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Long a buy and hold investor, I now believe that buy and hold has to be re-evaluated in a world of ever increasing, instant information and huge gyrations in markets all over the world. A value investor at heart, I anchor my portfolio with conservative funds and blue chip dividend stocks, but... More
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  • The Synergy Between Nat Gas And Electric Cars

    Natural gas is too "unstable" to use on our roads and highways where millions of cars and trucks are subject to the millions of traffic accidents. From a safety perspective alone, natural gas vehicles should not and cannot be allowed on our roads. There are simply too many uncontrollable variables.

    Natural gas can however, power the transportation of the future as feed stock for electrical power generation. Because natural gas is so abundant, it only makes commons sense that electric power plants will use more and more natural gas as their feed stock over time. As this abundant source of power generation comes on stream, look to invest in the companies that stand to benefit from this game changer.

    Duke Energy (DUK), Progress Energy (OTC:PREX) and others are all good bets as is laid out by theStreet.com (See their top ten list for 2012) Electric power storage is also a great place to take a long term view. There companies in that space looking for fuel cell solutions (large fuel cell stacks that can burn nat gas) Ballard Power (BLDP), Plug Power (PLUG), and Hydrogenics (HYGS) are all pursuing such a solution. However, it is the feed stock of the future electric car that interests me most, and that is Lithium.

    As Lithium becomes more and more the "go to" source for new battery technologies, from your iphone and laptop, to golf carts, electric motor cycles, cars and large storage facilities, look to the miners who produce, or will produce, lithium carbonate from two different sources, hard rock (pegmatite) and lithium brines or clays. Let me explain.

    The largest supplier of Lithium today is Sociedad Qumica y Minera de Chile S.A. (SQM) which produces Lithium as a byproduct of its massive Potash operations. As with other large miners, SQM sells it's lithium on a spot market (there is currently no futures market for lithium, however this could change in the coming years)

    Now electric battery manufacturers and car makers require a steady stream of lithium carbonate for their manufacturing processes so as not to interrupt production. To date, suppliers such as SQM, FMC et al have refused to sign contracts to supply a continuous, uninterrupted supply of product to manufacturers. This is mainly because, even though brine production is the most economical way to produce lithium, it is more sporadic than spodomen production, due to the natural drying out process supplied by the sun, that makes it more economical in the first place.

    Australian producer Talison Lithium (TLTHF.PK) (TLH-T) is the largest, pure lithium producer on the planet, and its spodomen production from its Greenbushes operation in Western Australia, is the richest hard rock deposit on the planet. Talison supplies over 300 customers with product and is the largest supplier to the growing Chinese market, due to its ability for continuous production and its proximity China. Talison also boasts a very large brine deposit in South America due to its purchase of Salares Lithium in 2010. In 2012 Talison reports a 25% increase in the price of lithium this year alone (2012).

    (click to enlarge)

    FMC Corporation (FMC) is another large producer based in South America, with brine production as a byproduct of other operations such as potash. As with SQM, lithium is only a part of its total operations and as potash becomes more important as agriculture attempts to feed a hungry world, its share price looks attractive as well.

    As the lithium market grows, you should not ignore the juniors who have popped up over the past five years to take advantage of large deposits which may at some point, be quite productive or gain the notice of larger producers as consolidation takes place, as it so often does in young, growing markets.

    In this space I like both Western Lithium (WLCDF.PK)(WLC-T) for its large, Kings Valley clay deposit in mining friendly Nevada and Rodinia Lithium (RDNAF.PK) (RM-T) as it owns three of the top 20 lithium brine deposits on the planet. If there is a future consolidation in the industry, these two should be tops on the majors lists.

    In the "Battery" tech area I like A123 Systems (AONE). At only .50c per share this high tech battery maker has been hammered this year, well below where I think it should trade. At .50c per share, it is one of the best speculative penny stocks out there.

    Disclosure: I am long AONE, OTCQX:WLCDF, OTC:TLTHF, OTCPK:RDNAF.

    Aug 09 10:19 PM | Link | 2 Comments
  • New Global X ETF Tracks Micro Caps In Resources And Energy Via The Canadian Venture Exchange.

    A new ETF promises to track the returns of the Venture Exchange in the coming years. The Global X S@P/TSX Canada ETF is currently trading under $10 currently. Like the companies on the exchange, this ETF is speculative, however at the current price point for both the ETF and the exchange, the upside can be huge. The entire exchange has been literally hammered over the past year. The Venture exchange, populated with small mining, energy and resource companies, has a history of up and down volatility and if that history is any indication, it is poised for monumental returns over the next year.

    The exchange is down almost 45% over the past year.

    However, history teaches us that, when dealing with the Venture Exchange, what goes down, always goes up. In this case, extreme volatility can be your very good friend. You don't buy the venture at the top. You buy it at the bottom, or as close to the bottom as you can. I believe this exchange is at a bottom and is poised for huge gains. If you don't like to spend the time picking individual stocks, especially ones with this kind of volatility, then (TSXV) is probably the vehicle for you.

    A recent article at Pinnicle Digest, details 7 significant drops in the Venture Exchange since it's inception 11 years ago, and the subsequent recovery points. From trough to peak, here are the numbers:

    Average loss (in percentage terms) during a correction (peak-to-trough): -36.25%

    Average duration of a bear market in the TSX Venture: 5.78 months

    Average gain after a correction (trough-to-peak): 98.08%

    Average duration of a bull market in TSX Venture: 11.83 months

    The current drop of the exchange began in March of 2011 and has lasted for almost 14 months.

    tracks the top 30 most liquid stocks on the Canadian Venture Exchange and began trading in March this year. It consists of two sectors, Materials (53.9%) and Energy (46.1%) Although most of the companies listed in the Venture Exchange have their headquarters in Canada, their operations span the entire globe, wherever precious metals, resources and energy are found. The Venture is the largest "pure" resources exchange anywhere today.

    I believe the is a great way to track the junior resource industry. I am also a speculator of a number of small and even penny stocks on the exchange that I have been following for some time. They represent approximately 10% of my portfolio at any given time. (volatility is not for the faint of heart, nor for more than 10% of your money).

    Having said that, I have made some spectacular gains on the Venture Exchange.. I believe that the exchange is now poised for some of those gains again this year. In the mining sector, we are at the start of drilling and excavation season. The spring is when hope springs eternal for many small mining stocks and this year will be no different. Some will fall short and some will find new reserves that could change there share price in spectacular fashion.

    As I have pointed out in previous articles, I have bought stakes in Brigus Gold (BRD), San Gold (SGRCF.PK), Alberta Oil Sands (TSXv-AOS) Talison Lithium (TLTHF.PK) Rodinia Lithium (RDNAF.PK) and Western Lithium (WLC) My most recent purchase is:

    International Lithium Corp

    TSXv-ILC

    ILC is a small company (a penny stock trading today at .085c) with huge resources in both lithium and potash reserves. in Argentina, Canada USA and Ireland. The venture exchange has dropped significantly over the past year and companies like ILC have had their share prices slashed to lows never seen before. A number of Lithium juniors have partnered strategically with battery companies. ILC's strategic partner is Jiangxi Ganfeng Lithium Co. Ltd of China.

    About Jiangxi Ganfeng Lithium Co. Ltd.

    Ganfeng Lithium based in Xinyu, Jiangxi Province, China, is a professional producer of lithium products which has developed a comprehensive product chain, including lithium metal and alloys, inorganic and organic lithium chemicals, supplies a wide range of lithium products for primary and secondary lithium battery market, pharmaceutical and new material industries. Ganfeng's principal market is in China with international exports to Europe, Japan, USA and India. "Ganfeng Lithium, as a leading lithium downstream products producer in Asia, has recently announced in the company's 2011 annual report USD75 million in sales revenue representing a 34% increase over the previous year. Currently Ganfeng consumes a significant volume of lithium raw material but taking into account projected business growth, sourcing a future supply of lithium becomes more and more important to support Ganfeng Lithium's core business. The company was founded in 2000, it was listed on the Shenzhen Stock Exchange in August 2010, notably as the first publicly listed lithium company in China and has experienced rapid continuous growth over the last 10 years.

    "Increasing our share in ILC is part of our raw materials strategy." Wang Xiaoshen, Executive VP of Ganfeng Lithium Co., Ltd.

    It takes a lot of time and research to invest in individual companies, especially juniors on a volatile exchange, so if you don't have that time, then maybe you should consider The Global X S@P/TSX Canada ETF for that "speculative" portion of your portfolio.

    Related articles

    Disclosure: I am long BRD, SGRCF.PK, TLTHF.PK, RDNAF.PK, WLCDF.PK.

    Additional disclosure: long International Lithium Corp.

    May 02 4:30 PM | Link | Comment!
  • Gold And Silver Are Not An Investment. They Are Forever, Currency.

    Why savers should be saving gold and silver now!

    "Money printing works, until it doesn't work anymore"!!

    I am not sure who the original quote is credited to, but it I know it is a favorite quote of Marc Faber, author of the "Gloom Boom and Doom Report". You can view his latest interview at Capital Account. In that YouTube video, Marc refers to the "inflated ego of Fed Chairman Ben Bernanke" as the excessive money printing continues unabated, on a sure course to financial ruin for many people. He fears there will be social upheaval in a number of western democracies and that wars will evolve from the hyper inflation to come. You may agree or disagree with his ideas, but I think you will agree that Faber is not a fool. His opinion is a learned one, and should be heeded along with others who try to make sense of a financial crisis that is not yet finished playing out.

    In the 1970's there was one listed "Billionaire" in the Forbes list. By the mid 80's that had risen to 8. Today Forbes lists over 1200 billionaires in the world, and Faber believes the number is closer to 1500. Maybe that statistic is a "canary in the coal mine" of a hyper inflationary model which is being perpetrated by Banksters and Central Banks throughout the world at this writing. Now I know that none of those 1500 are reading this column, but I hope that many of those whose finances stand to be either greatly reduced or even wiped out, are.

    Gold and Silver are not an investment!. Let me repeat that. Gold and silver are not an investment! Gold and silver are (excuse the pun) the most "solid" form of money you can possess. Yes, these two precious metals are money! They have been money for about 4,000 years. Right up until 1964, silver was used in U.S. Denominated coins. That is why in 1964 a U.S. Quarter would buy you a gallon of gas. That is why today, the exact same U.S. Quarter (dated 1964 or before) will still buy you a gallon of gas. It is because of that silver content.

    During the Roman Empire circa 2,000 years ago, an oz of gold would buy you approximately the same value of goods as it will buy you today. ( I know that "goods" are interpreted in different ways, but "food" and "Clothing" are goods and that comparison can be made) This is money that has kept it's value for thousands of years, and continues to keep it's value, even though, at least 2 or 3 times per year, there is a hue and cry from the so called investment community that gold has lost it's "sheen" and subsequently drops, only to return to it's steady climb in the month following. Usually only the "drop" in prices is reported by the headline seeking general media. They often don't report the steady rise as it usually takes the entire year to shake out higher, as it has for the past 11 years in a row. For instance, the price of silver rose 22% in just January and February of this year. Most people are not aware of that, because it rate a "one day" headline, but it is fact.

    How do you pay down a 15 Trillion dollar debt? Well, you make the 15T worth a lot less, that is the only way. You "inflate" it away. You print money, and you print money and you print money. And it works, "until it doesn't work anymore"! Just ask the blue collar savers who have been squirreling cash away for a rainy day.
    Against gold, they have lost over 500% in the past 10 years.

    Yes I know, the famous Oracle of Omaha once said that "gold has no value". However it is now a certainty that, If Warren Buffett could have sold all of his shares in Berkshire 10 years ago, and just bought physical gold, he would be 500% richer today (give or take a percentage point). How is that for maintaining value?

    There is now a race to devalue currency, by almost every major central bank in the world. The only "currency" they cannot devalue, is gold and silver, though they try and try, by using the fear factor. Don't fear owning gold my friends. Fear not owning gold and silver, especially if you are a saver.

    Over the past 12 months, more than 61% of "all" U.S. Treasuries were actually bought by the Federal Reserve Bank. Yes, that is right. The United States of America is buying its own debt. That is because foreign banks are only buying less than 2% of that debt! Sound like a problem to you? Sure does to me. Sounds like money printing to me, on a massive scale!

    Most people do not realize that, all of the gold mined over the past 4,000 years, if melted down, would only fill 2 Olympic sized swimming pools. Does that sound like a shortage to you? Sure does to me. Now consider that the Silver/Gold ratio is historically 16:1 At today's gold rate, that places silver over $100 per oz. (trading today under $33) That is only if gold does not increase further in U.S. Dollar value (some value eh!)

    Now here is another fact to consider. As the money printing continues over the next decade, or as hyper inflation begins to rear its ugly head from the money printing of the last 4 years, and we can draw any conclusions from the previous decade, then gold will reach (in U.S. Dollar terms) Approx $8300 per oz by 2022 (or before).

    Now, does today's gold purchase price of usd $1650 sound like a bargain to you? It certainly does to me!

    Savers should be buying physical silver and gold right now if they haven't already been accumulating. Your savings depend on it.

    Personally I have invested in both physical silver and gold and I am investing in mid tier gold miners that have been beaten down over the past year. Do your own homework, but look for mid tier miners (Ones that could be attractive to the senior miners, who can only increase production by scooping up smaller names) who have solid management, producing mines, increasing production, increasing reserves and who's production costs does not exceed $800 per oz. (the lower the better).

    You don't need good luck with your Savings. You only need good currency.

    HP

    Related articles

    Disclosure: I am long OTCQX:SGRCF, BRD.

    Tags: GLD, SLV, SIL, PPP, SGRCF, GG, GOLD, ABX, NG, SGR-T, BRD-T
    Apr 12 2:23 PM | Link | 1 Comment
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