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

To: TobagoJack who wrote (33862)	5/18/2003 1:48:55 AM
From: EL KABONG!!!	Read Replies (4) \| Respond to of 74559

Hi Jay, I believe the potential rise of gas price will overwhelm any possible rise of CAD vs USD, and so I do CanRoys in an admittedly very conservative fashion, so far. IF the price of natural gas rises (as expected) and IF the demand for natural gas increases (as expected) and IF a severe shortage of natural gas develops due to a lack of developed new sources (as expected), THEN your expectations for Canadian Royalties makes sense. But I'd counter with the argument that the same investment in a USD denominated source would probably be better in the short term than the Canadian Royalties due to the currency problems. You could offset the currency risk by hedging currencies, but (IMO) the currency risks are greater than any risks in either the trusts or USD denominated sources. Too many ifs at this point for my liking... I'd suggest that your friend's argument regarding production costs of product in a domestic currency for sale in US dollars makes as much sense when discussing gold miners as it does when discussing many other products. French clothing, German technology, Italian foodstuffs, Japanese electronics, etcetera are all produced under a different domestic currency that is currently rising against the US dollar. Maybe this is the reason behind the current bear market rally? If so, then the rally likely has more leg(s) remaining, and the correct short term play is to go long the US markets. On the other hand... KJC