Monday, March 19, 2007

Leaders for the Next Leg

I was asked a few months ago what groups I thought would lead for 2007. My reply was the oils, miners & golds. I include deep water drillers & some other oil service stocks in the term "oils".

I don't expect a recession and I think the bull market for oil & minerals will end only when China says so. The action in copper recently proves this. Once copper destocking in China & scrap supplies were used up, copper prices began to rise again. I expect oil prices to move up strongly this year as China & other emerging market demand continues to grow (as does US demand unless prices go back to the highs) and supply from many big producers drops (such as Mexico, Norway, the US and others), negating new finds. Ditto iron ore, etc. Gold is a world prosperity play - physical demand in India & China will drive gold up as mine supply continues to drop.


mern said...

what about HI HO SILVER ;-)

i love silver. i bathe in it. i put some on my pancakes, too.

i cant predict a recession or not but in the last 16 plus yrs weve had 1 (not even 9 months long) recession.

we had a stock bubble, mostly tech, that blew up.

we had a housing bubble, that finally blew up.

seems like private equity is a bubble.

there is sooooooo much butter in the system its mind boogling to comprehend.

sure seems like we cud use a real recession, some creative destruction.

and who isnt to say we arent in a recession right now. its not like we can have any faith in the BLS.

below par growth with persistently high inflation looks to be the reality. if stagflation becomes front page news, we will go into a recession.

what r these freaks doing, bidding the tape up before ben and the boys give the bulls nada on wed. i bet dollars to donuts they say something like "we are moderating the sub prime mess, but we dont see it spreading, and the greater risk still, is inflation, not lack of growth.

looking at the macro, and listening to conference calls, its hard for the fed to cut. unless they r complete liars, which wudnt shock me

Bunkerman said...

Silver, too. I include it with gold & copper.

We've had many sector "recessions" but they hadn't bunched up in the 1990 era one.

Stagflation could happen in the US, but not at the level of the 1970s when the Fed was printing money like mad.

Of course if China raises prices a lot, that would really cause US inflation since the offset to high services inflation would disappear.

Maybe those wanting China to revalue its currency up shold reconsider. :-)

mern said...

any opinions on uranium?

i like the URZ chart, but only have a small marker.

URRE looks gud and probably moving to nasdaq

seems like demand is going much higher in china and russia build nuke power plants

Bunkerman said...

I own a lot of CCJ long term. I picked CCJ just because its big. BHP has a lot of Ur too - a big holding for me.

Bunkerman said...

The jester hyped my FCX and other coppers like PCU. Should I worry? Not sure.

mern said...

well that was boring.

gud nite

Bud said...

Mern.....that was a very lame skit on SNL. And Bunkerman.....Jimmy nailed the bull market in copper last year...he picked PD, PCU and FCX early in 2006.

Bunkerman said...

I guess I need to clear my head about him. Maybe I'm still suffering some from the anti-Jimmy crap I had to listen to for so long. Sounds like he hits some good ones and gets passed some good info sometimes. He's very hard to take, though.