OJO Zafado

GCC Commodity ETF Gets Boost From Reduced Fees

This fee ratio being lower is a plus. I do not believe it is as low as RJI. My research at ETF.Com indicates RJI has an expense ratio of 0.75%. This may be how RJI is modestly outperforming GCC. These types of ETF/CEF s have big expenses involved with their actually trading the commodities futures so they may underperform the indexes somewhat. That being the case the lower the expense ratio the better. Your chart while including DBC does not include RJI. I believe RJI is constructed to be somewhat more flexible in having a shorter period between the adjusting of weightings. Investors need also to be aware that most of these vehicles for investing in commodities are using US Treasury investments as collateral for their futures trades. With intrest rates at near multi-decade lows and the ten year rate blipping up the last couple days (4/2-3) it may be appropriate to take a position in DXKSX to protect(hedge) your exposure to the bond market turning bearish.

Winners and Losers From January's U.S. Auto Sales Report

This percent this and this percent that. No information on the actual number of new cars sold in the US in 2007. The total is what is germain to whether the US consummer is maintaining or losing their ability to purchase. I am as disinterested in how many vehicles Ford sells as I am in caring what brand my next new vehicle will be. We are looking for the best mid sized vehicle with the best price and 0% 5 year or longer financing. Jeep sells $30K Cherokees with no luggage rack and a back seat that does not slide back to take advantage of the cavern behind it. Most SUVs are still purloined in bleak ugly dull gray, blue ,green army coloors. $30K for an SUV with no luggage rack or rail. This improves highway milage as if you would be using this <18 mpg vehicle as a commuter car!

TD Raises Miners' Price Targets on Rising Base Metal Prices

I was Careful and sold my FDG in three partial lots up to $54.37. I was not so fortunate in GACHF where I took it off for a 40% gain at less than 1/2 of the $3.79 it ultimately hit. Both stocks have quieted down. Met coal is where money will be made. A BDF went out on GACHF last Aug at $1.35. Basically GACHF has over reacted to the move in coal. At some point I would be a buyer again around$1.60. The two US companies Massey Energy MEE and Alpha Nat Resources ANR are both big Met coal producers. The Canadian shares are more susceptble to price volatility as the Gov'ts both in Otawa and in each province have been taking advantage of their nation's strong resources demand. Taxes are being increased and are sceduled to increase for trusts like FDG in 2011. This will put some trusts in play for acqusition or conversion to MLP or even REITS for some. An interesting speculation is a BC miner known as Hillsborough Resources. They own a 20% stake in the BC Peace River coal project that is under developement. HLB-TSX is partnered with Anglo American so they "probably" have good capitalization. I like the shares if they retrench ~ $0.50. No coal being produced as yet but when they get the mine started up and start deliveries it should get to $1.25. While I don't see the kind of a move like GACHF had that put it on the radar of institutions it could make you a nice gain. This Met coal thing will go on for years and these stocks should be bought on SIGNIFICANT retracements. Alot can happen to Canadian coal stocks in terms of tax politics, and extremely bad winter weather that can not just hamper mining but the transportation system as well. These kinds of events will provide the buyer with good buying opportunities. I currently own no individual coal stocks except through some Nat Res mutual funds and ETFs.

Income Stocks on Sale Once Again

I also own PWE. AAV,BTE,PGH, PVX, HTE,& ENY are all in my portfolio. I would note the unusual stong performance of BTE against it's peers. My speculation is that along with AAV, it being a small cap in the sector it is possibly a target. PWI was recently taken out at a +20% premium. The tax changes in Canada and Alberta are shaking these units out. The bottom line will remain their proven,probable reserves, their equity to debt ratio, and the globalization of the NA gas market. The US is importing 15% of their gas from Canada. Canada is now also our largest supplier of imported oil. Mexico's largest oil field saw a 15% production decline last year. LNG cargoes are typically receiving a $6-7 premium per MM`BTU for delivery in Japan, N Europe and Turkey. This makes the NA market price of ~ $10 tenuous at best. Despite the 2011 tax change deadline looming for these trust units, they are excellent trading vehicles if you note their 5 year charts! Trading! They are generally not good investments after the early summer as the market goes into a shoulder season especially for Nat Gas. Pre-MLK Holiday they are typically at great valuations. If you are unfortunate enough to get a position at or near a 52 week high you still are at least paid hansomely to ride out the next cycle. AAV is my favorite pick in this sector right now as it is pure vulture meat. It should go away at C$13-14.50 /unit. Perhaps it is a different asset class but near term CALL, preferred securities look awfully good now. Many of the adjustables are selling below default yields (BAC-PrE,UBS-PrD & FNM-PrP) most are 15% tax qualified. The exceptions are the likes of HJJ-6% way beaten down yielding +7% and with a March 2009 CALL date at $25. These financials are now floating new subordinated debt at 7.25-8.5% and still getting A & AA ratings on this BB yielding debt. When things eventually turn around in 2010?, the high yield debt will not be redeemable with mostly +3 year dates to the first call dates. Still to improve debt to equity the financials are quite likely to reddem many near term call dated preferreds. Caveat emptor! The $2.5 /0.5 Billion bailout proposal that a consortium of 8-9 banks and brokerages are sponsering for ABK, was labeled as inadequate by one of the ratings agencies last week. Inadeaquate to save the AAA rating or the company (ABK) from bankruptcy? WB is expected to float another preferred or CV offering to the tune of $350-450Million as their participation in the Equity infusion portion of the bailout. When finally crafted you can expect the 8% WB-PrS to drop in price below par. This would most likely make the WB-S a +8% yield in a security of the country's 4th largest bank with a 10 year Call date, and 15% tax qualified!

Lumber and Forestry Companies: Building a Better Future

Your forestry/lumber picks are interesting. I have followed VCP and SinoForest. They have had great runs in an environment that has not treated NA paper,pulp and lumber very well. I was led to your blog by the teaser on your high yield picks. In a combined theme I would mention that I own CFPUF,ATBUF, and TWTUF the Canadian pulp, paper, OSB, biomass, lumber producers & nursery operators. They all have excellent yields. CFPUF has been hit hard again post the Loonie's previous rise to 110. The Loonie is now surging again & up to +/- 102. This has hit CFPUF again. These are becoming great value plays as even if dividends are cut they are structured as trusts (As you mentioned PWE which I also own) and will continue to pay comparitively high dividends that are mostly 15% tax qualified. TWTUF is an exception as it's dividend is actually an interest payment on a bond. This perhaps creates an advantage for tax sheltered accounts. ATBUF has already announced plans to convert to a REIT, before the 2011 tax change you mentioned. I believe it is woth $14/sh on the ultimate recovery in 2010? in the US housing market. Also looming on the horizon are the 2010 Winter Olympic Games in Vancouver/Whistler-Bla... There is going to be a small building boom in PAC/NW Canada, that has already begun with big investment in the highway connecting to the mountain venues. I just added another partial position to CFPUF last week at $8.98 US$. The current C$0.12/month dividend may in fact be unsustainable due to Loonie strength, and be again reduced to C$0.10 from the current C$0.12. That would leave you a +13% dividend which after taking the 15% tax allowance would still yield 11.35% tax advantage @ he 15% rate. The tax is then recoverable on your US tax return as a foreign tax credit. Forestry products are the last of the commodities to still not have participated in the huge global commodities rally. When this situation reverses this stuff including your picks is going to soar. Look at a chart of DBA as an example. I just prefer the Canadian companies not just for their strong dividends while awaiting the market turn, but also for their permanent unfair trade advantages and Gov't subsidies. NAFTA is not unfair!