₪ David Pescod's Late Edition November 2, 2007
GOLD: $808.50 +$14.80
CRUDE OIL: $95.93 +$2.44
CANADIAN $: $1.069 +0.013
Take a look at some of these charts and imagine that you’re back 5 years ago trying to predict where oil, gold and the Canadian dollar might be. If you’d come up with some of these numbers such as $96 oil or over $800 gold, people would’ve said you’d gone over to the silly side.
But there you go, it’s a different world out there as commodities are needed by all sorts of economies that are chugging along and suddenly need dishwashers, cars, motorcycles and energy to power them all. Which of course is the good news, the bad news is if you’re producing lead and zinc in a Canadian mine, or cars in a Canadian factory or trying to make wood in a British Columbia forest, your costs with the Canadian dollar have gone through the roof, your ability to make a buck despite of the high commodity prices has been compromise by a Canadian dollar that has flown just as much as commodity prices.
Suddenly a Canadian investor looking for maximum leverage
is going to have to have his maps of the world open looking for ways to take his expensive Canadian dollar and invest it for maximum leverage in other areas of the world. Sometimes those adventures don't always have fairy tale endings.
CGX ENERGY (V-OYL’U) $3.85 +$0.31
No there’s no news out on CGX, but it still makes a big move today and yes this has been a story we’ve been following now for many many years ever since the border dispute between Suriname and Guyana erupted. Obviously some big buyers in the market have decided they want it although yesterday Kerry Sully suggests that he’ll be busy for quite awhile, talking to majors hopefully such as Exxon, Repsol and the like, the big companies that have access to big rigs that can drill up to 19,000 feet deep.
Which is the good news. The bad news is they probably won’t be drilling until sometime until 2009. Obviously the markets can’t wait, and in the meantime we are working on our “Oil and gas plays that could change your Lifestyle,” a portfolio of 5 or 6 gas plays that will be drilled a little before CGX drills over the next 6 to 12 months with admittedly high risks but also very large potential returns. So far on our list goes; Corridor Resources, they should be spudding any day now, their Deep Dawson Settlement play which would affect dramatically a company that’s already had a nice stock run over the last 2 years.
Also on the list goes Petrolifera although their project in Peru now looks like it wont be drilled until mid to later next year. Vulcan for when their play takes place in Newfoundland and its funny to watch the different plays in the North Sea. There it seems if you miss a few in that high risk area you’re a bum and you hit on a few you’re a hero...look at Oilexco with their big discovery in Huntington has people of already forgotten the large number of dry holes they had.
Little Gulf Shore will be spudding shortly and so far there are zero for two. If they get a hit it will be interesting to see how quickly they go from being zero’s to hero’s. They’ll be others in the portfolio too and we hope to have it out in a week.
MERRILL LYNCH (NYSE-MER) $56.65 -$5.54
Merrill Lynch, the big American broker sold off the most in 6 years today according to Bloomberg after Deutsche Bank said “the worlds biggest brokerage may write down an additional 10 billion dollars for losses on sub-prime assets.”
That’s the sector that’s created such a concern in financial circles and now around the world. Meanwhile, it’s interesting to see the chief executive of Merrill Lynch Stan O’neill is expected to step down shortly and instead of simply being fired for his responsibilities in this mess, it looks like negotiations are ongoing and the suggestion is made for getting Merrill in such a mess he may be rewarded with a package of as much as $150 million.
No wonder the average person has trouble relating to what’s going on in Wall Street…I guess Merrill Lynch customers will know where their commissions are going for the next few years.
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