The Sky's The Limit For Oil and Gold war peace money currency trade

Never has the threat of world war been more imminent than right now.
Most of the world's infrastructure continues to rely on outdated technology powered by oil and gas.
History proves no country is immune to the devastating effects war has on currency reevaluation.
This makes hard assets highly desirable - gold and oil being the two most coveted.  more demand means more liquid (easier to trade).

Take into account the widespread demand, as well as the scarcity of these commodities - and you have the perfect storm.

United States Corporate Tax Rate Flawed Companies Relocating Policies clinton buffett rule takeovers

The average corporate tax rate among 20 competing markets is under 20%, but in the United States this number is 35%.
A 2016 report by Ernst & Young found that a reduction in that rate to the more competitive level of 25% would have "prevented foreign takeovers of 1300 companies".  This doesn't even account for the losses attributed to tax inversions; Fewer companies relocating is a double blessing for the United States because
1) the federal government would take in more tax revenue without having to raise the rate on remaining companies.
2) becomes more attractive to foreign entities interested in relocating their legal domicile to a more tax friendly jurisdiction.  Because America is such a large market with many net benefits this should be considered the limiting factor and thus consequential.

Between 1986 and 2016 the number of US companies ranking among the world's top 500 by revenue fell from 218 to 128.  To maintain tax revenue, the country has had to raise the rate on the remaining companies - this hasn't helped the situation which has gotten out of control : $300 billion worth of companies taken over in 2016 highest in almost two decades.

Points to consider when voting in the next election: Policies and business


My opinion

• since when does a bankrupt nation have the luxury of choosing expensive energy? Clinton wants to add trillions more in debt to build the infrastructure needed to produce energy at a rate of 80+ cents per kwh when coal and gas is only 25 cents.  The transition to alternative forms is the reason Nova Scotia has the highest utility rates in Canada.
• The Trump Plan will lower the business tax rate 35%->15% and eliminate the corporate alternative minimum tax.
• unlike Trump, Clinton is not proposing a full overhaul of the tax code.  her plan is intended to make sure the wealthy pay their "fair share" in income tax. Under her the code more complex, particularly for high-income earners who might or might not meet the Buffett Rule (every individual and company making more than $250 thousand have to pay a minimum of 30%); they could also be subject to her proposed 4% income surtax on income over $5 million.

Gold Has Not Peaked Yuan Renminbi Will Replace The Dollar currency crisis

According to a spokesperson at Canada's largest bank RBC, the current gold price has no legitimate support because they say, it stems from record breaking investor demand in gold ETF 's and a reshuffling of asset positions at Comex.  It sounds as if even the bank's are running low on excuses to justify their bearish positions on gold - They say that without a new risk off event the price should fall back to a long term outlook level of around $1240.

Seraphim's opinion - You want risks ? You got'em !  How about a 180 degree change in the relationship with Russia ? or an admittance that the United States is fighting an entirely different war in the middle east than what's been publicly declared ? or how about a new trade war with China ?  This is just the tip of the iceberg of what awaits the US in the coming year if Donald Trump becomes president as the polls have already tipped in his favor.

At a time when investor confidence is not just low but non-existent, money printing continues unabated, and the US dollar remains overvalued (even if just because every other currency is being devalued so as to boost gdp) 2017 is on track to be the riskiest year of the millennium.
Historically, gold's role proved to be irreplaceable - in protecting national economic security during times of financial crisis, geopolitical crisis, currency crisis.

China Will Use Gold's Unique Position to Elevate Itself

China has long sought to replace the dollar in foreign transactions with its own currency, and that started happening this year - even Canada is on board with its own Yuan clearing bank set up in Toronto.
The ultimate goal however is to usurp the dollar's position in global finance.  The only time that could happen is during a time of collapse in currency markets - even if it is just temporary gold will become the default currency of choice.  If China is the only country capable of supporting its currency with gold (aka the yuan renminbi is gold backed) then the yuan will have won !

Keep Oil and Gold In Your Portfolio, no substitutes renewables world reserve currency

No Oil Substitutes

Oil and Gas - Despite what many western governments and environmentalists are saying, the world has not moved away from oil.  While it is true that many modern vehicles are equipped with hybrid fuel technology, they still depend on gasoline for 80-90% of their fuel needs.  Virtually every home built twenty or more years ago is heated with oil and the cost to change that is high making the change to electricity an additional expense most homeowners simply cannot handle in a depressed economy.  Additionally the more popular modern power generators are only fueled by oil and gas.

Gold - The yellow metal holds a unique status in everything from religion to jewelry to wealth storage.  Even central banks and world governments look to gold as an inflation hedge and trade gold in times of economic trouble (2016 - Venezuela); no other metal enjoys this distinction not even platinum and there's no reason to think that will change anytime soon.  The last time fiat currency wasn't being used world trade relied fundamentally on the gold standard.  With the US dollar losing popularity as the world reserve currency and China looking to gold to prop up its own currency it appears as if the gold standard will once again run the world economic system.

Oil production still powers the economies of many key nations

And these are nations of influence - Saudi Arabia, Russia, Iran, Canada, United States.  Other key countries such as Nigeria and Venezuela are developing vast oil reserves as a source of future economic growth.  As long as oil is available there will be a market for it.  (nigeria oil reserves)

Renewable Energy Sources Continue To Be Too Expensive

With the world economy slumping along there is no reason to expect people to voluntarily shift to expensive sources of energy anytime soon.  Even the cheapest of these - energy derived from corn (corn demand, ethanol) in South America - is already wreaking havoc on commodity prices in that part of the world because it takes too much of the crop to replace just a fraction of the energy it needs.

Dollar Falling Gold Rising price commodities rally silver mining production

What's different about this commodities rally is that it's not just the gold price that's up - gold equities and mining stocks in general are starting to exhibit overall growth, even the ones with known risks kinross, anglogold ashanti.

Get Used To The Dollar Falling

• A deteriorating relationship with Saudi Arabia means we might be witnessing the last days of the 'Petro Dollar' - at best this translates into even less support for US dollar denominated trade.
• China backed gold certificates issued by the BRICS fund gain traction
• The Federal Reserve The Fed losing control of situation it attempts to solve due to plunging interest rates and lack of interest in treasury notes

Diversity Is Important

• Don't limit your purchases to just one company spread it around but do favor companies that already have the infrastructure in place to produce gold since it can take a long time to develop a mine.  
• Also keep in mind that many established companies shuttered a large portion of their mine portfolio over the past few years due to declining prices
• Focus in on companies that weathered the storm and didn't resort to closing mines - in the short run they will yield the best returns.

Don't Ignore Silver

The gold silver ratio exceeded 80 for much of the last year but now with a new commodity bull run starting to take place, the ratio has already declined to 70.  Considering the recent past (10-15 years) the ratio has the potential to decline even further to below 40, leaving the possibility of a 2 to 1 return on silver verses gold.  Demand for silver remains strong but remember that central banks don't buy it - this means that global economic instability is less likely to benefit silver price and more likely to benefit the price of gold.  In the meantime make silver mining companies a priority.

Kinross Gold NYSE:KGC - has most to benefit from a new gold rally.  kept mines despite downturn in stock in recent years - weathered the storm.
iamgold NYSE:IAG - stock suffered more than competitors last five years down 85%.  key mines remain operational and showing robust growth.
Seabridge Gold NYSE:SA - 40 million ounces gold 300 million ounces silver and that's just 2P proven reserves.  any news regarding mine development will double the stock price overnight.
spdr gold trust
sprott gold trust - can redeem shares for physical gold

Stocks to Watch 2016 Valeant Pharmaceuticals nyse:VRX Sobeys tse:EMP.A undervalued

Valeant Pharmaceuticals nyse VRX

Although the specifics regarding Valeant's problems won't be aired out until the company releases it's 10-k annual report in April of 2016, it's safe to say the stock has borne the full brunt of investor scrutiny (high institutional ownership has been a factor).  The biggest risks here on out are revenue growth, write-offs, and lawsuits - but even in a worst case scenario there is no way these three will severely impair earnings for two or more quarters.  Valeant continues to own a number of game changing drugs and products - a non-ownership relationship with Philidor doesn't change that !

revenue stream remains strong this will be key in keeping operating costs per unit within reasonable levels.

- xifaxan is approved
- diversity of portfolio
- global exposure - problems in the USA do not affect Valeant's ability to affect/control prices in other countries.
- sales in China since 2013
- ranks high among diversified companies

Sobeys tsx:EMP.A

The large quarterly write-off related to the Safeway assets should be seen as a one time occurrence; the affect on future earnings is being exaggerated.  This makes it a stock to watch in the second half of the year.

A recovery in the price of oil (will average $45 this year and $72 in 2017) will be a boost to Alberta's economy - big Canadian companies have been able to withstand volatility more than shale companies south of the border/rig count down in USA = less oil glut in North America = more opportunity for Canadian oil price to close gap with WTI.  Since acquiring Safeway, Sobeys has been the number one grocery chain in Alberta.  For the first three months of 2016 calendar year same store sales +0.4% chain-wide despite being up +2.7% in its base of eastern Canada.  2016 has thus far been an extremely volatile time for Alberta's economy (keystone pipeline rejection/oil price dropped to historic low/oil companies slashed capital spending); it is likely that the situation will improve later on this year and into next year.

• price/earnings ratio greatly undervalued versus alternative stocks Loblaw Companies, Metro Inc.

• book value per share is at a discount.

Royal Bank of Scotland Group plc

Since coming off one of its worst earnings quarters in the bank's history the stock is off 30%.  The write-offs which hampered the stock last year will become less of a burden in the future thanks to

• time deadline for claims related to mis-selling scandal (risky loans, payment protection insurance in US) now almost a decade old

• 1.5 billion pounds of the latest write-down relate to a settlement with the US Federal Housing Agency for mis-selling of mortgage backed securities

so expect these write-downs to become smaller over the next 1-2 years which will allow the bank to return to profitability - and perhaps even start paying a dividend.

Risk is not a major factor - the bank is 73% backed by the British government.

Seller Beware China Taking Over companies foreign takeovers technology ChinaChem, Whampoa, Syngenta, Haier, OmniVision

In 2015 Chinese companies took over 103 American companies up from 100 the year before and way up from the average of 43 in the three years prior to that and 13 in the second half of the previous decade.  Total overseas takeovers valued at $110 billion last year up 86% from 2014, led by energy and utilities (worth $50 billion).
There are now serious questions stateside with regards to the intentions of the Chinese - you see, the Chinese government has more direct control over its companies than any other government does theirs (total currency control gives their companies competitive advantage overseas).  China's leadership prioritizes all aspects of the economy with domestic issues taking precedence - this negatively affects innovation and a company's ability to operate freely overseas.

There's also the fear factor - it is not uncommon for Chinese executives to be given the death penalty for making harmful decisions even if they are made accidentally.

Then of course there's the fact that most major companies are indirectly owned by the government itself - RDA Microelectronics is controlled by government owned Tsinghua Unigroup.

A Matter Of National Security

The takeovers now pose a direct threat to United States national security, particularly in the semiconductor industry where China holds a strategic advantage thanks to a series of takeovers which have gifted them advanced technology.  Even China acknowledges sectors involving industrial products and chemicals are critical its leader recently made it a priority to have 70% of these components made in China - China uses 60% of the world's chips (China now has 10 of the world's 50 biggest chip makers up from one seven years ago that rise is coming through takevers, not home grown innovation).

Silicon Valley has another problem here too - The world's other major semiconductor producer is Taiwan, a territory that China wants more control over.

it's not just the technology industry that China's after either - already in 2016 Chinese companies have taken over
1) Europe's Monsanto - Syngenta the world's leader in the manufacture of insecticides fungicides and herbicides bought by ChinaChem for $43 billion after the Monstanto deal was scrapped

2) OmniVision Technologies a maker of advanced chips used in smartphones and cameras. bought by Hua Capital Management for $1.9 billion.

3) Foxconn $6.4 billion takeover of Sharp makes Foxconn less reliant on Apple for its business.

4) Chicago Stock Exchange says it's being sold to Chongqing Casin Enterprise Group for $100 million gives Chinese company access to the US equity market and the potential to take trades away from the other big two Nyse and Nasdaq (by listing new stocks or versions with lower stock prices).

5) Hong Kong's Hutchison Whampoa becomes UK's largest cellphone plan service provider after basically receiving approval for O2 - the European Union rejected UK concerns regarding the deal (since O2 was operated by Telefonica a non UK but European company) nullifying the need for regulatory approval.

6) Just this month China's Haier takes over General Electric's applicance unit for $5.4 billion Haier immediately becomes a global player thanks to the deal.  Quingdao a state owned enterprise now runs the show !

then of course there were other pivotal deals made within the last two years such as Lenovo's purchase of Motorola making it the world's number three player in the smartphone market - this doesn't even take into account Huawei, the world's largest telecommunications equipment maker that just launched its own smartphone the Honor which is already becoming popular in the UK and the Huawei Y3, the cheapest smartphone in the UK

February 2016 : Xiaomi to start selling smartphones in the United States for first time.

United States Losing Companies Not Just To China

Biggest Insurer Chubb Corporation uses Ace Limited Takeover to form Chubb Limited a new Switzerland based company.  That means the United States lost Aon and Chubb to Europe in just two years !

The Canadian Petro Dollar & Alberta Petroleum Industry Oil Price

The first month of 2016 turned out to be quite harsh for the Canadian dollar and those who use it, giving even more meaning to its pseudonym "the loonie".
Unlike the US Dollar which is riding high at the expense of nearly every other currency, the rate given for the Canadian (and Russia) version dipped to just under 68 cents breaking 25+ year lows (early 1990's was the last time the currency was anywhere close to current levels).

You might ask: why is there such a strong correlation between the loonie and the oil price ?  and why doesn't the US dollar share that relationship to oil all things considered. 

ExxonMobil XOM, Chevron Corporation CVX are two of America's largest companies; oil companies represent 6% of the nasdaq 500; 3 of the 5 highest yieilding s&p 500 stocks are oil companies; United States oil production now ranks second behind Saudi Arabia.

look no futher than gdp vs the petroleum industry

Canada may produce less oil than the United States but its economy is nine times smaller and that makes it more dependent on the commodity (7% of gdp directly - tens of billions of dollars in capital expenditures by big oil which for the last five years fueled all of the growth in the only job-creating provinces of Alberta, Saskatchewan).  Also note that the USA only recently started exporting oil abroad - Canada exports nearly all of its oil to the United States thanks to a lack of oil refineries out west (Canada's biggest refinery is on the east coast and there are currently no pipelines going west to east).
Another thing to consider is the quality of oil that Canada produces.  Canadian oil is more like tar - it requires heavy processing before it can even be used by refineries.  This adds costs to usage and makes it less attractive to potential buyers.

What was the perfect set of conditions stateside turned out to be the perfect storm for Canadians

While Americans were being spoiled with 10 cents per litre gas price, Canadians faced rapid inflation thanks to their dependancy on the US for food ($8 cauliflower was commonplace).

Costco Conquers Canada

According to the most recent results out of Costco Canada, same store sales are up by a record 9% twice what it is stateside and triple that reported by Canadian grocery leaders Loblaw Companies and Sobeys.

The Oil Price: Noone Really Knows What's Going On; Russia economic growth usa oil oversupply opec report

Just two months ago, the World Bank estimated in its commodity forecast report that the price of crude oil will average $51.4 per barrel in 2016, virtually unchanged from the average price last year ($52.5), but since then oil has fallen all the way down to $30 with no bottom in sight.

Just this month the price reached an 11 year low for the third session in a row ($36), despite positive news regarding US supply (stockpile down -5.8m barrels vs +1.1m estimate). The price was as high as $110 as recently as 2014 but $30 oil was not uncommon in the 1990's and early 2000's.

Now Opec which represents a third of the world's oil output, is coming out and saying that improved overall demand will lead to a recovery in the price ($70 by 2020).

And Russia - the world's second largest producer - is saying it doesn't expect oil prices to recover beyond $30 in 2016 which says a lot coming from a nation that loses $2 billion in revenues for every dollar decline.

My opinion - Oil prices will swing wildly in both directions in the upcoming years so prepare accordingly.  However peak oil is not the issue.

this opinion is based on

• The USA oil oversupply cannot continue especially at current prices - most oil production increases in the US are attributable to North Dakota shale exploration the pace of which cannot continue at current prices.
• New Canadian pipelines (Energy East Pipeline will allow Canada to fully utilize refinery capacity in New Brunswick / Northern Gateway Pipeline / others) will permanently lower glut of supply in US North Western PADD regions).
• Higher oil exploration costs in general as tradition sources dwindle (shifts from light crude -> heavy oil which requires more expensive processing).
• However
• in much of the world the infrastructure and technology to utilize renewable sources of energy is not yet in place or too expensive to implement.  Furthermore, it is those parts of the world where most of the population and economic growth is happening (Africa, India, Economy of the Arab League).

Platinum Gold Ratio Just Breached 20 Year Low 0.78 Catalytic Demand Price South Africa Jewelry

The recent dive in platinum prices is forcing miners to turn to shallow, highly mechanized new mines.  "65% of South Africa’s platinum operations are unprofitable at current prices".  Making matters worse is the price of electricity - up threefold since 2008.  In 2014 South African platinum production dropped 10% to less than four million ounces - by comparison the country produced 4.8 million ounces in 2011.

But industry demand remains strong having eclipsed eight million ounces last year for just the second time in history, and with South Africa being home to 95% of global reserves, production issues in the country will swing supply/demand in the wrong direction in upcoming years.

platinum versus gold

Demand - platinum is more widely used industrially (catalytic/automotive as well as laboratory equipment)

Supply - depends more on recycling than any other metal - 2.1 vs 5.7 million ounces (total demand ~ 8M ounces per year).  But there are concerns over production - demand for platinum is known to fall during times of economic uncertainty which is more true today than at any other time in past fifty years.  Volkswagen diesel scandal is also weighing down prices - diesel vehicles may not be as popular in the future meaning less demand for catalytic converters - which account for 40% of platinum demand.

Just last month an HSBC metals analyst said he expects "platinum to trade above gold next year"  A discounted platinum price will boost jewelry demand allowing it to take market share away from gold.


Analysts see platinum at $1150 in 2016, $1300 in 2018.

Real Estate Investing Advice Buying Land Opportunities in Canada foreclosures discounted properties

Getting approved for a mortgage in Canada isn't as easy as it used to be.  There are a number of reasons for this

• lower incomes and less job security with the majority of new jobs being in self-employment 
• lending institutions playing it safe by choosing to sit on cash rather than lending it out
• new mortgage rules that require from prospective borrowers a 20% down payment
• shorter amortization period

this is forcing middle class buyers out of the market.

Let's take a look at some of the properties currently up for sale their advantages and risk exposure

Also to consider : the changing attitudes of young people 

the next generation is putting off marriage until well into their 30's; they're also moving to the city choosing to rent rather than buy, and even forgoing the option to take over the family home when their parents decide it's too big for them. 

This, in my opinion, has created an opportunity for smart investors - people who are able to pay for something with cash !

Buying with cash is impossible ? think again - there are a number of properties in Canada that can be had for under $20,000; so if you can buy a car you can invest in real estate - yes, even in Canada :)

Quebec Real Estate Market A Wise Buy

With problems in the oil (Alberta) and manufacturing (Ontario) sectors investors are shifting their focus to Canada's other major market : Quebec - where the population keeps growing (thanks to a thriving student population driven by what is arguably Canada best all around university McGill) real estate remains cheap - yes rental income is lower than than it is in Toronto and even Ottawa but high demand means very low vacancy rates.

Quebec City is proving to be a great option for investors
median income in Quebec City is growing at a healthy pace - since 2009 it has surpassed Halifax, Hamilton, Kitchener, Kingston, has kept pace with Sudbury and is now tied with Victoria.

Why Gold Will Outperform Silver During the Next Economic Crisis price ratio

In times of crises historically, precious metals have been the preferred store of wealth.  Even though silver does have intrinsic value; by being the best store of value a preference for gold inevitably develops - this is especially true if the crisis leads to massive inflation and the rise of radical groups both of which occurred in weimar Germany and tsarist Russia.

There are benefits to owning physical gold but if you're going to buy stocks consider these precious metal companies

Isis, Greece and the confiscation of wealth

As has happened in Cyprus, would've happened happened in Greece if the 2015 summer bailout didn't materialize and is happening in Iraq and other Isis strongholds, the confiscation of wealth makes portability important.  At 75 the current gold silver ratio gives gold the upper hand - being able to move your wealth more easily makes it less likely to be discovered and thus confiscated.

Hyperinflation

if the US dollar - which is by far the world's most relied upon currency - is ever forced to prove its value the way every other currency does (ie the money supply, possibility of insolvency/national debt levels) - rapid inflation the likes of which has never been seen in history definitely could happen.

US dollar losing precedence in international trade

- in 2006 127 countries called the United States their largest trading partner .. that number has since fallen to 76.  In just five years China displaced the US in 51 nations.

- When forming new economic partnerships with countries China is emphasizing the need to bypass the dollar.  Traditionally all trade is done first by converting into dollars, but China has developed new ways of avoiding this.

America's shaky relationship with Saudi Arabia as of late will affect the petro dollar 's unique status.

International trade by central banks

Greek Companies To Invest In national bank of greece nyse NBG OPAP rebound stocks

Greece securing new bailout money stabilizes an economy that was free falling for the better part of 2015.  That creates investment opportunities - at least until September 2016 when all of the current deals expire.

Greek bank stocks stand to benefit from recent developments. August 29 - Greece National Bank Shareholders Approve Recapitalization Plan;  August 11 - The New York Stock Exchange NYSE notified the bank that it must bring its market price back above $1.00 by February 2016.

National Bank of Greece has the most upside but don't ignore the risks
- in 2008 TT Hellenic Postbank aka Greek Postal Savings Bank was one of the world's 2000 largest companies - in 2013 it was forced into liquidation.

Motor Oil Hellas (FRA:MHZ)

- best performing Greek stock since 2012 (price: 3.80->9.0)
- since 2008 is the only 'new' Greece-based company added to the Forbes Global 2000 list.
- least risky of Greece's eight major companies (five are banks most of which were on the verge of collapsing on the eve of the last bailout deal).
- oil refineries stand to benefit from low oil prices (takes months if not years for gas pump prices to reflect lower oil price).  crack spread remains stable.

OPAP SA Greek Organization Football OTCMKTS:GOFPY

gaming stocks

- weathered the global financial collapse in 2007/2008 fairly well (ranked 1009 on the Forbes Global 2000 list in 2008 before eventually falling out).
- worst performing major Greek company stock since new bailout package announced (end of June price: 3.5 -> 4.5 August 14 -> 3.75 August 31)
- Greeks voted to stay in the EU - that benefits the tourism industry which OPAP business is tied to.

National Bank of Greece NYSE:NBG

guaranteed access to EU taxpayers money when facing collapse, bank bailout

yes, this is a very risky investment but the reward could be substantial.  The bank's market capitalization has been cut in half over the last 12 months ($4.2 billion -> $2.1 billion).  Despite ongoing financial problems in Greece, between 2010 to 2013 the stock price spent most of the time oscillating between $25 and $35;  It's now at 67 cents.
Keep in mind this has always been Greece's largest company - that takes away a bit of the risk since even in dire circumstances this is one of the first companies that the government will step in to support.  Consider it Greece's version of a bank that's too big to fail.

- revenue is about the same as Greece's #2 and #3 banks combined
- since 2008 Forbes has routinely called it Greece's top company
- despite new bailout money stock price continued to plummet - to me this is a result of a wait-and-see approach by investors; institutional ownership only 3%.
- End of August: new European Union rule tied to the new Greece deal gives greater economic flexibility to Greece allows it to tap into additional EU funds in order to bailout the most important banks - even going as far as to consider tapping into taxpayer funds from throughout the EU.

Another reason to expect a rebound in the stock price:
The NYSE requirement that ADS share prices of stocks listed at the exchange be above $1.00.  NYSE is threatening to delist the stock unless the company gets the price back up from $0.67 to to $1 (it has six months to do this - expiry date is February 11, 2016).

Israeli & Canadian Pharmaceutical Companies Leapfrog their way to the top Teva, Valeant VRX game changing drugs ms

Attention investors: take a long hard look at Teva Pharmaceutical Industries of Jerusalem and Valeant Pharmaceutricals of Montreal - you won't regret it !

Just last week nyse:TEVA paid $40.4 billion for Allergan's nyse:AGN generic drug business giving the world's largest generic drug maker an even bigger international presence (Allergan was/is present in more than 100 countries).

This also gives them more leverage because more revenue spreads fixed costs over more units of output - which is important in the business of low margin generic drugs.

Though ms drug Copaxone faces increased competition from Novartis and Momenta among others, their proprietary brand continues to grow (last quarter both in terms of sales +12% = 50% of company profit and about a fifth of company revenue) and share of the market for MS prescriptions (31%) - thanks in part to more innovative ways of introducing the drug to patients (3X a week 40mg version vs 6X by competing brands).  And don't forget about the over-the-counter products - Teva has hugely benefited from key partnerships with companies like Proctor and Gamble and even Canada's Life brand (Shoppers Drug Mart).  For instance in Canada products include sea salt for baths.

Another overlooked aspect of the company - it is deeply rooted in Israel and has strong connections with Israeli universities - this is key since these institutions are credited with having developed important drugs such as Copaxone and Azilect.

Financials - Teva was doing well even before taking into considering recent acquisitions - in GAAP terms operating income and net income more than doubled last year despite revenue being stable.  All major metrics have been stable since 2010 with non GAAP earnings per share up steadily : 4.54 in 2010, 4.97 in 2011, 5.01 in 2013 to 5.14 in 2014.

Teva - making Israel proud : The deal for Allergan is the biggest in Israel's corporate history !

Valeant Pharmaceuticals nyse: VRX - merging its way to the top one company at a time - acquiring game changing drugs

According to CEO Mike Pearson, Valeant remains focused on medium sized acquisitions - this, despite the fact that the more recent deals have been game changing (Salix Pharmaceuticals ltd for $10.1 billion) and the tug-of-war for control of privately held botox maker Allergan plc.

July 2015 - Just this month Valeant took control of one of Egypt's leading drugmakers Amoun Pharmaceutical by taking over parent company Mercury Holdings ($800 million deal).

Oil Production USA Beats Russia, Greece Grexit Empowers China sea port Cosco 600428

The USA recently became the largest oil producer in the world, just barely nudging Russia out of first place at just under 10 million barrels per day - a 1.6 million bpd gain versus the previous year making it three consecutive years of 1m+ bpd annual growth in output.  Demand for oil from developed nations was down marginally by -1.2% but up elsewhere including China which experienced a 390 thousand bpd increase yoy.
USA gaining energy independence ! America now produces 90% of the energy it consumes.  Energy imports as percent of GDP : 1% vs 3% in 2007.

Consequences of a Greece Grexit from Eurozone

When Greece leaves the Eurozone any debt commitments it has to Eurozone entities will undoubtedly be scrapped and Europe will lose some €250 billion as Greece will for the first time have the green light to default.  Germany's state owned KfW bank (aka Bankengruppe) will lose €15 billion, France's BNP Paribas (BNPQY) €700 million while Germany's Commerzbank (CRZBY), Deutsche Bank (DB) combine for €700 million.  Credit Agricole (CA) remains heavily exposed with €3.5 billion euros owed to it by Greece.  Societe Generale (SCGLY) is owed €300 million all corporate debt - that's down significantly from €3 billion just five years ago.
In total €24 billion of the debt is held by German banks, with another €18.8 billion owing to private individuals and state institutions.
The aid plan initially called for €270 billion to be provided to Greece - the money has been coming from the IMF, ECB and the European Commission's 19 Eurozone governments.
According to the payment schedule Greece's next payment to the ECB is to be made on July 20, 2015 in the amount of €3.9 billion

Russia, China stand to gain a significant edge in their battle with the West for strategic control of the sea
(chinese navy, china sea ports, greece china)

1. The Greek Merchant Navy controls 16.2% of the total merchant fleet worldwide. Greece ranks first in tankers and bulk carriers.  Any deal for new funding from Russia or China's development bank would undoubtedly involve ports, vessels, and strategic sea routes.
2. Chinese shipping company Cosco Shipping Company Ltd (SHA:600428) already controls 2 of 3 shipping terminals at Greece's main port of Piraeus.
   since Cosco took control of the port in 2007 (for €500 million) business has tripled - this directly benefits Athens, the country's economic center.
3. Greek prime minister recently met with Putin in Russia where he was rumored to have sought out a new Russia Greece deal .  Russia has already secured new bases in Cyprus - bases in Greece which is home to Europe's largest sea ports and naval bases would obviously be in Russias interest.  When Greece votes to exit the Eurozone it will only be a matter of time until the country embraces a new currency.  This will have to result in closer ties with China since the IMF and ECB have already ruled out any future financial support to Greece.

Worldwide Food is Becoming More Expensive

Food prices in Turkey are now 20% higher than the world average - food prices in Nigeria are twice as high this year as compared to last year.  In the United States poultry, eggs, and vegetable staples such as cauliflower have gone up in price - being nudged higher by the two year drought in California and the bird flu epidemic.

 

Australia Gold Production at 11 Year High

Last year production totaled 284 tonnes +4% versus the previous year.  Companies are adjusting to lower metal prices by increasing the grade of ore mined.

Alexion Pharmaceuticals Inc ALXN Organic Growth Potential Kanuma, Transforce Inc TFI a powerhouse trucking company acquisitions

Alexion Pharmaceuticals (ALXN) is a global leader in the development and commercialization of transformative therapies for patients with rare diseases.  Since taking over Synageva Biopharma (GEVA) the company now operates in more than 50 countries.

Last year at this time Alexion was rumored as a takeover target - today it is the one doing the takeovers !

ALXN experienced lots of organic growth during the past few years and that isn't expected to change with little to no competition (thanks in part to successful takeover bids for rivals Enobia and Synageva Biopharma Corp (GEVA).  Also notable is that the company has high institutional ownership (97%) meaning that many of its shareholders are leading investment firms.

What is clear is this - the company is growing fast and no wonder

• it owns the patent rights to three of the hottest (and priciest) drugs on the market for rare diseases: Kanuma (treats LAL a life threatening disease caused by genetic mutations leading to liver and other tissue problems), Soliris ($2 billion in revenue last year just from this one drug) and Eculizumab.  Its latest acquisition has eight other product candidates including one relating to enzyme replacement therapy for patients with MPS a genetic metabolic disease - 30 pre clinical programs in total.
•  recently initiated multinational trial of Eculizumab for prevention of delayed graft function.
•  is on an acquisitions spree !  and the takeovers are aggressive and that's leading to more successful bids.
• June 2015 acquires Synageva for $8.4 billion
• average price target set by the sixteen major equity research groups is $210.07 or 28% higher than the stock is currently trading at.
• price remains above the most conservative estimate of $173 set by Citigroup.
• cost savings from acquisitions will allow it to spend more in the future
• between June 2014 and March 2015 the company's cash and equivalents rose by 50% to $916.81 million with total debt down 40% to $45.5m and long term debt down to zero.
• only drawback is that there are dividends.

latest financials
-- 1q2015 Alexion revenue of $600.3 million beats estimates ($594.4 million).  Earnings were as expected ($1.28 vs $1.32 est).

 

Montreal-based Transforce Inc (TSX:TFI) another growth stock

Canada's largest trucking company has grown into one of North America's three largest transport companies.

notes

• significant growth stateside in just four years (key acquisitions include Dynamex, IE Miller, Concord Transport).
• May 20, 2015 - acquires US based Hazen Final Mile, a last minute delivery company.
• takeover of Contrans Group ($580 million, early 2015) makes TransForce a powerhouse in Canada.
• unlocking value from its waste management business presents unique opportunity for organic growth.

Increasing Oil Production in Canada Despite Price Plunge oil sands, China Revises Gold Reserves renminbi

Like their Saudi Arabian counterparts Canadian oil producers appear to be concerned with maintaining their share of the market, even at the expense of earnings - At a time of record low realized prices, Canada exported a record 3.11 million barrels of oil in January - 13 per cent more than it did in January of last year, and 80% more than in 2010.
Even with a collapse in oil prices Canadian oil production - driven by activity in the oilsands, is expected to increase by 150,000 bpd this year and by that same amount again next year.  Canadian Association of Petroleum Producers

According to ARC Financial, the number of wells drilled in Western Canada will be down 50% this year as compared to last (5,300 vs 11,222).  Though production keeps rising, companies remain burdened with higher than acceptable costs.
- estimates suggest as many as 30,000 workers have lost jobs in Canada’s oil and gas industry since the downturn began last fall.

Keeping production up when oil prices are down is much easier for Iran and Saudi Arabia to do than it is for their western counterparts

• low-cost oil reserves in Saudi Arabia vs high cost reserves in Alberta (Alberta oil) and us shale (North Dakota shale)
• Canada’s reserves may be as massive but they are much more expensive to extract from
• This appears to have had more of an effect on producers south of the border (where shale exploration has officially stalled) than in Canada .. Canadian companies have huge cash reserves which they are they able to dip into when prices get too low .. and so they are able to fund core projects until new cost cutting measures take effect.

According to the latest quarters as of May 2015 company earnings are way down - earnings losses mount in Canada

Suncor Energy Inc (SU) -  1Q15 $(341) million loss or 24 cents per share vs $1.485 billion or 101 per share in the previous year.
Oil Sands operations production was 440,400 bbls/d in the first quarter of 2015, compared to 389,300 bbls/d in the prior year quarter, primarily due to minimal maintenance activities in the first quarter of 2015. Production highlights included 346,500 bbls/d of SCO due to strong upgrader reliability, and record production of 188,700 bbls/d at Firebag.  Cash operating costs per barrel for Oil Sands operations decreased in the first quarter of 2015 to an average of $28.40 per barrel (bbl), compared to $35.60/bbl in the prior year quarter, due to increased production and lower costs as a result of lower natural gas prices,Suncor's share of Syncrude production of 35,200 bbls/d in the first quarter of 2015 remained comparable to the prior year quarter production of 35,100 bbls/d.

UK has lowered its tax rate on oil profits made in the North Sea ! At suncor this saved the company $406 million (62-> 50%).

Cenovus Energy Inc (CVE) - Oil Sands production is up 20% (to 144,000 bpd) but the company endured a massive $668 million quarterly loss recently attributable to the decline in the realized price of oil and natural gas (-47% -> $37.66; -25%-> $4.47).  In the quarter just prior to this one the loss was $472 million.

Top Producers of Shale in North Dakota (Bakken)

• Whiting Petroleum Co. (NYSE: WLL) - quarterly production 1.6 million barrels (19% of company production)
• Continental Resources Inc. (NYSE: CLR) - 127,788 bpd
• Hess Corp. (NYSE: HES) - 63,000 bpd (85% of company production)
• Statoil ASA (NYSE: STO) - 50,000 bpd (9% of company production)

China Revises Gold Reserves (October 2015: China reserves)

- First time in four years China says anything about its reserves

- According to Wood Mackenzie China has 30,000 tonnes of gold, more than any other country.

Since the middle of the last decade China has been leading all countries in terms of gold output - very little of that actually leaves the country.. add to that the fact that China imports another 1000 tonnes of the yellow metal through various ports (HK being the largest) and you can start to see the potential it has to accumulate massive reserves.

• Gold withdrawals from the Shanghai Gold Exchange hit a record high of 620 tonnes in the first three months of 2015. 

• Private consumption in China is probably not that high meaning at least a portion of that is going to China's central bank.  Current estimates put China's reserves at just over 1000 tonnes, far behind the top four countries which have a combined 16,500 tonnes.

• According to various sources out of China, the upcoming report will act to bolster China's currency - This gives foreign currency traders (and governments) more confidence in the yuan-renminbi as an alternative to the US dollar.

• China and Brazil have already signed a $30 billion currency swap agreement.

Bearish Signals Make These Diversified Companies Ripe For The Picking, Royal Gold, Vale SA, Magna MGA, Gold Silver Industry

Seabridge Gold (SA) - Where else can you get 40 million ounces of gold and nearly 300 million ounces of silver with molybdenum to boot for only $286 million ? The company has more gold reserves than Russia !

Royal Gold (RGLD) - despite a crash in metal prices net earnings have been relatively stable; first quarterly loss in years occurred last December and at $6.5 million it isn't anything to be concerned about.

• stable business model
•  cash equivalents up 200% last two years
•  current assets up 90%
•  over the same time frame total debt has barely changed 

-> take note however that unusual expense is up, surpassing $26 million last quarter after being nearly non-existant in previous periods.  watchout for mine writedowns.

Vale SA (VALE) - This company is trading at a 52-week low which is what caught my attention.
- maintains high quality mines around the world - diversified exposure makes it less risky (diversified companies).  Vale is a hortizontally and vertically integrated company meaning that it owns the infrastructure and controls key logistic services used to transport mined materials.

Potash, fertilizers are staples in farming - when basic metals such as nickel and copper aren't performing you can always rely on the sale of material needed to grow food.

Over the last year, Vale (nyse:VALE) is down 58%, compared to only 23% for Rio Tinto (nyse:RIO) and 30% for BHP Billiton (BHP) despite similar circumstances affecting all three companies - don't see why Vale stock should continue to be punished.

Rio Tinto - Mega project Oyu Tolgoi is entering a second developmental phase (first one already reached critical production 733,700 tonnes last year (metal sales +$1.6 billion).

The second phase is worth $6.5b but calls for $4b in project financing for construction.

Safe stock pick of the month : Magna International (nyse:MGA)

Thanks to low oil prices and the cheap Canadian dollar Magna has gained a competitive edge - latest quarterly revenue was up $220 million (+2.4%) despite a 10% decline in vehicle sales.  Net earnings were also up to $509 million quarterly (+11.1%) or $2.44 a share.  on the year the bottom line was even better (per share $6.76->$8.69).

Because of these results, quarterly dividend was upped to 44 cents (16%).  
Take advantage of these results before the company goes through with a planned stock split later next quarter.

Obama Blocks Keystone Pipeline TRP but What Happens When Oil Prices Increase Recovery in 2016 ? opec higher price

Of the many possible scenarios for the future direction of oil prices the consensus appears to be that they will begin to increase within one and two years up to a price range of between $75-$85, which should hold steady for some time thereafter.  By then, projects that the US supply currently relies on (north dakota/california shale/alberta tar sands) will have lost a lot of their investment thanks to the price crash of 2014-2015;

They will require a lot of time to restart - perhaps a year or more. That could mean trouble for US consumers who won't be able to handle the eventual spike in prices, which could last months or even years.  The Keystone pipeline would alleviate much of the supply concerns and don't forget that Canadian oil remains the cheapest available on the market !  WCS is routinely 30%+ cheaper the alternatives West Texas Intermediate WTI and European crude.  Also keep in mind that Canada is home to over half of economically viable oil available to investors.

A 2017 oil price revival
oil price recovery in 2016 ?

According to the International Energy Agency IEA by 2017, the supply demand curve will move significantly in the opposite direction.. this will lead to a rapid rise in US oil output from shale projects : +17% -> 5.2 million barrels per day.

according to key people in the petroleum industry:

..there's "evidence that future production will be curtailed,” chief economist and portfolio manager at Nuveen Asset Management
-- this is already ringing true in Canada where Cenovus Energy has already made two capital spending cuts with heavyweight Husky Energy cutting back as well.

.. OPEC is saying that US gasoline demand will increase 1.17m bpd -> 92.3m bpd next year.

US shale production is being hit hard by the lower price.. in the second half of this year, a lot of marginal barrels will disappear from the market and demand will rise for OPEC.. this allegedly is a result of a decision back in 2014 by OPEC to maintain production levels in spite of the price correction.

Approving Keystone Pipeline Makes Sense

consider the ramifications of NOT having it built AND facing the steep rise in oil price - oil price increase that will happen by 2017

70% of Americans support lifting the present ban on oil exports to Mexico.. among other countries - and this is something the President is currently mulling.  Approving Keystone XL will give America's largest refineries first dibs on 100+ years worth of crude oil reserves (with the best flow through rates) and that makes perfect sense !  even the state of Nebraska, home of the aquifer which environmentalists were initially considering their key to winning the debate, now supports the project after careful consideration convinced even them that the benefits far outweigh any conceivable risks; safeguards include 24 hr a day surveillance, state of the art monitoring/sensor systems, cutting edge pipeline technology - not to mention a new route that puts more spacing between it and the more sensitive areas of the acquifer.

Back in 2012 democratic presidential nominee Hillary Clinton put her support behind it - a future president Clinton will get the keystone pipeline approved !

New Technologies Makes Oil Pipelines Safer (and cheaper) Than Rail For Petroleum Transport

Currently, the Canadian oil that does eventually get down to Houston's oil refineries is coming in on rail cars which makes the end products more expensive to buy.  As illustrated by the October 2014 Lac-Mégantic, Quebec rail disaster, oil-by-rail is not always a safer method of transport.

Reasons to Buy Gold and Silver in 2015: US Dollar, Currency Wars, Russian Reserves, Central Bank QE

Gold and Silver Market Ripe For Rapid Growth

Though stateside gold prices may appear docile, from a foreigner's perspective precious metal prices are already too high because in much of the rest of the world the key precious metals have become a lot more expensive to purchase thanks to currency wars : the mighty US dollar.

Seventy-five percent of silver production (mine production) happens at gold mines - this means that, when gold production slows down (companies shuttering mines which started happening in the middle of last year) silver output declines.  This keeps the gold silver ratio intact despite the delinking of the two metals at London's commodities bourse.

The core price is set by comex, the commodities exchange in NYC and thus is traded in USD.
The fact that the price of both pcm's has barely increased over the past six months in my opinion makes both ripe for the picking ! 
Elsewhere the strong US dollar is making gold increasingly harder to afford, but that's inflation spurred by changes in local currency rates;  though quantitative easing and changes in interest rates are wreaking havoc on other currencies, the USD already has that factored into its value.. with The Fed at its side nothing aside from a shaking of the Fed's basic policy of money creation can shake its value... or of course a tiring by currency traders of the endless excuses for more QE.

In my opinion however, gold should've gained much more than nothing in US dollar terms.  Demand is still rising especially among those seeking a tangible hedge against inflation, as well as by those transferring money out of equities in response to growing global economic uncertainty, a shrinking middle class. 

The Gold Supply Problem

Now there's also the inevitable gold supply problem : let's face it, prices crashed last year - and the big producers responded by shuttering mines, big mines that weren't producing at reasonable cash costs.  Restarting those mines doesn't happen overnight - it can take years to complete new shaft reconstruction, bring in the necessary capital investment funding, and in some cases may even involve reapplying for licenses and approvals.  The big gold companies are now worth a lot less making it increasingly difficult for them to get banks to lend them the billions of dollars needed to make the mines work.  Then of course there's the shareholders who need to be convinced that the metal prices won't collapse again.

As of 2014 there is an estimated 24 billion ounces of silver existing in the form of jewelry.  Total historic production of silver is about 52 billion ounces, eighty percent of that mined since the dawn of the twentieth century.  However, much of the 52b oz will never be available to the bullion market due to its historical value (in the form of religious items, museum pieces, non-scrap jewelry).

India Imports Record Amount Of Gold From Switzerland

According to data from November 2014 Indian imports of gold from Switzerland totaled CHF2.9 billion up a whopping 600% versus the previous year; it's not just that month either, in October it was up 280%; January through November gold imports amounted to 457 kilos.

Russia Continues To Add To Gold Reserves
Russia purchased 20.73 tonnes of bullion in December - note also that in December gold prices were up for the first time in five months (+1%).  Makes Russian reserves fifth largest at 1210 tonnes.
Also notable - Ukraine held onto its reserves after selling 16 of 40 tonnes in Oct/Nov. 

Then there's the other central banks who cumulatively only became net buyers of gold since 2010 after 20 years of being net sellers.

Russia is key here - July through September 2014 it accounted for 59% of the 92.8t of net gold purchases by central banks.  Gold comprises just under 11% of Russian reserves up from 8% in 2013.  Those purchases allowed it to leapfrog China (1150 vs 1054).
Gold imports from HK by China were down last year but it was still the second highest on record at 813 tonnes.  Demand for gold should continue to increase into February as a result of Chinese new year festivities.

Don't Bet Against The Canadian Dollar !

I don't consider the current CDN/USD fxrate to be sustainable -  Beginning in 2016 oil prices are forecast to go up possibly by as much as 50% ($45->$65 per barrel).  Also note that Canada's federal government is starting to run a balanced budget while the USA has a severe, structural deficit which ultimately will lead the United States into a situation where it will be forced to run up high payments to foreign bondholders further weakening its long term outlook.

Don't Let Yesterday's Gold Selloff Turn You Off

- gold responds positively to durable goods numbers
- most global currencies are either under pressure (canada, australia, euro) or being deflated (asia) - this strengthens the US dollar in the near term but makes it increasingly vulnerable over the long term
- when the dollar shows any sign of weakness expect a big jump in precious metal prices
- Greek debt bailout 80 out of 240 billion is owed to Germany - If Greece doesn't pay up Germany will undoubtedly rethink its financial obligations to the Eurozone and that weakens Europe, its central bank and its structure.