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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (91312)	9/30/2007 1:37:47 PM
From: carranza2	Read Replies (2) \| Respond to of 206126

just because commodities outperformed the equities this year doesn't mean they will next year Of course. But I think this does not necessarily follow: in fact, it probably increases the odds of equities doing better as mean reversion If we were to select some commodity index or ETF [DBA or DBC] today and compare its return to the S&P a year from now, it would not surprise me if the commodity vehicle will have handily beaten the S&P. I think the S&P is going to tank next year for reasons we all know. At the same time, increased global demand for commodities, particularly US ag products, will continue unabated. I am kneeling at the Jim Rogers commodities altar. vbg.

To: Wyätt Gwyön who wrote (91312)	10/1/2007 1:18:56 PM
From: Wyätt Gwyön	Respond to of 206126

Suncor, Syncrude may feel less pain from royalties increase DAVID EBNER With a file from Norval Scott September 27, 2007 CALGARY -- The two oldest and biggest oil sands miners might escape part of the burden of increased royalties in Alberta, a fact that has been lost amid the tumultuous public discussion since a major report last week recommended that the provincial government get more money from the energy business. Suncor Energy Inc. and Syncrude Canada Ltd. have individual royalty deals with the government of Alberta, which sets the two oil sands giants apart from the rest of the industry that operates under what's called a generic royalty regime in the oil sands. Suncor and Syncrude, in fact, will likely pay far lower royalties starting in 2009, regardless of how much Alberta decides to hike royalties in general. That suggests the 7.4-per-cent drop in Suncor stock in the past six trading sessions is overdone. Canadian Oil Sands Trust, which holds the largest stake in Syncrude, is down 3.6 per cent. The money paid to Alberta's government by Suncor and Syncrude is a complicated story that began in the 1960s and 1970s, when Suncor and Syncrude built the first oil sands mines. Both companies currently pay royalties on synthetic crude oil manufactured from raw bitumen mined in the oil sands. In the mid-1990s, when the oil sands business was near dead, the Alberta government accepted the pleas of industry to institute a new and generous regime, charging just 1 per cent of gross revenues until a project has recouped its capital costs, a rate that then rises to 25 per cent. Oil sands players such as Royal Dutch Shell PLC operate under these rules. The review panel has recommended that the 25-per-cent rate rise to 33 per cent and also suggested an additional severance tax on oil sands production when prices are high. The government will make a final decision in mid-October. When the generic regime was created, Suncor and Syncrude came to individual agreements with the Alberta government, which expire in 2015. As part of those deals, the two firms are allowed to switch in 2009 to paying royalties on lowly valued bitumen rather than expensive synthetic crude. The companies consider the 25-per-cent rate as part of a legal deal. "These are deals and you have to think twice about the reasons that you're breaking them," Marcel Coutu, chief executive officer of Canadian Oil Sands, said in an interview yesterday. Suncor also considers its contract as firm. The review panel stated that Suncor and Syncrude might have "legal recourse" if the recommended royalty increases were applied before 2015 but doesn't mention the severance tax. Suncor's and Syncrude's deals do not mention a severance tax, meaning they likely would have to pay it if it is adopted. Regardless, when 2009 arrives, Suncor and likely Syncrude will see their royalty burden fall as they begin to pay on cheap bitumen rather than synthetic oil. Suncor had estimated that with oil at $50 (U.S.) a barrel, it would pay about 8.5 per cent of its gross revenues as royalty in 2007-08, which could fall as low as 5 per cent in 2009-2012. Syncrude hasn't yet officially decided to make the switch. reportonbusiness.com

To: Wyätt Gwyön who wrote (91312)	10/2/2007 3:17:17 PM
From: Umunhum	Read Replies (4) \| Respond to of 206126

it doesn't matter that you wouldn't lose 100% of your capital until $53. the point is, you would lose HALF your capital if crude simply fell $10. so then you have to ask yourself how happy will you be with losing half your capital, and at that point you will still have the risk of losing it all. your answer to that is you will bring in the cavalry: I have other capital that I can transfer over if this unlikely event took place. but what is this other capital sitting in? things like COP LEAPS and long positions in COS and SU and CNQ? I have all my money in 6 stocks COSWF, SU, CNQ, ECA, NXY, and PWE. I am heavily overweight both crude oil future contracts and the Canadian Oil Sand companies. I am on very little margin and therefore have the ability to defend my oil futures contracts all the way down to the 30’s by transferring money over from my stock account. if crude drops 17 bucks you can be pretty sure any energy equities will also tank. so you'd be in the position of meeting your futures margin calls by selling out your equities into weakness. I will not be force to sell anything. I will go heavily into margin if this highly unlikely temporary event takes place. my aim is to be on the other side of this trader. i am typically 40-60% equities (40% now), with the rest in cash and other positions which are non-correlated to the equities. right now most of my cash position is in JPY. i also have positions which are bets on the unwinding of the housing bubble and credit bubble. I would rather stick with oil. I am extremely confident that oil prices are going over $100 in the next 14 months. there are few things i am sure of in investing, but one of them is that energy equities (and commodities) will again face a brutal unwinding that will result in huge amounts of distressed selling and provide good entry points for those with the capital available at the right time. I think the next move is up. there are certainly scenarios where huge leverage on the commodities will provide the best results I think $20 is adequate to defend purchasing a December 2011 contract from margin call. I don’t think that we will see the December 2011 contracts trade at $53 ever again. All the news that I have been reading over the last two years has been bullish for crude prices. I can’t remember when I last heard an intelligent argument for lower crude prices going forward. I’m at the point where it is not a question of whether oil prices are heading higher. It is when will they break $100 and how high are they going to go? Here is an interesting article that I think you should read: except - Six of the largest oil suppliers to the U.S. are poised to significantly cut exports by 2012.....The forecasted cuts by Mexico, Saudi Arabia, Venezuela, Nigeria, Algeria and Russia are the subject of a keynote address that Jeff Rubin, chief market strategist and chief economist at CIBC World Markets will deliver at the firm's Industrial Conference Oct. 2 in New York City. money.cnn.com The conference call: veracast.com password: industrials2007 Peak exports is not rocket science. It is just extrapolating the currents trends into the future. It is obvious to me that the price of crude oil is about to go up significantly.