Peter Grandich Talks Gold

The Giants squeaked one out while the Jets didn’t even make it to Turkey Day before basically being put out of their misery. Forty years as a fan and if not for a tremendous blessing to become friends with the best player I believe ever worn the green and white, I would have to say being a Jets fan has taken years off my life. How many more years can a Jet fan endure the phrase, “Wait til’ next year?”

Gold is flying in Asia. Outside of a rather small group of professionals who have remained strong advocates through thick and thin (I would hope I’d be included in that camp with Jim Sinclair, Bill Murphy, GATA and a few others), this move has left both perma-bears, former bulls (who became weak-kneed below and at $1,000 an ounce) and much of the financial media in the “dust.”

My upside target of $1,200 now appears to be within sight before years-end (if it gets to $1,195 I won’t shed a tear).

Many ask why has this occurred? The better question is to ask why did so many miss it?

I’ve compared this move above $1,000 to the U.S. Stock Market breaking above 1,000 in the early 80s. For several decades, the stock market was capped around 1,000. Stocks became so out of favor that “Business Week” magazine wrote a famous front page heading entitled, “Stocks are Dead.” An unknown soothsayer at the time named Robert Prechter Jr. predicted 3,000 on the DJIA. Most thought that was crazy. Well, we all know what happened.

I’m not saying gold is going to $14,000 like the DJIA did, but I do believe there are some commonalities. For starters, the DJIA traded between 700 and 1,000 for quite awhile and when it finally broke out, it ran sharply while most kept saying it had to come back just as sharp. Such has been the case after gold traded between $700 and $1,000. I and some others argued that this set gold up for a run to $1,200-$1,300 when we got and stayed above $1,000. Most have missed it and keep calling (and hoping) it comes back to them.

Another similar factor is that in the early stage of the DJIA run, a few highly respected money guys turned very bullish on equities after years of bearishness and/or near total avoidance of equities. Recently, such well-known “financial” experts like Steve Einhorn, Paul Tudor Jones and John Paulson have become big gold buyers/believers.

And one more common ingredient, equities, went from lack of ownership by the public-at-large to the absolute favorite asset to own. While gold remains hated by the vast majority who sell and report on financial assets, as well as by some perma-bears who will become as unimportant as the Number One perma-bear of the late 1990s, Andy Smith, gold is/has become an asset class to many outside of North America.

There are also several other long-term bullish factors like the fact that Central Banks, who used to only know one way to go when it came to gold – sell, are now buyers. Mine supply continues to be limited and hedging, the once cut-your-nose-to-spite-your-face move by mining companies, is now a dead issue.

Is it too late to buy gold? It’s no longer cheap. But if the craze for equities proved anything for almost 25 years (interrupted by a few sharp corrections and bear markets), it’s that the boat needs to get pretty filled up before it finally sinks of its own weight. The fact that gold is still either hated, ignored or misunderstood by most, especially in the U.S., makes me believe the long-term end is nowhere in sight. Is a correction coming? Absolutely, but not before those perma-bears who have been wrong for seemingly as long as the Jets haven’t been to the Super Bowl, are put out of their misery. Forgive me if I don’t attend their funeral.

We’re about to enter one of the best seasonal periods for equities. This coming week tends to be up for U.S. stocks. I do believe between now and year-end may come the long-awaited time for me to dust off my bear suit. Stay tuned.

Remember, the U.S. Dollar Index needs to at least close above 76.50 before any thought of a dollar bear market rally can become legit. The very fact so many people in recent days are talking about a rally can either make it a self-fulfilling prophecy or actually set us up for another down leg. We live in very interesting times, no?

Source

Pescos Talks Stock

BANKERS PETROLEUM

(T-BNK)

WAVEFRONT TECHNOLOGIES (V-WEE)

AMAZON MINING

(V-AMZ)

VENTANA GOLD CORP

(T-VEN)

Our old favourites and the new ones

It might be a little early for a year end review, but

maybe considering the year we have all gone through, and

the bruises we had, why not?

For much of this year we have focused on a trip we

made to Albania back in February/March and saw first

hand the enormous assets and facilities of Bankers Petro-

leum.

In that enormous valley as far as the eye can see were the

old rigs and derricks of the days that the Russians and

Chinese ran at one time, assets that have been taken over

by Bankers and are introducing new western technology

and we should also point out are cleaning it up.

Abby Badwi, Doug Urch and their team comprise some

of the same team that were so successful at Rally Energy

in Egypt, and appear to be having the same success in

Albania.

Already a five or seven bagger from the depths of the

end of the world of eight or nine months ago, look for lots

of news in the coming weeks such as new production

numbers (well that shouldn't be much of a change) to new

budgets for next year (that should be a big change) and

new resource numbers in a few months .

Many expect that they are sitting on ultimately 6 to 9

billion barrels of heavy oil , but how much of it will be re-

coverable....and will we see a take-out offer in the next 12

months

Wavefront was another story we wrote up many times

and whether its’ revolutionary technology was as good as

expected. Jim Letourneau is a hydro-geologist and editor

of the Big Picture Speculator and had been close to the

company and a big believer of the potential. We wrote up

this story countless times while two mutual funds south of

the border had been big sellers of 15 million shares or so..

Now several companies have the equipment, but after

the stock has been a four bagger it now needs some size-

able contracts to justify its current sizeable market cap.

The easy money has been made.

Encana now has almost 18 months experience with

the new technology so an order of size is expected from

them, it would be the good House-keeping seal of ap-

proval...should it not appear over time, that would not be

good. The next 6 weeks or so are important.

With gold doing so well it's been interesting to see so

many gold stocks from biggie American Barrick to GBG

doing almost nothing!

Blame that on so many gold companies issuing so

many shares that many gold stocks have little leverage

left...

But thanks to Canaccord mining guy Nicholas Camp-

bell Ventana and Keegan have soared and bottom Fish-

ing guy John Kaiser had a great idea with Brett Re-

sources ( and he sure had some great ideas on rare

earths).

As we look forward it is time for new favourites.....

and also while there were huge hits with some resource

companies that survived the debacle of last year it will

probably be tougher to find the new winners, and re-

wards won't be what they were...or maybe they will.

In the oils, Sterling Resources is the top pick of Kevin

Shaw of Wellington West and he has certainly been one

of the top pickers of the past year. His published re-

search on Bankers was probably responsible for it tak-

ing flight and Painted Pony wasn't a bad idea either.

When asked if he could only buy one stock today what it

would be Shaw says Sterling, but there is a long list of

other analysts saying the same thing....after a time of

quiet, SLG now has a lot to do in the North Sea starting

shortly..

For another high reward (we hope ) play in the north

sea that no one has heard of yet, Excite energy will

hopefully do just that as they start drilling in Feb / March

on a large target already drilled 5 times but now looking

at commercial production and little Xel owns 100% of it,

at least so far.

How management raises some money, gets partners,

or sells it and hopefully attracts attention will be inter-

esting to follow because at this point very few know this

story...too bad.

With so many balls in the air, one money manager

suggests in the coming 6 months the story could be a

mere 50% return to a 500% return depending on man-

agement's ability to get things done.

That is a rather wide range , and we should point out

that there is always a chance for things to go terribly

wrong , but an adventure none the less.

Speaking of adventure, our recent trip to Brazil was an eye-opener .The country is booming and I now

know why there is the B in the BRIC countries. A big chunk of the boom in Brazil is due to agriculture,

35% of their economy and they are out to feed the world. As far as the eye can see are coffee plantations,

sugar cane, eucalyptus trees, oranges you name it. And they have the perfect climate for farm-

ing...constant weather and good rains mean that a farmer in brazil might get 2 and a half crops a year

while many in North America will be lucky to get one decent one.

What they lack in Brazil is fertilizer...93% of it has to be imported and because of the constant leeching

of the soils by the rains lots of fertilizer is needed.

If Amazon resources and its’ huge verdete deposit has the answer , this may be the adventure of the

There are plenty of hoops to jump through on this process, including drilling to size resources, to

see if the thermo potash process actually works, and finally real trials on real fields mean for a very inter-

esting year ahead. This was John Kaisers idea originally , and he had some very lofty potential goals for

the stock should it pass all the tests...very lofty. A high risk adventure for the gold bugs.