I traditionally never like any of these “canned” ways to buy stocks. The reason that I don’t like them has nothing to do with their effectiveness (some of them may have merit), but it is more to do with what happens when they do prove to have any kind of validity (i.e. everyone follows them, and the reason why they were a good deal becomes non-existent).

I do like to watch the Dogs of the Dow, however, as this often a way to find a decent company at close to its Maximum Historical Dividend Yield, which often is a great long-term entry point. One does have to be careful, however, as even though these are established companies, there are often ones that are "Dogs" for a good reason. A case in point is if one were to follow this rule a couple of years back, you would have ended up with General Motors stock….

First, many thanks for the kind words that I received. It has been an awfully long time since my last article, due to opening up a new business.

I was reading the article on the “IEA Whistleblower” who claims that the IEA has been intentionally “underplaying” the onset of Peak Oil, and that the likelihood of the world’s Oil Supply keeping up with the upcoming demand is small. Most of this demand will come from the developing world, including countries such as India and China, but also Africa, the Middle East and Latin America.

If you talk to most economists, there is a general agreement that the US dollar is due for a big drop in the somewhat near future. Many have been predicting this for a while now, but there seems to be more and more momentum towards this feeling.

The reasons aren’t new:

Seems like a decade ago that natural gas hit its highs in 2008. Natural gas closed at an unbelievably low price of just over $3. With the winter heating season not starting up again for another few months, natural gas seems destined to fall below $3, barring some miraculous event.

How bad is the current situation for natural gas? Here are some grim stats:

About 3 months ago, I was advised by a long-term friend to take a look at BHP Billiton (BHP) as "the best single way to play the Resource space". He further went on to talk about the dynamic growth that they had experienced, and how brilliant the management was. Upon taking a closer look at it, he had some good points.

First, the breadth of BHP's business is impressive, as it covers just about all key aspects of the Resource world:

I just finished reading a book called "Game Over" by Dr. Stephen Leeb, and I am not sure what to make of it. The basis of the book, at least how I have read it, is that there is going to be a pressing demand for resources (Oil, Natural Gas and all sorts of Mining products) that will push the price of these products to points that will force inflation-like conditions as there were in the 1970's (if not much worse).

His theory goes further on to say that unlike the 1970s (where most of the demand for oil was caused by Political conditions), this spike in prices is one that is more of a permanent nature, as the spike is more due to a lack of supply caused by a scarcity of the materials and/or the ability to extract the materials at a rate to meet the demand.

Is it really possible to have your cake and eat it too? Can you really find a stock that offers very “visible” earnings, yet with some decent upside? I think so, and here are two of them…..

Enbridge has rarely ever been considered a cheap stock, so you’ll have to pay up for it. It trades at about 15x expected 2010 Earnings, and rarely falls down below 14x Forward earnings. However, this is down from its traditional multiple of about 20x, and offers a decent long-term entry point. With a 4% dividend, good growth prospects (analysts forecast about a 10% Annual growth rate for the next 5 years) and a strong defensive nature, it is a good long term hold. Expect it to return to its traditional multiples when Credit markets ease up, with a 12 month target price of close to $45 to $48 CDN.

A concern to be watched with TRP is that some analysts were concerned about its ability to raise capital for some of its many projects. This concern seems to have been eased somewhat, by the fact that the company has a strong balance sheet and it was able to raise over $5B late in 2008 (which does help to show the confidence that many in the market have in this stock). With a dividend just shy of 5%, and solid (but steady) growth in the future, it isn’t unreasonable that TRP could break through its 52 week high of $40.71 CDN in the next 12 months.

Funny how times can change in the world of oil/gas… even scarier is the pace at which they can change. Natural gas is trading at about 70% lower than its peak of close to $14 per 1000 cubic feet in just 8 short months. This is in spite of the fact that we are just finishing the North American winter heating season. It’s hard to think how low it may go in the summer, especially if this summer proves to be relatively cool (reducing the demand for Natural gas to produce electricity).

Further aggravating the problem is the fact that there is an awful lot of supply coming onto the market. This is especially true in some of the fields that are now being tapped for the first time with the creation of new drilling/fracturing techniques. These include some of the shale areas such as Barnett, as well as the Montney play in northeast BC / North-West Alberta in Canada. Finally, extra storage is being built all the time for LNG (Liquified Natural gas) in the US/Canada ports. One has to wonder if some of the excess supply in other parts of the world might end up in these places, further adding to oversupply.

Back in the summer of 2008 (which seems so long ago!), it seemed like everyone couldn't get enough of the Canadian Oil Sands. Even the billionaire duo of Gates and Buffett went up to meet with fellow billionaire Murray Edwards (from Canadian Natural Resources) for a look. Amazing what 6 months can do!

Like much of the new oil that is expected to come onto the market over the next few years, the Oil Sands is more expensive to produce than conventional oil (and much, much more expensive than oil from Saudi Arabia). This has made its production undesirable during this downturn, and has led to the cancellation or delays of many key projects. However, this extra cost does bring one nice feature, namely that everyone knows where it is, so there is no exploration risk.

Over the past year, there has been a lot of talk about how Apple (AAPL) will perform "P.S" (Post-Steve). I believe that Jobs is likely the most influential CEO in the US, when it comes to the influence that one person can have over their organization. Can this company survive (and more importantly, continue to bring out the ground-breaking products) after he moves on? I think that it won't be easy, but Apple won't be hurt as much as most people think (or at least as much as what investors think, based on the Sell action that happened upon his leave of absence announcement).

History shows that companies can thrive after the departure of an "All-Encompassing" CEO, but there is usually some stumbling along the way. In terms of Jobs, it is important to look at what he has brought to Apple, and what things can be duplicated easily after he leaves. Jobs admittedly does not have much influence on much of the Operations and Finance portion of the business. Sure, as the CEO he is responsible for them, but he has a great COO in Tim Cook and a great CFO in Oppenheimer. So, Jobs tends to focus most of his time on what he knows best, enhancing the products and the user experience. Unfortunately for Apple, it is likely these two areas that have provided most of the drive for the company's success. Jobs' "almost insane-like" level of commitment to Product Quality/detail, his ability to know how to take ideas (Apple's, or others) and improve on them and his incredible eye for how to market a product will be tough to duplicate. Notice I said, "tough to duplicate", and not impossible.

One of the tempting ideas that face many businesses, once they have grown popular in their initial market, is to expand into other markets. Many US and European based companies (McDonald's (MCD), IKEA and Safeway (SFY) as examples) have expanded into Canada quite successfully. So, why is it that Canadian retailers often seem to falter in the US?

A few reasons may include:

It's hard to believe that only a few months ago, US drivers were talking about the possibility of $5/gallon for gasoline. Now, the average price has fallen to below $2/gallon in most areas, and may fall further with the recent drop of 20% in oil in just the past week alone.

While the lower price of oil no doubt acts as a form of stimulus to the economy (as it puts more money into cash-strapped consumer's pockets), is it really the best thing for everyone in the long run?

Over the past few months, even the most seasoned investors have become a little "sea-sick". Extreme volatility is more the norm, and triple-digit swings in the Dow are occurring far too often. So….has the market finally reached bottom? As much as I would love to be an optimist, I suspect that we'll have at least one more test of the 52 week lows before things get better (so, a bit less than 8000 for the Dow, and a bit over 800 for the S&P).

Ok, enough for the negative! On a more positive note, I do think that we are close to a bottom in the Tech Sector, and that Tech will be one of the sectors that will outperform most other sectors in the mid to long term (12 Months to 10 Years).

What defines a defensive stock? Some common traits that are accepted by most investors include companies that sell products or services such as:

1) Food and Household Staples (people still need to eat, wash and drink)

When we first meet people, my wife seems to like to tell everyone that I like investing, and follow stocks very close.  While it can make for a great icebreaker at parties, it also opens me up to having to listen to some of the dumbest theories on how to buy stocks.  I’ve heard everything…from buying stock based upon which team wins particular College Football games (companies closer to the winning team will be more productive) to buying stocks based upon the company’s choice of plants (lower cost plants means that they are frugal) to buying stocks that are close in symbols to a more common stock (so they will be bought more by accident).  Most things you hear at parties don’t make a lot of sense.  Until now…I spoke to someone who had an interesting theory.

(Author’s note: Before you write any comments, please read the following:

The old adage is that you are supposed to buy low and sell high. A further addition to that statement is the famous line from Warren Buffett saying to buy when "there is blood in the streets". Are we at that stage now? Does the fact that Buffett is on a buying spree now mean that this is the bottom? No one will ever know for sure, but one thing that I do know is that many companies have been unfairly punished recently, and this is a great time for a long-term investor to step in...I was sitting on a bunch of cash in my account, and felt the need to use some of it to buy the following:

Weatherford (WFT)

The reality is that each second, we all get older. All the money in the world will not turn back the inevitable biological clock. This fact doesn't stop millions of baby-boomers from trying, however. This is obvious by the amount of plastic surgery, beauty care and ED products being sold. I'm starting to wonder….how does one benefit from the emerging baby-boomer trend?

Over the past few years, we've heard all about how one should invest in funeral homes, health care and pharma companies, as these will all be needed by the growing elderly population. While this will eventually be true, it is important to point out that the largest part of the baby-boom is not yet at the age to need these things to a large degree. Most of the baby-boomers were born between 1955 and 1963, meaning that they are mostly in their "empty-nest years". This is the time when people have money to spend and time to spend it…..so, where might they spend it?

When it comes to "Hyping" a product, it is clear to most people that Apple (AAPL) has no peers. Long before people knew the total functionality of an iPod, they knew that they had to have one. In my opinion, this was the most successful product launch in recent memory, and was only topped by their next product, the iPhone.

Companies do their best to ensure that Consumers (and, Investors) are aware of what is coming out. This helps their business in several ways. One, it provides a level of "excitement" for their company. Two, it helps to ensure that people know that they are on the "cutting edge". Three, it can help to deflect away from a current offering in market from one of their competitors. Finally, if done right, it can ensure that the product has a strong demand at the time of launch, ensuring a good success.

Technically, a recession is when an economy has two consecutive quarters of negative growth. Is the US technically in a recession? Maybe, maybe not, but it sure feels like one. This lackluster growth rate has caused many investors to begin to look overseas to earn greater returns.

Two areas of solid growth are Latin and South America. These regions are seeing this strong growth mainly due to strong commodity prices, and the increasing "Middle-Class Expansion". Sure, there is a strong tie to the US economy, and they likely haven't fully "de-coupled" as many have hoped. However, the link is not as strong as it once was, due to global expansion and shouldn't weigh down these regions much more than it already has.

As reported yesterday in a variety of Media outlets (Here is the link for Bloomberg), billionaires Warren Buffett and Bill Gates were in Northern Alberta this week, visiting the Canadian Oil Sands. While it may have been more fun to see them "bundle up" and go up there in January when it warms up to -40C (it's just as bad in Fahrenheit, trust me!), their presence shows that investors are beginning to really notice the activity going on in this region.

Here are some stunning facts (from Wikipedia) about the Oil Sands: