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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: marcos who wrote (25098)	11/6/2002 6:42:26 PM
From: EL KABONG!!!	Read Replies (1) \| Respond to of 74559

Hi again marcos, I don't like speculative juniors myself. Not that there's anything grossly wrong with them, it's just a personal preference to stay within sectors where I have more than just passing knowledge of the various companies and their stocks. I'll leave mining stocks to the people that know them well. Let them prosper, and I'll just slap them on their backsides and lead the cheers from the sidelines when everything goes well... <g> As far as the price of gold goes, I think it should be much higher right now, say around $360 to $375 (US$), but some mighty suspicious trading activity in gold prices this past summer has me leery that someone or some group(s) wants to keep a lid on the price of gold, at least until short positions are unwound, presuming of course that it's possible to unwind their short positions. To me, the situation is reminiscent of the Long Term Capital Management bail-out from the late '90s, and if my guess is true, then there's some mighty powerful players out there that can and will keep precious metals' prices suppressed. If there is a real estate bubble in the USA, it is most certainly not nationwide in scope. Rather, there are some specific and somewhat easily identifiable regions where the prices of homes appears to be at odds with the ability of the local economies to support those higher housing costs. Unfortunately, should a real estate bubble burst, the downward pressure on housing prices would carry-over even into the areas that are not overpriced. So, in my mind, real estate investments at the moment carry significantly more risks than they did even as recently as 3 years ago. re: Bombardier... I still view BBD.A/BBD.B as the single best current investment available in Canadian stocks. But (there's always a "but", isn't there? <g>) the caveat is that Bombardier looks much better for the long term than for the short term. That said, yes, I could agree with your friend that BBD.A/BBD.B could go as high as $9 or $10 (Canadian) in the short term, but could fall from grace just as quickly on any further bad news in the airline industry. Nearly 87% of BBD's operating profits come from the aerospace division, which also accounts for 65% of the gross revenues. So any marketing slowdowns in aerospace can have a disproportionate impact on the bottom line. The rest of the business (recreational products, transportation products and financial services) account for the remaining 35% of revenues, but only 13% of profits. Bombardier recently lowered their 2002 numbers for revenues and earnings which, along with the problems they have had in the transportation division, has served to drive the stock price into a steep downturn. Indeed, all of the charts show that both the long term trend (200 day moving average) and the short term trend (50 day moving average) are going south. However, both the 10 day and 20 day moving averages have recently come to life as the price of Bombardier stock has risen from its still recent lows of $4+ (Canadian). Complicating an investment by investors in the USA is the fact that BBD.A/BBD.B does not trade on a USA exchange, so any profits realized by investors in the USA are subject to both the US capital gains taxes plus any Canadian foreign taxes. The cost of the additional tax must be taken into consideration when calculating the upside/downside ratios and other risk factors. That said, if BBD.A/BBD.B were to trade on an exchange here in the USA, I'd risk a small amount on them right now. (If a foreign stock trades on a US exchange, either as ADRs or USA registered stock, then the foreign tax obligation disappears, to the best of my knowledge.) If I were an executive with Bombardier, I'd recommend to my BoD that they do whatever is necessary to list the stock on a USA exchange. I think that BBD is missing the boat by not having their stock available in the mainstream USA markets. But what do I know??? <g> BBD's long term growth prospects are excellent But, before growth can happen, the airline industry must stabilize and the major economies of the world must recover. KJC