is it time to start re-investing for longterm?, page-13

The Apprentice...

The only problem with many of the mid-cap "producers", is they have projects whose cap ex resulted from acquisitions and/or development funded at the top of the market.

Many also have various forms of hedging which was set up when many commodities were cheaper than even today...this is especiall so with gold.

Producers are clearly attractive, they have my vote, but we need to look at their debt,hedging structures...OZL comes to mind.

In many ways, near term producers are far more attractive to me...for the simple fact their cap ex's will be significantly less than those who went before them...and whilst current commodity prices may be soft...this will not last.

In short...a similar project developed now will likely be significantly more economically attractive than a similar project set up near the top of the market, regardless of the price of the commodity concerned.

Many potential producers about...some more likely to achieve production status than others.

Even so...all commoditity based stocks should outperform in the period ahead in my view.

Cheers!