The investment year in review

2007 was a good year for precious metals and related investments.  Gold recorded a powerful advance, closing up 31%, just off an earlier high of $845, some 13% higher than my forecast.  Silver reached $16.20 at one point, coming within 5% of my forecast.  I had expected silver to outperform gold, but the reverse happened.

This was the year the mortgage-backed securities market melted down, and gold was viewed as a safe haven against the decline of the U.S. dollar.  But silver was seen as an industrial metal, and with economic weakness ahead, the prospect of lower industrial demand prevented silver from keeping up with the yellow metal.

My old standby Silver Standard closed at 36.53, after having traded as high as 48.  This was a 19% gain for the year, which is good for any stock, but that was just a warmup for this company.  Next year they are expected to bring the Pirquitas project into production, and I expect the shares will be re-rated as a producer instead of an explorer.

The rest of my recommendations from September:  CEF +9.8%, ESPZF -(32.1%), FDPIX +4.3%, GGCRF +11.1%, MVG +6.9%, SLVXF +4.4%, SLW +18.3%, SVMFF +38.7%

A couple of notes for those who are keeping score at home:  SVMFF split 3-for-1, and FDPIX declared a dividend of 2.94.  ESPZF is the only one lower, because the market was disappointed with some pretty good drilling results.  The grades were fairly low (1-2grams/ton) but the length of the intercepts were very good (70-80 meters.)  You can't find bonanza grades like San Luis every time you stick a drill in the ground.  But ESPZF is well financed, has good management, and a JV partnership with Silver Standard, which will fund the San Luis construction.  So I think ESPZF has a bright future, and is very attractive at this level.

Next year?  I see $1,000 gold and $20 silver.  In any event, don't sell Silver Standard unless you are averse to making money.  Once it brings Pirquitas into production, it will be printing money no matter what the price of silver does. 

At this point I will add one more recommendation:  Anatolia Minerals  (ALIAF) has already defined 6+ million ounces of gold, and raised the funds needed to construct the mine.  What could go wrong?  Well, like the name suggests, it's in Turkey, and is subject to all of the geopolitical risks you could imagine.  But if the Middle East doesn't blow up, and Turkey doesn't invade Iraq, and environmentalists don't shut down operations, Anatolia should do very well.

That's all for now.

AOPA's Phil Boyer strikes again

As idiots go, I figure the president of the Aircraft Owners and Pilots Association is in a class by himself.  After supporting Lockheed Martin's bid to privatize Flight Service, now he's upset because LockMart has wrecked Flight Service, and his members can't even do simple things like file flight plans and obtain weather briefings.

Time for Phil (Rip Van) Boyer to wake up.  You supported this.  You wanted this.  Well, be careful what you wish for, because you might get it.  Of course, this is old news; this happened two years ago.  Why am I writing about this now?  Because Rip Van Boyer just testified before Congress, and this is what he said, direct from the AOPA web site:

When Lockheed Martin first took over the system,  things were better than under the FAA. "We got through Hurricane Katrina better that we would have under the old system," Boyer said.

Now if I were a cynic (me, never!) I would point out that Katrina made landfall on August 29, 2005, and LockMart did not take over until October 4!  Mr. Idiot Boyer, that WAS the old system at work when Katrina hit New Orleans.

Someone once told me the world is divided into smart people and fools.  Smart people don't get into trouble because they're smart.  And the fools who know they're fools at least know enough to stay out of trouble.  But the fool who think they're smart - they're the ones who are dangerous, and that's where you can find Phil Boyer.  A fool who thinks he's smart.  Those are the guys who get people killed.

Good luck over there in that alternate reality, Mr. Boyer.  The one where you made the right decision to sell Flight Service to LockMart.

The Bugs who ate the Yankees

I've heard of sacrifice flies before, but this was ridiculous.  Then Yankees were leading 1-0 in the 8th inning when their super set-up man Joba Chamberlain (ERA 0.38) was swarmed by what the announcer called Canadian soldiers.  I can't imagine trying to pitch in a pressure situation with bugs crawling all over your face and neck, but there he was on national TV.  Sure enough, he threw a wild pitch to tie the game, and the Indians went on to win in the 11th inning.  Who is the Indians groundskeeper, anyway?  Alfred Hitchcock?

BTW, these were the prices of the stocks when I recommended them a few days back.

FDPIX 31.34, CEF 9.87, SLW 14.34, SVMFF 20.49, GGCRF 3.50, MVG 14.00, SLVXF 1.06, ESPZF 2.30

So now you can keep score with my recommendations, and a year from now tell me what an idiot I am.  Of course if you take my advice and actually buy any of those stocks, I have to wonder who's dumb enough to follow the financial advice of some bitter ex-controller who spends most of his time ranting about baseball.

BTW, all of those stocks are Canadian companies, which is why most of them trade here on the pink sheets.  I did not intentionally plan that, but every time I found a resource company worthy of investment, it was invariably based in Canada.  Turns out two-thirds of all the degrees in geology are earned in Canada, which may have something to do with that.

But it all works out for the best, because when I started investing my retirement funds in these stocks (thanks FAA for firing me, and allowing me to finally get my hands on that money) the Canadian dollar was worth 80-85 cents.  A couple of years ago, I predicted that when our beloved president George F. Bush left office, the Canadian dollar would be worth more than ours.  As I write this, with more than a year to spare, the loonie is worth $1.02.  You gotta love the job George F. Bush has done on our economy.  Now Canadian stocks are worth 20% more just because they're in Canada.  So I guess it's OK if they send us a few flies to disrupt a baseball game.