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Market. Looking at his “S&P 500 Price to Book” chart, it shows that the S&P 500 has gotten back up over the 2X Book Value and is trading once again between 2 and 2.5 times Book, where it traded for nearly all of the early 2000’s. For those people who think the market is really expensive, it has been here before and has actually been a lot higher. The question is, are the earnings going to come through. Looking at the 1st lot of the S&P results, there is a really interesting phenomenon. Earnings are coming through at about a 10% growth rate, but the growth in sales is about 1%. This means companies are earning money, but not generating activity. This indicates it is not going to be the fast recovery that the Fed would have us like to believe. The market is just in a comfortable place. If we saw the market dropping 8%-10%, there would be something like a 3 alarm fire at the Fed and we would see a renewal of aggressive quantitative easing.

COMMENT

Just started production again at Cigar Lake. In the very short term, this company has given us everything we had been looking for. The problem right now is that there are not enough earnings, which is needed to drag the stock further. However, if the Japanese are going to reignite their reactors, then the outlook is interesting, but we do need earnings now. The stock currently is fully valued.

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Uranium. His opinion on nuclear reactors is that they are things we have to have. We can’t have a planet that is being polluted by coal and we can’t keep burning up natural gas, etc. In the long-term, nuclear reactors are really important. The problem is, the fears overhang the whole industry.

COMMENT

Stock is getting expensive on his calculated Fair Market Value. Not overvalued. It pretty much got to about where he thought it would get and is peaking out at about 4X Book. What is interesting is that the healthcare index is at exactly the same place. The issue is whether they can break out. This company needs more earnings. He is watching it quite carefully.

COMMENT

Produces primarily copper, zinc and lead. A lot of what is going to happen in the base metal sector is going to be dependent on the hope for global recovery. When Canada burst out of the stocks on Jan 2, everything kind of came up because there was a general hope of a nice global recovery in global growth, which would carry the metals higher. That has come under some cloud lately because of issues in China. Fair Market Value is a fair amount higher than its current price, but right now it is just balancing. Good potential but……

COMMENT

People have to eventually realize this is not just a PC company. Certainly cheap on a PE basis. Had a big write off a little while ago which knocked the Book Value down but their return on equity is high, PE is low and if you get some nice returning confidence into the high tech sector, then this remains fairly cheap, about 1.5X BV.

BUY

Looking at all the Cdn banks right now, they all have that long, lovely, slow upward sweeps. Not only upward sweep in price, but also in Book Value. That will tend to carry on until the end of the market, whenever that is. At that point however, the nice benign behaviour stops and they take on tremendous volatility and they tend to fall very, very rapidly. This is currently probably in the 60th percentile off the bottom. Definitely up but not widely expensive right now.

COMMENT

The spinoff of Clearwater will be a nice cash influx for the company. Stock has been trading right up against 2X BV so it needs something now to get going. It needs to employ that cash wisely. Hope they don’t pay it out in the form of dividends, but use it because they have a lot of stuff inside that could be developed.

PAST TOP PICK

(A Top Pick Jan 18/13. Down 29.73%.) If you get gold back up to $1600-$1800 again, we may have an entirely different outlook for the company. Earnings will certainly rebound as there is tremendous earnings leverage.

PAST TOP PICK

(A Top Pick Jan 18/13. Up 20.12%.)

PAST TOP PICK

(A Top Pick Jan 18/13. Up 25.56%.) This was cheap on a Price to Book basis. The kicker here was what happens if interest rates go up.

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Banks. When you are looking at the banks, you always try to buy the laggard because banks tend to move together. If you wait a while and let some banks go and then you buy the laggards, usually you will get a catch up, and you’ll probably beat the average bank stock. He has been using the strategy for decades and it is just amazing how it works.

BUY

Likes this one and likes a lot of the US banks in general. Fairly recently, the market has confirmed the quality of their balance sheet. The stock remains cheap relative to its history. Looking ahead, you should be able to realize, maybe $14, at some point during this year or early next year. Thinks this is going to happen with all of the US banks. They are slowly healing themselves.

DON'T BUY

This is meant to give you twice the daily performance of the VIX Short-Term Futures. This is a “Mugs” game. If you are going to be really right on this, then there has to be a sharp increase in volatility of the market.

DON'T BUY

Fairly expensive from a historical perspective. Doesn’t know what you do with this stock. It has some upside potential, but on the whole, he would rather be in Poughkeepsie. Trading at 3X BV, which is about its long-term average high.