Vancouver Investment Advisor Ritch Wigham

Agriculture Maintains Prominence

This article once again re-enforces my belief that agriculture and associated companies” is and are” the best way forward as the world economies improve. If the economies stall, agriculture will still maintain it’s prominence. The soft prices that resulted this year with what has been a near perfect growing season in the U.S. are not going to last for long and do offer what I feel will be the best opportunity to acquire much of what we consume as CHEAP as it will be for a very long time into the future.

Research Capital Corporation (RCC) makes no representations whatsoever about any other website which you may access through this one. When you access a non-RCC website please understand that it is independent from RCC and that RCC has no control over the content on that website. The content, accuracy, opinions expressed, and other links provided by these resources are not investigated, verified, monitored, or endorsed by RCC.

Mackie Research Capital Corporation (MRC) makes no representations whatsoever about any other website which you may access through this one. When you access a non-MRC website please understand that it is independent from MRC and that MRC has no control over the content on that website. The content, accuracy, opinions expressed, and other links provided by these resources are not investigated, verified, monitored, or endorsed by MRC.

The opinions, estimates and projections contained herein are those of the author as of the date hereof and are subject to change without notice and may not reflect those of Mackie Research Capital (”MRC”). The information and opinions contained herein have been compiled and derived from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. Neither the author nor MRC accepts liability whatsoever for any loss arising from any use of this report or its contents. Information may be available to MRC which is not reflected herein. This report is not to be construed as an offer to sell or a solicitation for an offer to buy any securities. Member CIPF.

Natural Gas: a bottom finally?

Interesting article on Natural Gas, do these arguments suggest a bottom finally?

Follow this link to see the article.
Mackie Research Capital Corporation (MRC) makes no representations whatsoever about any other website which you may access through this one. When you access a non-MRC website please understand that it is independent from MRC and that MRC has no control over the content on that website. The content, accuracy, opinions expressed, and other links provided by these resources are not investigated, verified, monitored, or endorsed by MRC.

The opinions, estimates and projections contained herein are those of the author as of the date hereof and are subject to change without notice and may not reflect those of Mackie Research Capital (”MRC”). The information and opinions contained herein have been compiled and derived from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. Neither the author nor MRC accepts liability whatsoever for any loss arising from any use of this report or its contents. Information may be available to MRC which is not reflected herein. This report is not to be construed as an offer to sell or a solicitation for an offer to buy any securities. Member CIPF.

It’s about time, what was old is new again.

More and more people are turning away from the popular wave of having your investment advisor acting as a middleman collecting fees as they dispersed your money to a largely anonymous group of money managers. Those of us that are here are accountable for our decisions and our advice, and do deserve an opportunity to suggest a new and direct investment strategy developed by your advisor and not a faceless product representative.

See this article from Report on Business for a similar viewpoint from Citi Strategist Robert Buckland.

Mackie Research Capital Corporation (MRC) makes no representations whatsoever about any other website which you may access through this one. When you access a non-MRC website please understand that it is independent from MRC and that MRC has no control over the content on that website. The content, accuracy, opinions expressed, and other links provided by these resources are not investigated, verified, monitored, or endorsed by MRC.

The opinions, estimates and projections contained herein are those of the author as of the date hereof and are subject to change without notice and may not reflect those of Mackie Research Capital (”MRC”). The information and opinions contained herein have been compiled and derived from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. Neither the author nor MRC accepts liability whatsoever for any loss arising from any use of this report or its contents. Information may be available to MRC which is not reflected herein. This report is not to be construed as an offer to sell or a solicitation for an offer to buy any securities. Member CIPF.

Is this a U.S. Market Turning Point?

On Friday we had a release of employment numbers from the U.S.Commerce Department that the market had heavily anticipated for the previous couple of days. They turned out to be market positive and some very interesting reactions ensued.

I spoke (wrote) only last week of the desire of the government to use the U.S. dollar as a proxy for interest rates. Whether that was from direct manipulation or regular market forces is up to the reader. My belief is regular market forces in this circumstance. The Fed got exactly what it desired without ever once having to discuss the need for an interest rate adjustment. (higher rates).

Listed below I have attached links to 5 charts relevant to this article:

• September Euro
• Dollar index
• S&P
• 30 year T-Bond
• Copper

As you can see all these charts are 30 minute charts to highlight the action for the 6th and 7th of August. The 6th was as quiet a day in these commodities as we have had in quite some time and then “BWAM” (Emmeril has copyright on Bam) on the morning of the 7th immediately after the release of the numbers and lack of revision(to higher or more unemployed than had been reported earlier) all “HECK” breaks loose as the market tries to quickly adjust for what just happened. Remember that everyone was worried about these numbers signaling a longer and more protracted recession.

NOTE: There is a huge argument as just how important these numbers ultimately are, all I know is that they always, always, always have a market impact. Therefore we better try and understand what the reaction means, even if we could care less about the number itself. Remember everything big and small always has a market reaction and so consequently we must try and interpret its short term meaning in a broader longer term context.

So the longer time frame numbers were not revised upward and the short term numbers were more mild (newly unemployed) than expected. Result was a very bullish reaction.

As you can see the Dollar Index shot up, the Euro the same, the market the same(S&P) and the Bonds went into the crapper and copper shook off a stronger U.S. dollar.

Simple interpretation:

1. Everyone loves the dollar because the U.S. economy must be pulling out of the recession.
2. That is good for the stock market and the copper. OOPS did I say that
3. The bonds went down and increased their yield. OOPS that’s bad for the stock market and copper because it costs more to borrow and will slow down the recovery.
4. BUT THE MARKET WENT UP ANYWAY, even with a strong dollar and higher yields.

Conclusion:

The dollar acted as a proxy for the bond market as usually a strong dollar is bad for the market. Higher yields are bad for the market and metals and a stronger dollar makes it harder to sell your bonds ( read U.S. weekly bond auctions). For the first time in a very long time this didn’t result in a flight to “QUALITY” and a much weaker stock market.

Lets see what happens from here, but what this is really saying is get off the sidelines or you may be stuck there as your bonds loose value and the stock market goes higher!!!

Talk to you soon.

Ritch

Mackie Research Capital Corporation (MRC) makes no representations whatsoever about any other website which you may access through this one. When you access a non-MRC website please understand that it is independent from MRC and that MRC has no control over the content on that website. The content, accuracy, opinions expressed, and other links provided by these resources are not investigated, verified, monitored, or endorsed by MRC.

The opinions, estimates and projections contained herein are those of the author as of the date hereof and are subject to change without notice and may not reflect those of Mackie Research Capital (”MRC”). The information and opinions contained herein have been compiled and derived from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. Neither the author nor MRC accepts liability whatsoever for any loss arising from any use of this report or its contents. Information may be available to MRC which is not reflected herein. This report is not to be construed as an offer to sell or a solicitation for an offer to buy any securities. Member CIPF.

Well, this pretty much covers it. Cheap still, not for long.

A new article on Potash that I highly recommend you take a look was recently published here on Report on Business.

Mackie Research Capital Corporation (MRC) makes no representations whatsoever about any other website which you may access through this one. When you access a non-MRC website please understand that it is independent from MRC and that MRC has no control over the content on that website. The content, accuracy, opinions expressed, and other links provided by these resources are not investigated, verified, monitored, or endorsed by MRC.

The opinions, estimates and projections contained herein are those of the author as of the date hereof and are subject to change without notice and may not reflect those of Mackie Research Capital (”MRC”). The information and opinions contained herein have been compiled and derived from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. Neither the author nor MRC accepts liability whatsoever for any loss arising from any use of this report or its contents. Information may be available to MRC which is not reflected herein. This report is not to be construed as an offer to sell or a solicitation for an offer to buy any securities. Member CIPF.

What to do about the bond market?

There has been lots of commentary about were bonds are headed to. Needless to say we are at very low bond yield levels. They are historic in my world. They are not super low or historic in broader or longer time frame parameters. I know that records have been set as to low yields but what I am referring to more is the duration of these low yields.

This is really the question. It is all well and fine to suggest that yields can only go one direction, namely higher, but more importantly how long are they going to languish at these levels. If you are a fan of the current stock market, you had better hope that it is for a long time. In my opinion the primary reason for the stock markets current “life” is the willingness for major money to assume a bit more risk. With essentially a losing return against life (inflation, cost of living in general, the price of gas!!) the negligible return one is getting from their bonds just doesn’t cut it. Hence the need to take on more risk. The first leg up in the stock market was from a ridiculously oversold bailout of wanton selling from the end of’08 into the first quarter of’09. The current holding of those gains is the normal re-allocation of funds from the super safe (no return on my money) to the somewhat more risky but higher return potential of corporate bonds and the stock market. This has allowed the market to shake of the need to double bottom that all the pundits were scaring us with over the last couple of months and maintain levels that are very much more comfortable. Simply put, it has allowed those who want or need to take profits to do so as new money has come into the market taking on that risk from the early speculative entrants that have now gone back to side lines. Their problem is that they now have to re-enter the market in new ways at higher levels.

There will be setbacks, but I do not think they will be long term or dramatic.

That of course is the rub. If the market gets to high to quick it will require the Federal Reserve (Bernanke in the states) and our own Governor Carney at the Canadian Central bank to start raising rates and tightening money. This will of course raise yields and reduce the face value of your bonds. The great Central Bank dance. Raise rates and slow the economy, lower rates (or leave them the same) and run the risk of overheating the economy and boosting inflation.

So this is why you better hope that rates stay were they are for a long time, because if they start going higher more money will go back to the bond market as yields improve. There is always a little latitude in what I have just said (give or take a couple of basis points).

So what to do? Well this is what I know:

1. Lock in your mortgage for as long as you are comfortable.
2. Renegotiate it if you can
3. Get some form of coverage for your bond portfolio
4. Or shift some of your funds (bond money) to quality higher yielding preferreds.

There are more specific things you can do but that should be enough for now.

Yours,

Ritch

Mackie Research Capital Corporation (MRC) makes no representations whatsoever about any other website which you may access through this one. When you access a non-MRC website please understand that it is independent from MRC and that MRC has no control over the content on that website. The content, accuracy, opinions expressed, and other links provided by these resources are not investigated, verified, monitored, or endorsed by MRC.

The opinions, estimates and projections contained herein are those of the author as of the date hereof and are subject to change without notice and may not reflect those of Mackie Research Capital (”MRC”). The information and opinions contained herein have been compiled and derived from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. Neither the author nor MRC accepts liability whatsoever for any loss arising from any use of this report or its contents. Information may be available to MRC which is not reflected herein. This report is not to be construed as an offer to sell or a solicitation for an offer to buy any securities. Member CIPF.