The Grandich Letter Dec 1 2007

The markets will trade in more and more of a holiday-like atmosphere as we get
closer to year-end. Because of this, we could see moves exaggerated by lack of
liquidity. For the most part, it’s safe to assume we’re not witnessing any earthshattering
changes to longer term directions.

General Overview –

On the slight chance that General Kudlow, King “BooYah” and the vast armies of
the “Don’t Worry, Be Happy” crowd on Wall Street umpteenth pronouncement that
all is well and it’s safe to go in the water again is wrong (perish the thought), I’m
going to watch this video again http://www.youtube.com/watch?v=QxoP_9W6FC8 and
remind myself of the following saying before I buy into the latest “all clear” signal:


Copper –
It recently tested key support just under $3 and bounced. I do believe it should
eventually break that support as a massive top has formed technically and my
long-term target of $2-$2.50 looks more likely. I do believe that as the price
weakens to a move below $3, one should re-established with some copper exposure.
The $2-$2.50 area should prove to be just a corrective level and in the next 3-5
years a move to new highs above $4 appears in the cards.

Mining and Exploration Shares –
Given the relative strength in most metal prices versus price levels of just a few
years ago, most mining and exploration shares aren’t even close to full valuation
when compared to metal prices of 5, 10 and 20 years ago and their relation to
mining and exploration share prices at that same time. There are many reasons
for this and here, too, I’ll go into it in January. But let me remind you of a month
or two ago when I suggested that we’re likely to see some serious tax-loss selling,
which we recently have. This may continue for the next week or two, but with
more and more compelling speculations making themselves known in this arena,
I’m personally hoping to go shopping (if I can bring myself to step over so much
carnage—some of which I and many so-called experts assisted unwillingly in
creating).


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