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Gold/Mining/Energy : Churchill (CUQ), PE of 3!
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To: Michael M. Cubrilo who wrote (71)10/14/1998 4:38:00 PM
From: speculatingvalue  Read Replies (1) of 264
 
Besides the transnationals, most companies don't have a lot of exposure to South America and Eastern Europe. Asia's a different story and I think we are already feeling the fall off in demand from Asia. The Asian crisis is definitely putting recessionary pressure on North America.

On the other hand, Canada has a balanced budget. Interest rates and taxes are likely to fall in the next year and the government is in a position to increase spending to stimulate the economy.

Our largest trading partner, the States, is not sick yet. As long as that is maintained, things will go well. The main danger is that banks and hedge funds that have lost a fortune will spread the flu to the US. I think the US government will inject money to prevent collapses.

Finally, people are no longer putting their wealth in gold. A lot of it is coming to the US which is considered the most stable country. What is good for the American economy is good for ours.

I am more bearish now than I posted the message, though. I believe the year 2000 is scaring a lot of people and they are talking themselves into believing the market will crash because of the year 2000 bug. Whether true or not, it becomes a self fufilling prophesy.

I think both value investing and momentum trading are good strategies. Usually, a company that is profitable will eventually attract attention and receive an appropriate P/E. Sometimes it takes a while.

Right now, I'm focussing on Canadian companies that export mostly to the US. Their expenses are in C$ and their revenues in US$ so they benefit from C$ weakness.
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