuz, the sea route for two-fifths of the world's daily supply of crude oil, the U.S. Navy says. Iran's Revolutionary Guard Corps already has more than 1,000 of the speedboats ``and continues to add boats armed with anti- ship cruise missiles,'' said Robert Althage, spokesman for the U.S. Office of Naval Intelligence. The commander of U.S. naval forces in the Persian Gulf, Vice Admiral Kevin Cosgriff, said the attack boats have ``a significant military capability'' and his fear is that Iran's central leadership might not have enough control over this Revolutionary Guard force to ensure against unauthorized attacks. (Bloomberg)

Video - Criss Angel Cement Block Stunt (Times Square) June 4th & 5th 2007

Criss Angel

If you guys dont know why Criss Angel, " he is an American musician, mentalist, magician, illusionist, hypnotist, escapologist, stunt performer, mystifier, metal guido, actor and the creator and director of the Criss Angel Mindfreak television series on A&E Network." (According to Wikipedia)

His latest stunt (June 4th & 5th 2007) involved him being placed in a 4'x4'x4' glass box with steel bars that was hoisted into the air and slowly filled with cement by spectators in full view at all times. The box was then suspended 40 feet above the ground in or near Times Square in New York City and would come crashing to the ground in 24 hours regardless of whether Criss manages to excape or not.


Beginning of Stunt

Last 5 Minutes of Stunt

June 2007 - Recent News on the Canadian Dollar, U.S. Housing, Gold, Crude Oil, Pinetree Capital and Videos from Barry Ritholtz and Josef Schachter

Canada

Dollar

Having cut a swath through Canada's manufacturing sector, the surging dollar is beginning to do similar damage to resource producers, which are no longer seeing their commodities rise in price at the same pace as recent years. "Anybody that has a manufacturing base in Canada and is selling products that are predominantly U.S.-dollar-based is impacted," said Paul Quinn, a forestry analyst with Salman Partners Inc. in Vancouver. "So the whole forest sector is taking a whack on the chin." Every 1-cent increase in the Canadian dollar against the United States greenback means a $19-million hit to Canfor Corp.'s bottom line, a company spokesman said yesterday. Other forestry companies being hurt by the loonie include West Fraser Timber Co., Catalyst Paper Corp., Tembec Inc. and Abitibi-Consolidated Inc. Saskatchewan's other mining giant, Potash Corp. of Saskatchewan, which is the world's largest fertilizer and potash producer by capacity, also gets stung when the loonie rises. Potash says each 1-cent change in the Canadian dollar will typically have an impact of approximately $4-million, or 3 cents a share. Cameco Corp., the world's largest uranium miner, has the bulk of its operations in Canada and is sensitive to currency fluctuations because the metal used to fuel nuclear reactors is priced in U.S. dollars. The company says that for every 1-cent decrease in the U.S.-to-Canadian dollar exchange rate results in a corresponding decrease in annual net earnings of about $4-million. (Report on Business)

United States

Housing: Federal Reserve Chairman Ben S. Bernanke said ``tighter'' lending standards for mortgages will ``restrain'' housing demand for longer than policy makers anticipated. “The slowdown in residential construction now appears likely to remain a drag on economic growth for somewhat longer than previously expected,'' Bernanke said in remarks via satellite to a conference in Cape Town, South Africa. As subprime mortgage lenders make it tougher to get loans, that will "restrain housing demand, although the magnitude of these effects is difficult to quantify,'' he said. (Bloomberg)
Here's the key statement (According to Andy Busch, Global FX Strategist for BMO Capital markets): "In addition, we at the Federal Reserve, other regulators, and the Congress are evaluating what actions may be needed to prevent a recurrence of these problems. In deciding, we must walk a fine line: We have an obligation to prevent fraud and abusive lending; at the same time, we must tread carefully so as not to suppress responsible lending or eliminate refinancing opportunities for subprime borrowers." To me, this is going to be another drag on the housing sector as local, state, and federal legislative bodies enact legislation that protects borrowers, but puts burdens on lenders that will reduce the volume of loans.

Commodities

Gold

Last week, Macquarie Research Equities (MRE) revised their gold price forecasts upwards. MRE’s more bullish gold price outlook, particularly in 2008 and 2009, is based on a number of key drivers including a muted supply response to higher prices, lower than expected central bank sales, speculators’ aversion to aggressively shorting gold in a post 9/11 world, continued producer dehedging, and likely continued pressure on the US dollar. MRE have upgraded their gold price forecasts to US$678/oz in 2007, and $720/oz in 2008, peaking in 4Q08 at US$745/oz. In MRE’s view, the global macroeconomic environment and gold’s supply/demand fundamentals are supportive of sustained historically high nominal gold prices into the medium term. For the rest of the article (Egoli)

Crude oil

Citigroup Inc., the world's biggest financial services company, raised its forecast for crude oil prices, saying the Organization of Petroleum Exporting Countries may increasingly be able to keep prices from falling. Citigroup boosted its estimate for average 2007 prices for West Texas Intermediate, a U.S. benchmark, to $62.02 a barrel from $59. It raised the 2008 prediction to $60 from $55 and the 2009 forecast to $55 from $50, the bank said today in a report. “A weak U.S. dollar, rising costs and limited visibility on new sources of long-term non-OPEC supply strengthens OPEC's ability to set a floor under prices facilitated by a creeping increase in market share,'' Citigroup said in the report. Citigroup also raised its long-term forecast for WTI to $55 a barrel, from $50. Similarly, it raised its estimates for Brent crude, a U.K. benchmark variety.
Credit Suisse, Switzerland's second-biggest bank, on May 16 boosted its forecast for West Texas Intermediate and Brent for the second and third quarter. It increased the estimate for the U.S. variety to $63 a barrel from $62.50, and the prediction for Brent to $66 from $60.50. Merrill Lynch, the world's third-largest securities firm, increased its forecast for West Texas Intermediate to $66 a barrel for the third quarter, from an earlier estimate of $60.50. WTI will average $67.50 in the fourth quarter, up from an earlier estimate of $61.50, it said. (Bloomberg)

Videos

Josef Schachter of Schachter Asset Management on Junior and Mid Size Energy Stocks (June 4th 2007 - BNN)
Barry Ritholtz CIO of Ritholtz Capital Partners, discussing Apple’s I-Phone and 2 odd things about Palm. (Around 14:40 minute mark -BNN)

Recent Pinetree Capital Purchases

June 4, 2007- Pinetree Capital Ltd. (TSX:PNP) announced that it had acquired shares of Pacific North West Capital Corp. (PFN:TSX)

Jeff Saut Investment Commentary - June 4th 2007

Jeff Saut's Latest Investment Commentary (June 4th 2007)


Here's the PDF File (Courtesy Raymond James)

Jeffrey Saut is Chief Investment Strategist and Managing Director of Equity Research at Raymond James & Associates.

Video - Discussing the SXR Uranium One (SXR:TSX) acquisition of Energy Metals Corp.(EMC:TSX, EMU:NYSE)

Confirming months of speculation, Energy Metals is finally being acquired by SXR Uranium One. As stated by the official press release, "Under the terms of the agreement, EMC (Energy Metals) shareholders will receive 1.15 common shares of Uranium One for each issued share of EMC, representing a value of C$19.12 per share based upon the closing price of Uranium One on the TSX on June 1, 2007. This represents a 28% premium to the 20 day volume weighted average trading prices of Uranium One's and EMC's shares on the TSX for the period ending May 17, 2007, the day before EMC announced that it had entered into exclusive negotiations with respect to a potential sale of the company."

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Video - Discussing the SXR Uranium One (SXR:TSX) acquisition of Energy Metals Corp.(EMC:TSX, EMU:NYSE) with Neal Froneman, President and CEO of SXR Uranium One and William Sheriff Chairman of Energy Metals. (Around 42.15 minute mark - BNN)

Risk Assesment of Junior Speculative Mining Stocks

How I Evaluate Risk In Micro-Cap Mining Stocks




Investing involves an element of risk. It is up to the investor to learn and understand the risks inherent in the stocks/bonds/futures/options/warrants, indexes etc. they invest in. Since no one can fully comprehend or foresee all the risks associated with their investments and even if they come close to doing so they always run the risk of being wrong or coming up short, risk is never eliminated. So all one can do is try and invest in instruments/vehicles that offer the best risk vs. reward propositions so as to tilt the scales of successful investing in your favor. Since I assess risk using subjective criteria, I’m going to try and outline them here as best I can.

Assessing Risk

-->My first method of minimizing risk is by looking for companies with management that have proven track records. So in my case when I scour for junior mining stocks, I try to pick out stocks with management that have previously discovered ore bodies and built mines. While there maybe a number of competent managers and geologists out there leading mining companies, I simply can’t tell the good from the bad. So, I try and only invest in companies where management has had previous experience in building successful share-holder friendly mining companies. There are a number of these guys who have previously discovered ore bodies and built mines, guys like Robert Quartermain, the Lundin family, John Prochnau, Ronald Netolitzky, the Hunter Dickinson Group, Ross Beaty, Simon Ridgeway, Roman Shklanka, Ron Paratt and many others. So this is one way I try to minimize risk by investing in people with proven track records however, I do sometimes deviate from this guiding rod.

-->The only other reason, I would deviate from investing in a company with proven management is when I find a company with a very prospective property (previously mined/ has an existing ore body/very good drill results). Given that the viability and allure of a property is usually only found out after drilling, I am willing to sacrifice some of my exploration upside in exchange for some factual geological information. So my game plan in cases like this involves waiting for a couple rounds of drill results and then interpreting the results to determine whether or not I want to invest in the company.

-->Minimizing risk can also be done through diversification. I try to diversify my stock picks across different countries and commodities, in order to spread out the geopolitical and sector risk as best I can. Since I can’t predict what a government might do (in spite of their promises) to alter an industry and what external unforeseen changes might dramatically change the supply/demand balance of a commodity (like what the flooding at Cameco’s Cigar lake mine did to the price of Uranium) diversifying is one of the ways I use to mitigate my risks.

-->Another way I try to minimize risks is by buying either exploration companies with tiny market caps (under $40 million) or buying near term producers. I like to buy exploration companies when their market caps are under $40 million because I feel this offers me the best risk/reward proposition. When I take a risk I want to offered huge potential returns. So if I buy an exploration company with a market cap under $40 million, should the company hit a good drill hole or find an ore body the returns on the stock can be upwards of 100, 300,500 or even 1000% but the downside is not that significant since the market cap is already tiny to begin with.
The reason I like to buy near term producers is because firstly, these companies have the ability to take advantage of prevalent commodity prices (as opposed to many existing producers that may have hedged their production at much lower prices) and secondly when a company (stock) shifts from being an exploration company to a producer the stock get revalued and receives a higher multiple for being a producer thereby giving the stock price a nice pop.

-->So this is pretty much how I evaluate the risks associated with speculative mining stocks. My ideal stock would have a tiny market cap (relatively undiscovered by the market) experienced and seasoned management with a world class property/asset in a geopolitically safe country. Since this is often not the case with speculative mining stocks which frequently exhibit only a couple of my criteria while excluding others, I use position sizing as my final step to reduce risk. Stocks which satisfy 2 or less of the conditions I have stated above only call for a half position. For stocks that satisfy 3 of the conditions I have stated above, I take a 75% position and for a stock that exhibits all 4 conditions I take a full 100% position. For stocks that satisfy less than 3 of the conditions, I often take an initial position in the stock and wait for further developments to determine whether I should further add to my position or reduce it.

Happy & Successful Investing!!

June - Canadian Dollar and Housing (Real Estate) News, Nickel and Jindal Steel News and Peter Grandich Video Interview on BNN

Canada

Dollar

The loonie rose as high as 94.77 cents (U.S.) – its highest level since June, 1977, and has gained 4.8 per cent over the past month alone. Until recently, much of the Canadian dollar's gains seemed to stem from fundamentals: takeover talk, rising interest rates and a string of surprisingly strong economic reports. More recently however, the loonie's streak comes in spite of moderate commodity prices – and that could mean speculators and sentiment are driving the currency to new heights. “Apologies for casting the slightest note of caution on the relentless cruise to parity, but commodity prices did not really budge in the past week, and in fact are only up slightly since the start of 2007,” said Douglas Porter, deputy chief economist at BMO Nesbitt Burns, in a morning note. (Report on Business)

Housing: A Bank of Nova Scotia report released Monday projected Canada's average annual rate of population growth will ease to just 0.8 per cent over the coming decade. That compares with 1.3 per cent pace from 1986-1996. Although home buyers have historically been more influenced by real household income growth and interest rate levels, the slowing population growth comes at a critical point in the cycle. Housing prices have surged in recent years, eroding affordability to a cyclical low, the demand-supply equation is more balanced and pent-up demand has been satisfied, factors that support the notion that the market is levelling off. Scotiabank senior economist Adrienne Warren, who wrote the real estate trends report, said shifting demographics will play a pivotal role in shaping housing demand, specifically the arrival of newcomers and the increasingly older age of Canadian households. “Immigration has been the dominant source of household formation since the early-1990s — a trend that will accelerate over the coming decade as the rate of natural population growth continues to slow,” she said. “Immigration could be Canada's only source of population growth by about 2030.” (Report on Business)

Commodities

Uranium Stocks: SXR Uranium has agreed to buy Energy Meta ls for 1.15 of its shares, valuing the offer at C$19.12 a share, or C$1.59 billion ($1.49 billion). Energy Metals closed Friday at C$18.29. The companies said the deal will create a "powerhouse" in the U.S. uranium sector. EMC has agreed to pay a break fee to Uranium One of C$55 million. (Marketwatch)

Nickel

India's largest stainless steel maker, Jindal Stainless Ltd., expects its monthly nickel consumption to double to more than 1,600 tonnes when a new plant starts operation in three years, a top company official said. "Our total nickel requirement now is about 800 to 900 tonnes per month," V.S. Jain, managing director of Jindal Stainless, told Reuters in an interview on Friday. "When we produce another 800,000 tonnes of stainless steel, our nickel consumption would double," he said, adding the projection was based on its product mix remaining the same. India's nickel consumption is met through imports, which attracts a 2 percent duty. India does not produce the metal. India's demand for stainless steel is growing at about 12-13 percent annually, Jain said, adding high prices have triggered a shift to low nickel content in stainless steel in products such as kitchenware. "The prices have gone up very high. I believe it is unrealistic and so they must come down," Jain said. More than 70 percent of Jindal's stainless steel production falls in the 1-4 percent nickel content, Jain said. Jindal aims to eventually raise its total capacity to 2.5 million tonnes to feed India's fast-growing economy, but it has not set a time frame for the expansion that will include raising the capacity at its Hissar plant to 900,000 tonnes, Jain said. (Reuters)

Videos

Peter Grandich interview on BNN – June 1st 2007 – 39 minute mark (BNN)

June 4th 2007 - Chinese Stocks Down Sharply

Video - Google 'Street Views' & Immersive Media (IMC:TSXV)

If you havent checked it out already Google has recently introduced a technology called 'Street VIew' to their Google Maps feature. 'Street Views' allows a user to view street level photographs of cities, take virtual walks; pan, rotate and zoom through cities or blocks, explore cityscapes, landmarks, points
of interest, find shops, restaurants, parks, hotels and more. (It's pretty cool...i tried it)

So here's a way to play the success of this technology. A Canadian company called Immersive Media (IMC:TSXV) has licensed it's GeoImmersive imagery data to Google to enable 'Street View'. "IMC’s GeoImmersive street-level, georeferenced imagery data is 360 degree video with embedded GPS information (collectively, "GeoImmersive Imagery Data") that can be integrated into any mapping application. IMC’s GeoImmersive imagery enables users to travel down the street and look in every direction as if they were in the middle of the scene." (Immersive Media Website)

(Immersive Media has been a Top Pick by Peter Hodson, Portfolio Manager of the Sprott Growth Fund.)

Indices, Group and Sector Performance Charts from Canada and the U.S.

Since we're halfway through 2007 , let me recap whats been happening in the Canadian and U.S. markets through some charts!!

Group Performance in the U.S.



Commodity Performance in the U.S.



North American Market Indices' Performance



Group Performance in the Canada



Now for some general trading ideas Courtesy BeSpoke Investment Group



These charts show gold at the bottom of its trading range and silver trading in the middle of its trading range. So i would go long gold stocks (they seem to be bottoming out)and keep holding silver stocks. As for oil, the chart shows it being in the middle of its range but trending lower, however with hurricane season just getting started, I'm in no hurry to get rid of oil stocks. In the case of natural gas, since the chart and inventories seem to be pretty topped out...i dont mind holding or even trimming my natural gas positions (ones that have yielded some good gains) but once again...i wouldnt be too aggressive selling natural gas..simply due to the hurricane factor. For now, its wait and see with natural gas.

Some Recent Sprott Asset Management Purchases/News and Pinetree Capital Purchases

Sprott Purchases/News

May 31, 2007 General Minerals Corporation (TSX:GNM) today announced that it is continuing to review strategic alternatives with a view to further enhancing shareholder value. As part of that strategic review, GMC announced that it has entered into discussions with Sprott Asset Management to explore the possibility of entering into a management services agreement with Sprott Asset Management. GMC is also considering completing a $60 million private placement with a number of investors that would involve the issuance of 40 million units at $1.50 per unit. Each unit would be comprised of one common share and one common share purchase warrant, with each warrant being exercisable for two years at $2.50. It is anticipated that, if the private placement is completed, the management services agreement and a new management team will be put in place and there will be changes to its board of directors. Further details are not yet known at this time. GMC's Board is also continuing to explore other opportunities to deliver further value to shareholders. In this regard, GMC is considering proceeding with its previously announced plan to spin off its property interests located in the U.S. and in Mexico into a new gold-copper focused company in a manner similar to its recent successful IPO spin-off of its South American property interests to South American Silver Corp. (TSX:SAC). GMC currently has approximately 9.4 million shares outstanding and continues to be in a strong financial position with $7 million in cash as at March 31, 2007 and 8.6 million shares of South American Silver Corp. (CCNMatthews)

May 11, 2007 UraMin Inc has been notified by Sprott Asset Management Inc. that as of 10 May 2007 it holds in aggregate, an interest of 13,234,700 ordinary shares of no par value, or 4.78% of UraMin's outstanding shares. This represents a decrease of 768,500 shares since their last notification on 28 February 2007. (CCNMatthews)

May 3, 2007 Timmins Gold Corp. (TMM:TSXV) announces that it has closed its brokered private placement of 12,627,000 units at a price of $0.50 per Unit (the "Unit") for total gross proceeds of $6,313,500. Lead placees were Sprott Asset Management Ltd. with 4,000,000 units and Macquarie Resource Capital Canada Ltd. with 1,000,000 units. Sprott Asset Management Ltd. currently owns 11.9% of the current issued and outstanding shares of the Company and would own 16.9% of shares of the Company in the event only the Sprott warrants are exercised. (CCNMatthews)

Recent Pinetree Capital (PNP:TO) Purchases

June 1, 2007 Pinetree Capital purchases shares of Redstar Gold Corp. (RGC:TSXV)
June 1, 2007 Pinetree Capital purchases shares of Valgold Resources Ltd. (VAL:TSXV)

U.S. Emplyment Data, Personal Income Data, Canadian Dollar (Jeff Rubin), World Silver Survey 2007, Paul Van Eeden, Phil Flynn, Sam Stovall

United States

Employment Situation: Employment strengthened in May but March and April saw downward revisions. Nonfarm payroll employment posted a 157,000 gain in April, following a revised 80,000 increase in April and a 175,000 rise in March. May's payroll gain was above the consensus forecast for a 135,000 boost in payroll jobs. April's payroll increase was revised down 8,000 from the initial 88,000 advance and March was revised down 2,000 from the previous estimate of a 177,000 increase. For April and March combined, the net revision was down 10,000. Within the payroll survey, strength was in service-providing industries - manufacturing jobs fell while construction was flat. Manufacturing fell 19,000, following a 20,000 drop in April. Natural resources & mining was flat. Overall service-providing industries rose 176,000 in May, following a 110,000 boost in April. Gains were led by professional & business services, up 32,000 and government, up 22,000. Turning to the household survey, the civilian unemployment rate was unchanged at 4.5 percent in May - matching the consensus expectation. Household employment rebounded 157,000 in May, following a 468,000 drop in April. The labor force rebounded 175,000 in May, while the number of unemployed edged up 18,000. (Nasdaq)


Personal Income Outlays: Personal income fell 0.1 percent in April pressured by a 0.4 percent decline in wages and salaries that reflected a give back from first-quarter rates that were boosted by bonuses. Personal consumption was on the high end of estimates at a 0.5 percent gain reflecting a big jump in services that offset a month-to-month decline in durable spending. Price readings were mostly quiet with the core PCE up only 0.1 percent in the month and the year-on-year rate up 2.0 percent, remaining at the top end of the Federal Reserve's implicit target. The overall PCE was up a noticeable 0.3 percent though the year-on-year rate was better behaved at 2.2 percent. (Nasdaq)

Canada


Dollar: The Canadian dollar will hit parity by the end of this year, Canadian Imperial Bank of Commerce predicted Friday. “Between red-hot commodity and energy markets and huge capital inflows associated with an avalanche of M&A deals, the Canadian currency has plenty of octane left to take a concerted run toward parity against the greenback and hold it into at least the first quarter of 2008,” said Jeff Rubin, chief strategist and chief economist at CIBC World Markets. The currency has risen 9.4 per cent this year and 43.4 per cent over the past five years. (Report on Business)

Commodities


Silver: According to the “World Silver Survey 2007”, Total world silver supply was 911.8 million oz in 2006, down 1.5% from 2005. The drop was due to slightly less mine production and government sales coupled with the elimination of hedging by producers. The Silver Insitute lines up demand figures to match supply, citing a 6% rise in industrial applications and a drops in photographic uses (–10%), jewellery (–5%) and silverware (–11%). Total demand for silver used in fabrication was 840.5 million oz, down only 1% thanks to the stronger industrial applications sector. The balance between fabrication and total demand was covered by dehedging and implied net investment value. (Canadian Mining Journal)

Videos

Paul Van Eeden interview on BNN on May 31, 2007 (BNN)

Sam Stovall of S&P commenting on the markets and saying the Federal Reserve should start to lower interest rates by the fourth quarter of this year by about 25 basis points.
(around 17.30 minute mark) (BNN)

Phil Flynn of Alaron Trading commenting on the Crude and Natural Gas inventories data released May 31, 2007 (34 minute mark) (BNN)

Recent Sprott Asset Management News

May 29, 2007 -Dynasty Metals & Mining Inc. (DMM:TSXV) reports that Sprott Asset Management has agreed to purchase, 1,000,000 common shares of the Company, at a price of $6.00 per share, for total proceeds of $6,000,000. Upon completion of the placement, which is subject to final documentation and approval of the TSX Venture Exchange, Sprott will own 3,408,300 common shares of the Company - approximately 12.3% of the Company's issued shares. (CCNMatthews)