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Gold/Mining/Energy : Imperial Metals (IPM.T) -- Ignore unavailable to you. Want to Upgrade?

To: Italian Investor who wrote (283)	3/30/2010 3:18:34 AM
From: refugee investor	Read Replies (1) \| Respond to of 1366

I don't know what to think about nat gas. I gather fracking uses a lot of water, and there is plenty of that in Canada, but less in other places like Texas. So maybe the Barnett shale will not be the silver bullet everyone is hoping for. If people think gas is going to be plentiful and cheap they might start using more of it--trucks and power plants--just in time to realise that it is not as easy to extract as was hoped, which would make the price go up sooner or later, but maybe it would take a few years. I bought some Paramount Energy (gas outfit) last year because I thought it was cheap, but I am less sure now that they will be bailed out by higher gas prices. I would be interested to hear anything about Magellan. Is it a pure Edwards/value play as far as you are concerned, or do you have insights into the co.? Will be adding to my petrie account pretty soon. Two possibilities, Chaoda, which had gone down last time I looked, and Fiat, more of a spec play, the idea also from Oldfield. I rented one last year and was pleasantly surprised. Oldfield commentary from Feb.: The car companies have many characteristics which are unappealing: they are capital intensive, the business is cyclical, the level of debt is often higher than average, the unions are relatively powerful. They are far from the quality category into which much of our global portfolios fits. But they can, on the other hand, in part precisely because of these characteristics, descend to unreasonably low levels of valuation, and then give an unusually high potential upside. The recovery can be dramatic. In the last thirty years, we have invested successfully in Chrysler (in the 1980s), Renault (in the early 2000s) and General Motors (in 2005); and we have now bought Fiat, a poor performer in its first month in the portfolio, down 15%, but we believe significantly undervalued. Something frequently said about General Motors is that it should make cars which people want. This is an excessively sweeping criticism since, whatever their faults, GM’s sales have showed over the years that plenty of people do want their cars. Of Fiat, however, this criticism could not be made. In Italy Fiat has an almost iconic status; and it is also hugely successful in Brazil where its market share is around 25% and it is highly profitable. The share price has recently fallen because of concerns that the Italian government will bring to an end the incentive for scrapping older vehicles. We think that Fiat Auto, including the Brazilian operation and luxury brands such as Maserati and Ferrari, account for just about all the current share price. In addition there is CNH, the second largest agricultural machinery business in the world, and a number of other interesting subsidiaries. Fiat also has an option to acquire the US manufacturer Chrysler. Fiat now owns 20% of Chrysler and this can be increased to 35%, at no cost.