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Strategies & Market Trends : Ride the Tiger with CD -- Ignore unavailable to you. Want to Upgrade?

To: Stephen O who wrote (34552)	10/5/2005 7:59:27 PM
From: TheSlowLane	Respond to of 313058

Hey it must be National Breakwater Resources Appreciation Day. Here comes D. Pescod with his two bits: *BREAKWATER RESOURCES (T-BWR) $0.39 +.005 ZINC: $.657 +.0146 From time to time, we get some pretty good feedback with ideas and how about this three year chart on Breakwater Resources? As someone points out to us over the last three years, had you picked up Breakwater in the late summer/early fall and then sold it sometime around March, you could have made anywhere between 50% and 80%. Not bad work! First of all a little background though. Breakwater is involved in the base-metal mining business with mines in North America and Central America and has a lot of stock out. It is also probably the most leveraged producer to the price of zinc. As the chart of zinc to the left shows you, zinc prices have been going up. Once again, if you are into the commodity cycles, you’ll know why—growing demand in China. According to the ILZSG, China’s demand for zinc has grown at 10.4% in 2004 and is expected to do close to that in 2005. The main reasons for China’s increasing demand is automobile manufacturing, appliance manufacturing, road and railway construction plus housing. China accounted for 8% of global zinc demand in 1990 and in 2004, it accounted for 23%. For a good look at Breakwater, go to their website where they have an investor presentation, part of which shows you that the zinc market is probably in the best shape it has been in, in more than 15 years and the zinc price certainly seems to be going the right way and not a lot of big new mines coming on stream. What about this fluctuation we see in the stock and should a person be playing it? We go to someone who’s gaining quite a reputation for looking at charts and making decisions on yay and nay and that’s Jim Letourneau. He has been publishing for over a year, the Big Picture Speculator (www.bigpicturespeculator.blogspot.com). When we talked to Jim we are reminded that we chaired a panel at Joe Martin’s Cambridge House show back on January 24th and part of that presentation on mining and some oil and gas stories, was asking some of the people on the panel for a stock pick. At that time, Letourneau picked Leader Energy, which at the time was $1.55. Today it’s yours for $4.25. Not bad for six or seven months work, don’t you think? Like I said, that’s why this guy is picking up a following. Back to Breakwater. Should a guy be playing this? Apparently, yes! Letourneau admits to us that he is a big believer in the commodity cycle and that we are just on the first of many legs, just on one of many cycles heading up and yes, he just happens to own some warrants himself on Breakwater!! When we ask him to look at the charts and set some targets, he tells us that we should be able to see $0.80 on Breakwater by March (which would make for a double) which in just five or six months, would be a pretty decent return. As we’ve mentioned, he owns the warrants and he suggests for those looking at a longer term in the commodity cycle, he wouldn’t be surprised to see this story hit $2.00 or $3.00, and hence why he owns the warrants.