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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Grommit who wrote (30987)	5/16/2008 1:21:32 PM
From: E_K_S	Read Replies (2) \| Respond to of 78750

Hi Grommit - I would say that the huge run in oil is mainly due to the weak $US dollar. Maybe as much as 18% of the 26% gain is from a weak $USD. The chart below compares the $USD to $Euro, $CAD, $BRL and XOI. Notice that the XOI tracks the currency gains especially in the $BRL (Brazil Real). 10-18% of this year's gain is due to the weak $USD. The lagger might be that of the $CAN and that may be where the future value opportunities might be found. finance.yahoo.com^xoi;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined Other than PBR, most of the other integrated oils track the performance of the XOI except XOM and PCZ. Of the list presented on the graph, PCZ may be undervalued to the others by 5%-10% especially if the $USD falls further to the $CAN. finance.yahoo.com^xoi;range=1y;compare=^xoi+pbr+xom+cvx+bp+cop+pcz;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined Based on the $US and $CAD, many of the Candian oil companies and Oil Trusts appear to be undervalued. The $CAN is only up 10% to the $USD but the XOI is up 19%. Petro-Canada (PCZ) tracks the XOI but the of the Candian Oil Trusts I follow ENERPLUS RES FD (NYSE:ERF) and PENN WEST ENERGY TRU (NYSE:PWE) finance.yahoo.com have underperformed perhaps as much as 20%. finance.yahoo.com^xoi+pcz+pwe;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined I continue to hold all my integrated oils and Candian Oil Trusts and have added some new money to PBR. Based on the above, I should add new money to more of the Candian Oil Trusts and start a new position in PCZ. EKS

To: Grommit who wrote (30987)	5/16/2008 1:27:21 PM
From: Paul Senior	Read Replies (2) \| Respond to of 78750

There are at least a couple of pitfalls to be diversified or over diversified (depending on one's perception). The risk of inadequately following a particular stock (too little weighting, failure to understand company, etc.) and the risk of becoming sloppy about a particular stock that moves significantly (As: It's only such a small part ($) of the portfolio so so-what if it drops 50%). I want to reiterate though, 1)It is only received wisdom that the larger the number of stocks held, by that fact, the greater one will approach average results. That is not necessarily so, imo. I find it's a function of dollar-weighting within a sector and being in the appropriate sector at all. So, for example, as for oil/gas stocks, I find the important decision is whether and when to be in any or not. Whether a person is in for 1-2 or 15-20 or 20-50 different positions, this is a risk/reward issue. Where for me, I am on the side of having less business risk with individual companies (a risk which occurs with picking just 1-2 companies) which is offset by my not going for the greater or greatest rewards by attempting to define, seek, and pick only 1-2, the "best" opportunity. 2) There's way too much testosterone emphasis about "beating the market". There are studies out that show many/most? individual investors aren't even getting 'average' results long term (Ibbotson 10%/annum average). For somebody old like me, looking back, with perhaps now a more acute sense of compounding, I say somebody who can invest regularly and who can get 10% compounded annually over a few decades -- that person is going to be okay financially at the latter part of the lifestage. I realize of course younger people want it NOW, so view "average" results as unacceptable. Looking back though...a different story. Imo, in my experience.