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Dec. 7/07
" The Perfect Storm " - a much over used expression to denote the gathering of forces - and in the next few days they may be gathering Christmas cheer for the AMP Porfolio. There are several major events taking place now - and with such extensive and positive media that the good news of a market rally will reinforce itself. These " forces " are :
1) Mortgage relief in the U.S.
2) U.S. job numbers report
3) The Federal Reserve Interest Rate decision
A) Year End Rally Lift Off from Bush -White House helps itself and the market
The Plan will assist less than a third of those caught in the reset problem
and subprime credit crunch - but Wall Street was looking for good news.
Mr. Bush said the plan, hammered out by the U.S. Treasury Department in talks with mortgage industry leaders, was not intended to “bail out” lenders, speculators or those who knew they could not afford the homes they bought.
Officials fear 500,000 Americans are at risk of losing their homes as $367-billion (U.S.) worth of adjustable-rate subprime mortgages reset to higher interest rates in 2008 and 2009.
The Mortgage Bankers Association said foreclosures reached a record high in the third quarter, with 1.69 per cent of loans outstanding in the foreclosure process. Late payments on mortgages hit the highest level since 1986.
The Bush plan is not going to do much but - it sounds terrific.
The Result - DOW up 175 Points
Almost all financials rebounded.
Is this a bottom?
The AMP Misery List rocketed - so you may be inclined to pick up a few of the living dead - but I'd prefer to wait to see if they will survive.
Toll Brothers reported its first loss in two decades - but because the news was not horrific - it went up - and as a consequence other homebuilders went up more.
However;
Millions will face foreclosure
Foreclosed housing will drag down all prices in the areas where a surplus of homes is on sale .
This will last for the next two years.
AND to confound the issue of a market rally in the midst of a credit crunch -
A2 - There is More Good News to Lift the Market:
Friday - if the U.S, employment report is about 100,000 or more jobs created in November :
The market will rally when the report is released because -
it means a lot of folks found jobs and kept jobs - and can therefore keep their mortgage payments and do Christmas shopping at the malls.
Thus - similar to Toll Brothers - if the news is not horrific ( low job creation ) the relief will be palpable .
A3 More good News Expected Tuesday, December 11
If the job creation numbers are not super terrific - the Federal Reserve will lower interest rates on Tuesday because the credit crunch/ subprime worries continue - and will continue.
A rate cut of 25 basis points ( one quarter of one per cent ) will lift the market again. And the market will look forward to more cuts in the new year.
Cheap Money fuels the stock market.
Cheap money will bring renewed inflation which will support commodity prices.
B) Oil to $100
according to the legendary T. Boone Pickens -
``You're going to $100,'' he said in an interview in Dallas. ``There's no question about that.''
Crude oil prices rose after the Organization of Petroleum Exporting Countries, rejecting calls to increase output, decided to keep its production targets unchanged. Oil was down for the day after an Energy Department report showed that U.S. fuel stockpiles rose. Futures fell 86 cents, or 1 percent, to $87.46 a barrel at 2:30 p.m. as floor trading ended on the New York Mercantile Exchange. Prices touched $90.39 in intraday trading. The OPEC decision ``went the way I thought it would,'' Pickens said, adding that OPEC doesn't have the capacity to continue to raise production.
Global crude demand is about 88 million barrels a day, and supply is around 85 million barrels a day, he said, adding that the only way to affect demand is with higher prices. Global oil demand this year will average 85.7 million barrels a day, the International Energy Agency said in a report on Nov. 13. The Paris-based agency is an adviser to 26 developed nations.
Oil back to $90
Pickens may have a great sense of timing as oil rose about $3.00 a barrel today ( Thursday , December 6th ) as this is written.
Crude oil rose more than $3 a barrel in New York after U.S. inventories dropped as refiners prepared to meet heating demand.
Supplies fell 7.91 million barrels to 305.2 million barrels last week, the biggest drop since September 2004, the Energy Department reported yesterday. Crude-oil in New York has declined 9.1 percent from a record $99.29 a barrel, reached on Nov. 21, because of an economic slowdown.
``The focus is shifting to supply in the face of the approaching winter,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. ``Crude-oil inventories posted a big decline yesterday. In spite of the big build in product stocks the year-on-year deficit in heating oil is massive.''
B2 ) The AMP .North Sea Four
I cannot explain why Antrim Energy is not doing better.
It has discoveries.
It continues to drill.
I continue to hold a good sized position - but if your nerves are frayed look at selling 25 % and switch to Oilexco. " Sell til you can sleep."
Oilexco ( OIL)
Oilexco staged more than a bit of a recovery today - up .74 to $14.79
We are still waiting for the stats on Huntington- which will propel the stock higher - I hope.
Antrim Energy down . 20 to $4.03
Bow Valley up .23 to $6.56
Sterling Resources up .01 to $2.34
Suncor ( SU ) production
We also benefited from Suncors recent rise
CALGARY, Dec. 6 /CNW/ - Suncor Energy Inc. reported today that production at its oil sands facility during November averaged approximately 266,000 barrels per day (bpd). Year-to-date oil sands production at the end of November averaged approximately 236,000 bpd. Suncor is targeting average oil sands production of 240,000 to 245,000 bpd in 2007.
On a monthly basis, Suncor reports production numbers from its oil sands operation in order to provide stakeholders with a more timely review of operational performance. These numbers are preliminary and subject to adjustment. Monthly totals may differ from year-to-date total due to rounding, the impact of sales and changes in inventory. Production volumes will be confirmed when Suncor's fourth quarter results are released on January 22, 2008.
C) Timminco ( TIM) - extends a two week rally of its own
Today up .55 to $16.75
Speaking of great timing - yesterdays blog spoke of my trading strategy for the AMP Portfolio - using Timminco as the example. This article is available in the archives.
I saw the recent news coverage as very positive in bringing in new investors - just as Peter Hodson had said was required. Today Timminco continued its rise adding $. 55 to close at $ 16.75
U.S news of Merril Lynch financing a new silicon supplier helped most sun power related stocks and TIM is the " go to " name in Canada.
Volume was also strong at 1.6 million shares . I am not a technical analysis follower but increasing price - accompanied by good volume signals the rise will continue . Review yesterdays blog ( in the archives ) - not only for TIM but any of our AMP Portfolio.
We may be benefiting from increased chatter about solar in the U.S. press as the Congress and Bush debate alternative fuels and measures to encourage alternatives. In any case millions of shares have been purchased recently and these new investors are seking a return - more than a few cents over their $16.00 purchase base. With price targets of between $40 and $50 dollars in the next 18 - 24 months we have a great opportunity to accumulate a position over time .
AS IN ALL our AMP Portfolio positions :
Accululation follows the Company executing its development, production and profitability plans.
D) Apprentice Millionaire Program Portfolio
"Building Your AMP Portfolio
Our Best Ideas for 2008 "
AT A MINIUMUM - if you are investing thousands of dollars in a particular recommendation - invest $35 bucks to develop a portfolio plan. That's common sense - and common sense is highly valued because it is uncommon.
E ) Denison Uranium
The planned new mine is an example of a producer expanding at a time of market demand exceeding supply
The AMP has Denison and Paladin as a preference for the production over exploration juniors. Here is part of the news release:
Denison Mines Corp. ("Denison") (TSX:DML)(AMEX:DNN) is pleased to announce the formal decision of the joint venture partners in the Midwest uranium mine project to proceed with the development of the project. The partners in the joint venture comprise AREVA Resources Canada Inc. ("Areva") (69.16%), Denison (25.17%) and OURD Canada Co. Ltd. (5.67%).
UUU ( Uranium One is also so cheap now that we can consider it for the long term value of its production. The current price is a reflection of the mark down when it cut back its production forecasts.
You can develop a basket of these juniors and consider Pinetree Capital for its diverse portfolio of junior exploration and mineral plays.
F) Gold
Happily for the AMP Portfolio our gold stocks responded to the commodity going back to the $800 an ounce level.
We are not targeting gold for a rise to $1000 - although that would be welcome . we have targeted a basket of growth in production plays and aggressive management :
Yamana ( YRI) - up .28 at $13.28
Western Goldfiedls ( WGI) - up .10 at $3.53
Scorpio ( SLG) - silver and gold - up .07 at $1.33
and
Centamin Egypt ( CEE) up .02 at $1.25 - on 4 million plus shares.
Note the trading pattern - volume far above average.
Today the overhang of shares available has been reduced - watch to see if the selling price can move and stay over $1.30
Final Notes
Christmas and Charity - can you spare a few moments and perhaps a few dollars ?
UnitedHealth Group Inc.'s former Chief Executive Officer William W. McGuire agreed to give back more than $600 million in benefits, mostly stock options that investors claimed in a lawsuit were illegally backdated.
Other past and present officers have relinquished about $300 million, UnitedHealth said today in a statement announcing settlement of the lawsuit. Attorneys for pension funds in Ohio and other states that filed the suit said current CEO Stephen J. Hemsley is paying $240 million. The company said he voluntarily gave up that sum a year ago and the settlement didn't alter that commitment.
Our Goal is to make so much money Hilary Clinton invites us to the White House.
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