StockResearchDD.com Web Site – Launching Fall, 2007
September 25, 2007
This new site is a comprehensive data source for investors, investment advisors and analysts who want to systematically research investment ideas in the Junior Mining and Oil & Gas Sectors. Its introduction is believed to be extremely timely given current stock market volatility, U.S. $ weakness, sub-prime mortgage issues, commodity demand and supply economics, and the apparent ever increasing interest in precious metals.
The site, which is transparently independent and objective, provides extensive research and due diligence for over 250 companies that operate around the world. These companies are segregated and compared with one another among the following industry sectors: Base Metals Mining, Gold Mining, Silver Mining, Uranium Mining, Oil & Gas, Oil & Gas Service, and Oil & Gas Income Trusts.
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U.S. GDP and Inflation
September 25, 2007
Current annualized U.S. GDP growth and inflation forecasts broadly seem to be in the order of 3.3% and 2.7% respectively. At the same time current U.S. dollar forecasts suggest that the U.S dollar measured against the Euro will remain in the present trading range for the balance of 2007. Given the current state of U.S. trade deficits, the extent of and continuous growth in U.S. debt, the current sub-prime issues affecting stock markets, U.S. Consumer debt and dollar concerns, ongoing conflicts in Iraq and Afghanistan, and ongoing terrorism concerns, we think any such forecasts should be viewed with healthy skepticism. Inflation forecasts likewise may be effected by the Feds 50 basis point drop in interest rates last week. Stay tuned.
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U.S. Manufacturing Jobs
September 24, 2007
From an economic perspective, it is easy to see how manufacturing adds value by converting raw or processed materials into tangible end-user products. That U.S. manufacturing jobs have been eroding in absolute numbers over the past ten years is irrefutable. This has been particularly in the case in industries such as Automotive, Electrical Machinery, Footwear Manufacturing, Furniture Manufacturing, Lighting Products, Office Machinery, Textile Manufacturing, and so on (for example, see Congressional Research Service Report for Congress, China’s Trade with the United States and the World, January 4, 2007). Based on U.S. Department of Labor statistics U.S. manufacturing jobs declined in the ten-year and seven year periods ended July 2007 by approximately 14% and 18% respectively.
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Stock Valuation
September 23, 2007
Value, be it the value of a house, a business, or a normal sized trading lot of shares of a public company is equal to the present value of all future benefits expected to be derived therefrom. Value, being point in time specific, changes with changing circumstances and conditions both internal to (i.e. within the control of the owner) and external to (i.e. outside the control of the owner) the asset. The determination of the value of any asset absent an actual open market negotiation where both buyer and seller have full knowledge (or at least access to full knowledge) of matters relevant to an asset’s value can be said to be determined in hypothetical market.
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China
September 22, 2007
For many years The Peoples Republic of China (‘PRC’) has reported a GDP annual growth rate of 8% - 10%, creating an unprecedented demand and upward pressure on prices for basic commodities such as copper and crude oil. While there are many economic issues related to China that bear directly on the economic wellbeing of the U.S., perhaps none is as important as how a slowdown in U.S. Consumer spending would affect China’s GDP growth rate and its then behavior in respect of how it prospectively would deal in such circumstances both with the large amounts of U.S. dollars it holds and its continuing purchase of raw materials required to fuel its growth. This is because it is generally believed that the U.S. consumer spending is significantly important to on-going global (and given the U.S.’s apparent continually increasing dependence on economies external to its own) and U.S. economic growth, with the consequence that if the American Consumers reduce consumption the world (read China in particular) macro-economic engine may slow down significantly or reverse direction.
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Investment Advisors
September 20, 2007
Investment Advisors come in all manner of age, motivation, contacts, intellect, financial knowledge, business experience, stock market experience, financial and analytic support from their employers, and so on. Our own experience is that ‘a good one is not easy to find’, and that unless one has a great deal of money invested through a particular investment advisor, it is hard to get the time and attention of ‘a good one’ because they are in high demand. Accepting that Investment Advisors are conscientious professionals who take their client’s interests seriously, we believe many of them are essentially intermediaries who ‘sell’ to their clients the expertise of their employers or money managers their employers recommend. This obviously is a different role than that of an ‘advisor’ who analyzes, either on their own or in combination with their clients, analysts and others, and makes buy, sell and hold recommendations to their clients. In January, 2007 we conducted surveys in both the U.S. and Canada that in part asked questions of investors related to their interaction with their investment advisors. Our questions and the answers, derived from respondents with more than $100,000 invested in publicly traded securities, were:
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U.S. Trade Deficits
September 19, 2007
The U.S. consistently ran Trade Surpluses from 1960 to 1970, but after 1970 has incurred Trade Deficits in every year except 1973 and 1975. The following two charts show the aggregate ‘Goods Only’ Trade Deficit by Decade for the Decades ended 1979, 1989, 1999, and 2009, where we have assumed that the Trade Deficit for 2006 will be repeated in each of 2007 through 2009 when the Trade Deficit has increased on a year over year basis in every year after 2001. Based on current monthly trade deficit levels we believe it likely, barring a serious recession, that the Trade Deficit we have interpolated for the Decade ended 2009 will be greater than the amount we have calculated (Data – Balance of Payment basis: U.S. Census Bureau, Foreign Trade Division).
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