Year of the Rat

"The difference between death and taxes is death doesn't get worse every time congress meets"

Just some thoughts...

Last year was the "Year of the Pig" and rightly so with the fat bonuses and this new year is the "Year of the Rat." Mr. Spitzer isn't there anymore, but I imagine there will be some investigations that will make rat-like resurgence. I can only imagine.

Alan Abelson wrote in the latest issue of Barron's: "Gold's perverse proclivity to feed on bad news was much in evidence as the gathering woes of the economy at large (think housing collapse and the gaping black hole in our accounts with the rest of the world) and the financial sector in particular (the modern credit crunches) provided the spark for the precious metal's combustible performance that sent it soaring to unprecedented heights." I thought it was well written and goes along with the post I wrote last week. Of course last weeks "surge" in price doesn't make me want to sell, this is a long-term position as I am a long-term investor. I have held for over three years now and counting. I also hold position in gold and silver equitie(s).

Matt Simmons, someone who knows oil as opposed to the new followers of Texas Tea makes a fundamental case for higher prices, "Production peaked in '05 at 74,298,000, now daily consumption has continued to climb as rapidly approaching 88,000,000." Can you say supply/demand deficit? My only exposure (insurance term) to oil is through PWE, I've seen different valuations of this company and all have some validity. My perspective is simple, I don't think their oil sands project is valued correctly, I believe the Canadian Tax change that will take place in 2011 is "good" for the company, in the meantime I collect +15% dividend from a company that has hedged their oil at $70. They just made a purchase that I will hold off my opinion on. PWE's oil sands project is really a call option that will become exercisable when the price of PWE reflects the project.

Citi will supposedly cut 5% to 10% of it's workforce, now standing at 320,000. I had a short stint (Internship) at Citi about 6 years ago, right when the involvement with Worldcom came out, people where unhappy then and I currently have no contacts there through "attrition."

A phrase/word that seems to be missing from the media is "Goldilocks," interesting!

I need to do a piece on retail, I have three family members that work at Starbucks, Sears, and Victoria's Secret. Interested in their insight!

Since this post apparently has ADD, lets go back to oil sands, A new dump truck tire runs about $60,000. Tires last about 12 months. Each truck uses six tires at a time. But cost is not a problem, availability is. You can't produce oil sands without natural gas.

This weekend, I'll talk about some interesting businesses that I have been closely following.

Until then, take care.

S.K