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Gold/Mining/Energy : A Deadcat Bounce -- Ignore unavailable to you. Want to Upgrade?

To: Ed Pakstas who wrote (80)	1/11/1998 11:57:00 PM
From: Tommy D	Read Replies (1) \| Respond to of 97

I know, it is starting to get real scary. I just checked Yahoo and saw that HongKong was down almost 11% and the index is below 8000. Stranglely enough though, Japan has not been hit that hard and I had expected that they would have a very tough Monday and Korea is up. In fact Korea is up about 25% from the lows in Dec. At some point, the value inherent in some of the stocks will cause a bounce in the Canadian markets. This leadership might come from the resource stocks. Segments of the market that have lead the market such as technology have grown based upon the potential growth in earnings and so if the markets in Asia die, that will directly affect their value as the P/E going forward will drop, perhaps significantly. Resource stocks trade based primarily upon cash flow but there is normally a large realizable value in terms of proven reserves which don't disappear with a drop in the Asian market; the reserves may just stay in the ground a little longer but there is good inherent value. This is particularly so for large cap resource companies. At some point investors( and particularly foreign investors) will recognize this inherent value and move to pick up Canadian companies which I would consider to be Crown Jewels as many are trading at their book value, let alone considering the inherent value of the resources in the ground. I have a number of junior mining and oil stocks and its disheartening to see the overall market drop because I do expect some good news on the individual stocks but I am not very confident that in the short term, the stocks will react very well. Lets hope that some of the blue chip companies that report this week in the U.S. show some good results and the market takes some comfort from the results. Regards TommyD