Random Rants

FARMING
Had a chance to look over the Barron's for this past week, didn't see anything controversial, just farm business. I can't say that I agree or disagree, but I do know that farm incomes for the most part are rising all around the world. I don't have a position in this index, but I should remind readers that about two months ago, Mr. Jim Rogers opened the door for investors to invest along side him in agriculture. The interesting part is the weighings are based on Mr. Rogers discretion. Personally, I've always admired Mr. Rogers opinion, he seems very open, often cocky, and always entertaining. For those interested in investing alongside Mr. Rogers, the Symbol is RJA.

Also, listening to the Don Coxe end of the week call, I got the message, "Read Monsanto's annual report." Haven't had the chance yet, but I'll report back on any interesting finds.

GOLDMEMBER
Now onto Pumping Money, not a week goes by that we don't hear so-and-so central bank has pumped X amount of money into the system. Mr. Coxe mentioned something along the lines of, "The total amount is now ahead of the total that was pumped into the system post 9/11, who would have thought that so many smart individuals, educated at the best schools would cause more damage than Osama." I guess that is why Gold continues to push higher.

Relating to Gold, I remember when I made my first purchase. It was 2004, I held an internship at J.P. Morgan Chase, the Credit Card Division, not the I-Bank. It was late in the afternoon and my mentor, Mr. Hancock, 15 year veteran instant messaged me saying, "Kudlow & Cramer just said they would short gold at 394." This of course was music to my ears only for the fact that my father spent 20 years as a jeweler in Iran. Much of the West doesn't understand the importance of Gold in Asia. The majority of the Middle East only trusts the yellow metal as a true store of value. In fact, to this day, anytime there is a wedding, there is a transaction of Gold between the two parties. Further, 80-90% of the gifts received are gold! With one of the more youthful demographics, Gold will continue to be in circulation.

Now to India, same story as above. There is just massive amounts of Gold that is treated as a currency. Men wear Gold as a symbol of wealth and it's not the 14 K material! I just find it hard to believe that anytime Gold is talked about in the media it is talk of inflation. And don't get me started on that, as inflation is the most wrongly used word today. Inflation is not rising prices, rising prices are the result of inflation. Inflation is just the increase in money supply/credit.

So within a week of Kudlow and Cramers great investment idea of shorting an asset class that I personally have "inside info" through my father, I made my first purchase of the yellow metal. Physical gold of course, at the price of $396 an ounce. I still hold it. In addition the next year I purchased premium gold coins, the Saint Gaudens, MS-63 and the MS-65. Consequently, late 2005 I purchased physical silver, at around $7.15 an ounce. I saw a cheap asset class and my reasoning is 100% fundamental and there will be a time to sell. Call it a liquidity crisis, solvency, whatever you want, but as Mr. Coxe says, "Gold is the only asset that is no one else's liability."

YELLOW CAKE
Going from the metal to Uranium. I've devoted quite a bit of space to this energy source and I still believe the business franchise of Uranium miners to have solid value. Especially if you have permits to mine! Now we get the news that BHP is pursuing the purchase of Rio Tinto, I certainly wasn't surprised. It takes 8-11 years to start a mine, why wait that long when you can buy a company at less than 20 P/E. I continue to hold Denison and Uranium one, together they represent a little over 25% of my portfolio, and although in 2007 the marketplace didn't increase the value, I still hold both at a profit. This is a page 16 story right now, wait until it starts to hit page 6-7. Moreover, although Denison and Uranium didn't have a price increase for the year 2007, Uranium the commodity did (29%).

2007 Results
After a near disastrous November-December, I am proud to announce that our portfolio had a healthy +21% return for the year. It was a tough year and I can't say I didn't enjoy (I know, double negative) it, I learned a lot. Lets hope I learn more this year (first), and have a positive return (second).

Thank you,

S.K.