Monday, December 29, 2008

For GT Blog December 29, 2008

Do you need an ETF Portfolio Makeover?

Here is the problem

There are too dam many Exchange Traded funds – funds for water, alternate energy, infrastructure, crude, gold, natural gas, home builders, oil sands, REITS, large cap, small cap, growth, value, fundamental, currency and agricultural grains – I could go on

Keep it simple – go top down and study the bigger picture

The frame below is our monthly Global Rotation Table – own the top five and avoid the bottom five – rebalance quarterly. No Currency hedging because we want the diversification. Note the 20-year bonds hitting top 5 in March 2008 and the drops in the Europe, Pacific and Emerging markets 5-months ago

Look for the December 31 rebalance in early January

Tuesday, December 23, 2008

For GT Blog December 23, 2008

Will natural gas ever bottom?

Usually the stocks will lead the price of the related commodity be it bullion and the gold stocks or energy stocks and crude.

In the chart below the AMEX Natural Gas index is displaying a higher low when the related natural gas price is displaying a lower low. That is a positive divergence set up.


Some gas may be good for you

Thursday, December 18, 2008

For GT Blog December 19, 2008

Here is a strategy for 2009 that may isolate you somewhat from systematic risk which is the market risk associated with equities.

I am referring to the dominant theme.

A dominant theme is usually associated with a long term secular trend that tends to ignore the smaller boom and bust business cycle. A secular trend is usually associated with innovation and the emergence of the "next big thing", be it the age of steam, the railroads, the automobile, transatlantic air travel, the microprocessor and the Internet.

The recent energy crisis triggered demand for fuel efficient aircraft, transit and railroad sectors. This is a global phenomenon with the big loser being the auto manufactures. Now pile on the global financial crisis and North America is facing massive job losses in the manufacturing sector. This crisis has in turn, Federal, state and provincial governments reacting by stimulating their economies with spending on Infrastructure.

Out dominant theme for 2009 is Infrastructure
This is one of several names to look at - contact your advisor

Saturday, December 13, 2008

For GT Blog December 14, 2008

The text below was submitted to a Globe Report on Business blog and I invite your comments

You can tell the news paper business is going though difficult times when business writers are forced to patronize advertisers

The ANDY HOFFMAN Friday's Globe and Mail December 11, 2008 leads with “Ned Goodman wants your battered, beaten and illiquid resource stocks.” The new venture called Ravensden Resource LP hopes the publicly traded fund will become a significant merchant bank to the devastated resource sector.”

In reality this an asset grab strategy pioneered by Sentry Select who only a few years ago created “instant funds” and “instant management fees” by enticing investors in income trusts to swap for a managed basket of income trusts.

Hoffman fails to explain why Goodman also wants the likes of Barrick Gold Corporation, Cameco Corp, EnCana Corporation, Imperial Oil and Petro-Canada. Are these so called “devastated” companies?

Hoffman also fails to address the suitability issue as required by securities law. There is no way a competent advisor would advise a client holding Imperial Oil to swap for a merchant bank holding the likes of Abacus Mining and Exploration Corp. to Zoloto Resources Ltd. (in spite of that juicy 3.2% commission for advising the swap).

I submitted an item to the Toronto Star advising against the swap and it was yanked because I refused to contact Ravensden to balance my views. I am not a reporter. I am an investor and as such am entitled to make investment decisions based of the information contained in the offering materials.
Thanks but no thanks – I will keep my Aurizon Mines shares.

Wednesday, December 10, 2008

For GT Blog December 10, 2008

Bullish on gold?

Then what to buy - gold or the gold stocks?

Last week an "expert" on BNN advised the viewers to only buy physical gold and to take delivery - because you can't trust any form of paper in this crazy world

That had to be the most lunatic fringe advice ever tabled on national television

Here is the scenario if things get so bad any form of paper currency - to include gold stocks, and gold trusts - become worthless.

Your family is the only one in town with gold bullion stashed in the fruit cellar.

You venture out to trade some gold for food and other essentials for living.

An angry mob will ambush you - steal your gold and loot your home for the rest.

Relax - have a beer - the gold stocks are fine

Will that be bullion or paper?

Friday, December 5, 2008

For GT Blog December 05, 2008

There is a slow and growing trend for risk capital returning to equities - Bids return to Research In Motion following the maker of the BlackBerry's call on Tuesday night to cut its quarterly profit estimate as sales slow, margins narrow and a stronger U.S. dollar compresses revenue.

RIM is has over the past few days began to out perform its peer ETF SPDR Technology (XLK) with higher prices in spite of bearish fundamentals - a classic bottom scenario

RIM in US$

Monday, December 1, 2008

For GT Blog December 01, 2008

Canadians have their own distinct identity - unlike all other nationalities.

We quietly stand in line at banks.

We quietly sit in line at the Tim Hortons' Drive Trough


We all own commodity stocks, mining, potash. oil and gold

Dare to be different!

There are signs of money moving quietly into the Health Care sector - Biovail - see chart below is only one example. For other recovery candidates in the Health Care sector consult your advisor or ask my kid.

Ask Darren: email Darren Carrigan

Recovery Candidate Biovail