Growth Stocks Weekly


2009	(50.3%)
2008	(25.2%)
2007	8.8%
2006	153.3%
2005	28.2%
2004	166.7%
2003	28.8%
2002	18.7%
2001	(50.5%)
2000	180.9%
1999	39.4%
1998	36.4%
1997	28.1%
1996	116.9%

Latest Updates

2010-02-25 - Junior Gold and Natural Resource Sector Report - Petromanas Energy (PMI-TSXv): Albanian Oil & Gas (94KB)

2010-02-02 - Junior Gold and Natural Resource Sector Report - Encanto Potash (EPO-TSXv): Update (76KB)

2010-01-29 - Junior Gold and Natural Resource Sector Report - Endeavour Financial (EDV-TSX): From the Ground Up (112KB)

2010-01-14 - Junior Gold and Natural Resource Sector Report - Donner Metals (DON-TSXv): Update (108KB)

2010-01-11 - Junior Gold and Natural Resource Sector Report - Rusoro Mining (RML-TSX): Update: Devaluation Good News (82KB)

2010-01-04 - Junior Gold and Natural Resource Sector Report - Catalyst Copper (CCY-TSXv): Historic Mexican Copper (90KB)

2009-10-31 - Junior Gold and Natural Resource Sector Report - Petroamerica Oil (PTA-TSXv): Initial Report: Positioning into Colombia’s Oil Fields (109KB)

2009-10-02 - Junior Gold and Natural Resource Sector Report - Endeavour Financial (EDV-TSX): Update: The Smart Money (99KB)

2009-09-22 - Junior Gold and Natural Resource Sector Report - Donner Metals (DON-TSXv): Ripe for the Picking (132KB)

2009-08-13 - Junior Gold and Natural Resource Sector Report - Duncastle Gold (DUN-TSXv): Initial Report (96KB)

ur passion is uncovering well-pedigreed, early-stage, small-cap growth opportunities with limited downside. Our objective is to position ourselves in a timely manner through a combination of strong fundamental skills and proven technical analysis.

Investing is not a game of logic. It is a Wall Street legend that scientists, doctors and lawyers - logical people with education and occasional intelligence - do worse in the stock market than dart throwers and coin flippers. That is because the stock market is not a game of logic, but rather a challenge of understanding the mass mind, and thereby being able to anticipate it for profit. While this equally applies to trading, we first use our understanding of this to time the big cycles - the tides.

For the better part of two decades, the CRB's down-trending overhead resistance zone kept a lid on the CRB. The subsequent decisive breakout of the CRB Index on the long-term chart was enormously important - looking ready to challenge new all-time highs last seen in early 1980. But are the 1980 highs comparable to an equivalent high two-plus decades later? Hardly, given the continuing erosion of the U.S. dollar's purchasing power.

Nixon opted for a pure fiat currency in 1971, de-coupling the U.S. dollar from its gold backing when France came a-calling with excess U.S. dollars in hand - effectively reneging on the U.S.'s Bretton Woods promises.The inevitable result has been a relentless erosion of the dollar's purchasing power. Please refer to our annual April 30 year end Portfolio Editions for our discussions and observations along the way - especially these last seven years.

In a true resource bull market, gold and commodities rise versus most currencies, all things equal, and while we waited and watched for this for several years, we finally saw this in 2007. 2006's relentless gold and resource price appreciation in the face of a counter-rallying U.S. dollar was the final proof we needed - this commodities bull market is secular in nature. Certainly, like during the '70's, we need to expect severe corrections, which create opportunities, but the trend will be your friend for many years to come.

As the bear market in the U.S. dollar gathered renewed strength, breaking key long term support on the Dollar Index in 2007, the Fed and Treasury in the U.S. panicked, and went to work to protect the currency - with the July 2008 well-orchestrated coordinated attack against the over-leveraged resource-sector-invested hedge funds, and the U.S.-dollar-short carry trade.

While gold and commodities had been soaring for their own reasons - it was primarily the dollar that was crashing, notwithstanding the occasional counter-rally. The U.S. dollar's massive late-2008 rally, effectively a "short squeeze" of over-leveraged hedge funds, forced massive liquidation and a repatriation into the U.S. dollar to repay loans. This hasn't changed the longer term need for the US dollar to decline further.

Gold's bull market is maybe in the middle innings. In fact, it lagged against most other commodities over the years, mostly because of Central Bank selling and timely intervention. It's the demand and supply sides of the equation that will support the true trend for Gold and other commodities in the end, but the U.S. dollar devaluation must and will go on.

The U.S. still continues to mortgage its children's future in an effort to maintain world influence and avoid a painful downturn long overdue. Maybe things will be different with Obama, but it will take a lot of fixing over many years, and meanwhile it's in no ones interest to allow a Japan-style deflation to take hold.

The Greenspan "put" has been adopted by Fed-head Bernanke and Treasury chief Geithner - bailing out the banking system and U.S. consumers at the cost of the U.S. dollar is the only palatable option.

On the headline-grabbing energy side, in 1993 China became a net oil importer, just like the U.S. More than half of China's 26 provinces are now facing critical electricity shortages.

China is the 2nd largest energy buyer in the world, after the US. By 2003 China already drove 35% of global oil demand. China's oil demand is expected to double again by 2010, and its electricity demand should quadruple by 2020.

The U.S. burns through over 23 million barrels of oil per day. Asia - with a population 10 times larger than in the US, only burns through 19 million barrels of oil per day. It will likely double that over the next 10 years.

Similarly, in the last few years China's steel imports skyrocketed to an international record... its copper imports exploded by 48%... iron ore, platinum, palladium, iridium, alumina supplies are being squeezed.

China needs resources. Without oil and other commodities, the Chinese miracle is over! And that alone virtually guarantees massive demand and commodity price hikes all around the world. China's awakening middle class is going through a combined industrial revolution and something akin to the U.S.'s nifty '50's infrastructure build-out, only much, much bigger. And it's achieved critical mass - now unlikely to be materially derailed by U.S. economic ills.

Then there's India's awakening, Japan's increasing demands, the difficulty in finding new exploitable resources, the official formation of the ASEAN free-trade zone ... I can go on and on about this fascinating opportunity.

All this and the U.S. is the world's largest debtor, yet still providing the world with its de facto reserve currency. And now there's increasing evidence that Russia, China and Japan and others are trying to reduce their exposure to the U.S. dollar. China's US$1.8 trillion in foreign reserves alone is effectively a neutron bomb awaiting to be dropped on the U.S. economy.

The U.S. stopped publishing its broadest measure of monetary growth in 2006 (M3, which included repurchase agreements - the primary tool that allowed Wall Street banks to lever their balance sheets as much as 35 to 1). Independent researchers Shadow Government Statistics estimated U.S. money and credit growth of 15%-plus even before the recent credit crisis.

No amount of new money and credit creation and delivery into the banking system or the housing market will save the U.S. dollar. Indeed these actions will only destroy its absolute value faster. Global wealth (deferred purchasing power) is being destroyed as money and credit are being created.

Destroying wealth through devaluation / inflation is the only way out for America. It would greatly benefit from inflation as new money and credit inflates away the current public and private sector debt burdens. Policy makers would be foolish not to inflate when the U.S. is so deeply in debt and has a negative savings rate. We remain convinced the current U.S. monetary policy is to inflate, inflate, inflate.

Most professionals and economists never learn the lesson of the market's amazing ability to discount, to look ahead. This ability is counter-intuitive -- it goes against our emotions. When the newspaper headlines scream how bad things are, the market should fall apart. Right? That's the amateur's emotional reaction. Most people buy and sell stocks based 90% on their emotions. In this business, your worst enemy is your emotions.

Only knowledge and discipline can save you from your emotions in the business of investing. The market DOES NOT LIE! Instead of lying, the market uses subterfuge and counter-intuitive action so to throw us off the path. You must never trust the obvious when it comes to the stock market. The market uses the obvious to throw us off the path, to part us from our money. For this reason the only valid study of the stock market is a study of the stock market itself, and that means the psychology of its participants. This is where it gets complicated, or does it?

The stock market pits amateurs against professionals and professionals against each other. When pros are pitted against other pros, some win and some don't. How can amateurs expect to beat professionals? When you see something that appears to deserve an obvious reaction in the market -- you must distrust it. Nothing in the market is obvious; if it was, every amateur would make money in stocks. The market will often already reflect what you are only now concluding. For me I learned long ago that charts and technical analysis is the window to consistent profits, but I still need to constantly remain vigilant to overcome my own emotions, prejudices and biases – to literally ignore the "noise" and focus on the message of the market. And I still have a tendency to get married to deals - which means I ignore the charts. I hate when I do that, but I must say some of my biggest winners are ones I stuck with. Unfortunately, also my biggest losers!

So what's the meaning of gold's current trading range, or even weakness -- in the face of the world's monetary crisis? It does seem to be marking time here – seemingly awaiting a better indication as to the outcome of the battle being fought by the world's central banks - led by Bernanke and the US Federal Reserve.

Funds and individuals have certainly been using gold to raise cash, as gold offers a ready source of liquidity. This is simply the human tendency to sell your winners, as gold has proven to be year after year since its 2001 bottom. Periodic days of gold sell-offs are also reminding us that the Fed may yet fail to halt deflation, and that deflation is a strong trend and force yet to be overcome.

For about 60 years, ever since the end of WWII, Americans in particular have been building up debt and leveraging their assets. The bear market signal of late 2007, in hindsight, was a great margin call on what was the greatest debt build-up in world history.

We're going through a massive de-leveraging process. Trillions of dollars of debt built into the US and world economy over a long period of time is in the process of being squeezed out. So far the US Fed and the Treasury have been unable to halt the deflationary trends, but the market realizes it takes time for the process to work through the system. Meanwhile, the reaction of investors and the public is fear and flight, and to protect themselves by liquidating everything tradeable and trying to build up cash and pay down debt.

We see the current bottoming formation in the bell-weather Dow Jones' Indices as a "resting area". The market is stalling for time while the Fed and the Treasury work their rescue plan. If they are successful, the lows of November 20 will hold. If the Fed and the Treasury fail, the bottom will fall and markets will need to find a new bottom - possibly significantly lower yet. What the US needs is a currency devaluation, and if it gets this, gold should move much higher and the equity markets will eventually rally as measured in dollars, which are of course worth less and less.

Never doubt the stock market's ability to discount the news -- sometimes six months to a year before the actual events. The strongest market is the one that can hold fast or rise against a background of bearish news. We see some evidence that this is now the case, but we need to remain vigilant. In either case, non-leveraged investments in the things people will always need, relying on fundamentals to be sure, but getting the low-risk timing right through our charts, remains our focus. These last few months once again proved out the soundness of our long used approach, notwithstanding the massive setback of the previous year. Onward and upward.

We uncover the next solid winners...

Please visit our Sample page for some of our Resource Sector Research Reports, periodic Portfolio Editions, and some of our widely-published economic blogs ... read more...