RETIRE.FUND: December 2009

Tuesday, December 22, 2009

Early 2010 picks - Encana Resources (gas) , Ballard Power (Green Energy) , Wilan Technologies (Tech) and Apollo gold.

Image by George Eastman House via Flickr

Natural Gas, Gold, and Technology companies went into our Christmas Stocking in 2009 and here are the reasons why they will outperform in 2010.

Natural Gas: This is the green energy solution for the short to medium term (next 25 years at least). It is still a fossil fuel, however, it is 50% cleaner than oil and 85% cleaner than coal. It already powers homes, factories, buses, forklifts, back-up power generators and almost 5 million vehicles worldwide. Natural gas is also the short to medium term fuel for Fuel Cell power until the pure hydrogen problems can be fixed.

North America has just become the best store of gas in the world with world class shale gas deposits being discovered monthly from Texas to Nova Scotia. Encana, a mid sized Canadian company has huge stakes in Texas, Louisiana, North Dakota, British Columbia and Alberta in every major shale gas field that is covered by Wall Street, and sought after by the big dogs. Last month Encana split into two companies, one as a stand alone oil company and one as a stand alone Gas company. The original company, Encana - ECA-TSE has become the gas play and for good reason. It's management also sees natural gas in the same light as this writer, as the short to medium term solution to the Green Energy revolution. It is pursuing this strategy with zeal (along with other competitors in the sector) however it has a broader brush of huge, proven deposits in most of the major fields in North America. Management is focused and determined to become one of the premiere gas companies in the world.

Cramer (mad money - cnbc) has recently recommended Encana as a strong buy and we couldn't agree more. On Dec 18th we bought Encana at 32.69 We believe this will be a home run in 2010.

Gold:

Apollo Gold announced on Dec 18th an update on it's core drills at it's Grey Fox site and those results are excellent! They are now drilling cores at their newly acquired Pike River property which connects it's Black Fox producing mine to the Grey Fox site. The potential is enormous and we believe Apollo gold is at the infant stages of becoming a world class deposit. This reinforces my reasoning for increasing my holdings through December and I believe there is more good news to come in the Q1, 2010 reports.

Gold Analysts from The Gold Report had this company at a strong buy before the drilling at "Grey Fox" even began, with a minimum target price between $1 and $2.79 (it is currently trading at .50) Those estimates were solely based on Apollo's new production at it's "Black Fox" Mine (approx 40,000 oz in 2009 and 100,000 oz in 2010). Now, add to that, the drill results at Grey Fox and Pike River, and you have a world class operation at the infant stage.

I expect those estimates to be greatly revised upwards into the 2010 Q1 reports. When Grey fox and Pike River come on stream they could make Apollo our first 10 bagger of 2010.

Apollo Gold Corp - (TSX: APG / NYSE Amex: AGT).

These Analysts recommend Apollo Gold as a Strong Buy:

1. . . .We continue to recommend the shares of Apollo Gold Corp. with a SECTOR OUTPERFORM rating."
-KERRY SMITH, HAYWOOD SECURITIES

2. "We have left our assumptions for 2010 unchanged, resulting in no effect on our $1.00 target price and SECTOR OUTPERFORM rating" for Apollo Gold.

- -TARA HASSAN, M PARTNERS

3..."Apollo Gold is very much a strong buy, an aggressive buy"."We think this company's Black Fox Mine, from which management expects to produce more than 100,000 ounces this year, represents the beginning of a world-class gold mining operation in the making. We say that on the basis of upside exploration potential not only on the producing Black Fox Mine but also on the basis of drill results from the Grey Fox and historical data from the Pike River Property, which Apollo recently acquired from Newmont. The combination of these three properties stretches out over 3.5 kilometers along strike. Moreover, mineralization is open at depth."

"If Bob Hoye is right and we start to see a major takeover craze beginning next year resulting from rising gold mining profits, companies with gold in the ground and with the kind of exploration potential Apollo has may suddenly be targeted very aggressively."

-Jay Taylor - J. Taylor gold Letter.

Other References: The argument for Gold,

Simply put, Apollo Gold is not just a gold play. It is a growing producer of a commodity that is under pressure around the world. that makes it a great takeover target for 2010. that is why we bought more Apollo Gold in December at .51 and .52

Technology Stocks:

We continue to increase our holdings in both Wilan Technologies and Ballard Power Systems as they both have a unique position in their respective markets.

Ballard Power - This first mover in the fuel cell industry Which has spawned a number of other fuel cell companies sometimes referred to as "Baby Ballards" has shifted it's focus to industrial uses for it's back-up power generators and is currently in production of 10,000 back up power units for the wireless industry in India. That contract alone will propel Ballard forward in 2010, but there is much much more.

Besides selling Fuel Cell forklifts to factories around the world at this writing, Ballard has great potential for building large fuel cell stacks that can actually replace coal, oil and nuclear power plants around the world. Such plants will at first utilize natural gas as fuel (see above-Encana) until the pure hydrogen problems are fixed. They also just completed the sale of a fleet of fuel cell buses to the city of Vancouver and no doubt, you will see coverage of this technology during the winter Olympics in February.

Look for Ballards stock to spike During the first week of February as the world is made more aware of Ballard during the Vancouver Olympics as their fuel cell buses carry athletes and spectators to Olympic venues and the international news runs stories of it's technology and numerous patents in the fuel cell sector.

Wilan Technologies is a "patently valuable company for the 21st century". Simply, it holds over 750 patents in wireless and internet technology including docsis, wimax, wilan, DSL, blue tooth, vchip and many more. Inventions in their portfolio are licensed by companies that manufacture or sell a wide range of communication and consumer electronics products including 3G cellular handsets, Wi-Fi-enabled laptops, Wi-Fi/DSL routers, xDSL infrastructure, WiMAX base stations, Bluetooth-enabled devices and digital television receivers. Over 210 companies, including Cisco, Nokia, Panasonic, Samsung, RIM, Sharp, Sony and Toshiba, have licensed WiLAN technologies. We think this is a $10 Stock (maybe more) trading currently at a very undervalued $2.40

The above noted stocks are, in our humble opinion, very much undervalued.

The Big dogs haven't yet taken notice of them, with the exception of Encana which is covered extensively by a number of analysts who have rated it a strong buy.

Hope you have a very Merry Christmas and a Happy New Year!

Tuesday, December 8, 2009

Cleantech and Green energy just got a major boost in the USA

Image via Wikipedia

On Monday, December 7th, the Environmental Protection Agency officially declared that greenhouse gases pose a danger to human health and the environment. So, what does this have to do with your Retirefund?

Well, this otherwise simple, common sense statement, will have a big impact on the Green Energy movement, and has a whole lot to do with your Retirefunds and "all" investments in the USA (and around the world) for the foreseeable future. Here's why!

As President Obama prepares to attend the Copenhagen Summit, Cop15, with other world leaders, he will not be hampered in his promise of green house gas reduction in the U.S. by having to submit those proposed limits to Congress. Because of the EPA declaration, legal changes can now be made to reduce carbon dioxide and other green house gases mentioned in the declaration as they are now considered a threat to the health of Americans and therefore can be addressed merely by EPA regulations. Congress won't like it much, but the environmental movement will and so will your green energy investments like wind, solar and fuel cells. Call it an addition to the Obama Effect.

Now, when Obama visits Copenhagen, other countries looking for excuses, won't have the excuse that he can't get his promises past the U.S. Congress, because he doesn't have to. It is a catalyst for those other procrastinators (like Canada, China, India and Russia) to get on board the Green energy bandwagon.

Canada, however, may have more to worry about than most other countries. You see, when you sleep with an elephant, and the elephant roles over, you get squashed. I am speaking about "Cap and Trade" which is sneaking into the American lexicon as a mid term solution to Global warming. It is President Obama's mid term answer to the problem and American business may be more receptive to it than allowing the EPA a free hand in setting limits. It may well be that Cap and Trade is merely another attempt at American protectionism only this time, dressed in Green. Canada could be a big loser if Cap and Trade is adopted in the U.S. as Canadian suppliers of raw materials and energy end up paying carbon credits to American companies they are selling to or dealing with. More on this later.

For now, the sun is rising over a new Green Energy agreement in Copenhagen. An agreement, any agreement, will have a major affect on your investments in oil, coal, wind, solar, nuclear and fuel cell power. Chose wisely, but choose now.

Your Retirefunds depending on it.

Monday, December 7, 2009

Put some Apollo Gold in your Christmas Stocking. Your portfolio will love you for it!

Image via Wikipedia

Updated Dec 18th 2009 -The price of Gold is going up again, even though the talking heads (cnbc etc) are starting to tell us that King dollar is coming back. They must be only looking at their 3 month charts because they couldn't be more wrong about the dollar or about Gold (or other commodities for that matter) and here is why!

The elephant in the room is this: America is over $12 Trillion in debt and climbing. Check out the U.S. Debt Clock! If America does nothing to stop the bleeding, it will be $23 Trillion in Debt by the year 2020, more than 100% of GDP (that's only 10 years out). Now consider these 800 pound gorillas in the room trying to make space around the elephant:

1. The U.S. Fed is still propping up markets, and making massive asset purchases like mortgage backed securities while fully 25% of mortgages are underwater, and that number will increase through 2011 by all projections.

2. There are 2.4 $Trillion in ALT-A (Liar) Loans and sub-prime mortgages still out there and most don't reset until 2010 through 2015. If the Fed was not propping up this market including Fannie Mae and Freddie Mac, it would start another stampede for the exits. If they continue, then add that $2.4 Trillion to the debt numbers above. If they don't, just watch as millions more lose their homes.

3. As commercial real estate companies loans come due this year, they will run into a wall of re-financing problems as their lenders won't want to extend more credit, or will demand more security, or both. Only the strong will survive.

4. The banking industry expects up to 1,000 bank failures in 2010, because of the mortgage fiasco. Not last year, next year!

5. Many big financial institutions (remember all those who were "too big to fail") are still virtually ignoring the massive derivative debt on their books as they pay back those Government loans. (Yes, they leave them off of their books as if they didn't exist at all) They will have to be accounted for at some point. As that reckoning occurs, this problem all by itself will cause the dollar to drop.

6. The USA is still fighting two wars, on three fronts, after the President who launched both of those wars did not raise taxes to pay for them but, on the contrary, made two massive tax cuts in the middle of those two wars, something no other U.S. President had ever done throughout it's history.

7. The new health care bill will cost at least $1 Trillion dollars over 10 years.

8. Americans pay about 25% of the cost of Gasoline that the rest of the world pays.

9. The price of Gold is denominated in U.S. dollars.

The above really only addresses the American market, but the world of business has grown much larger. India and China are increasing their Gold reserves by huge amounts as they no longer trust the value of their U.S. dollar reserves. Brazil and Russia are doing the same. Russia has even added Canadian dollars to their reserves as the world tries to diversify around a falling U.S. buck.

These rising powers are also buying up commodities, oil, gas and mining companies. China has told all of it's 1.3 Billion citizens to also buy gold for their savings. India used to be the largest retail gold market (for it's dowry practices etc) but now China has taken over the number 1 spot.

Some market bulls believe Gold will top out somewhere between $2,000 and $5,000.

An inflation monster is coming and most of all the gold in the world is already above ground. That makes producing gold miners, expecially the juniors, takeover targets for the big dogs.

The "Cash is king" mantra is a distant memory.

Reuters- BreakingViews: Could Gold go to $5,000 per oz?

Updates:
Dec 10th - Purchased more Apollo gold today. (APG-T)
Dec 15th - Gold price rose
Dec 16th - Gold price rose
Dec 18th - "Apollo Gold building a world class deposit could be takeover target for the majors"

Tuesday, December 1, 2009

The smoke is clearing over Copenhagen and the COP15 Green Energy Summit!

Image by TailspinT via Flickr

The world leaders who will meet in Copenhagen next week for COP15 (United nations Climate Change Conference) or what is billed as the Green Energy summit, have now all committed to at least some reduction in carbon emissions over the next decade. The United States, who virtually ignored the Kyoto Accord under President George W. Bush, is actually leading the push for carbon reduction this time as President Obama has already pledged a 17% reduction by 2020.

China followed suit with a pledge of their own and even India, albeit with a much smaller promise, is on board. Canada will follow the U.S. (it really has no choice) and Europe has already done more than all of the above in the push for carbon reduction in our atmosphere and the Green Energy revolution which is supremely evident as you take the Euro train from Hamburg to Berlin and pass literally thousands of wind turbines churning out power along the way.

Companies that have completely embraced carbon reduction and the concept of green or renewable energy which is non polluting (or at least carbon reducing) have gained significantly this year and stand to profit immensely in the coming years. Some of these companies resemble those who embraced the information revolution in the early 70's (Microsoft, Apple etc)
or the web revolution ten years ago (Google, Yahoo etc)

It is my humble opinion that this Green Energy revolution has the potential to top those previous market movers as the planet begins the long, arduous road to cleaning itself of carbon pollution. Soon photo's like the one pictured here, of a fuel cell a powered airplane, will be commonplace. Wind, Solar, Fuel Cells, these are the winners and the future of energy for the next ten years. The losers will be coal, corn ethanol, biomass and oil. Nuclear energy, while still being debated as an also ran, has the potential to be eliminated entirely by fuel cell power plants burning, at first, natural gas (which has an abundant supply of hydrogen and produces less pollution) and finally, pure hydrogen, once the storage issue is resolved (and it will be).

If you are not on this green energy bandwagon right now, then what are you waiting for? It will not only change the way the world powers itself, but also the way the world invests in energy. There will be big winners and big losers. Where do you want to be positioned as COP15 approaches and green energy, once again, enters the world spot light.

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