Caution needs to be exercised today after the falls in the Dow during the final hour of trade today. From company results released so far it has become apparent that profit improvements are being achieved largely by cost cutting, including more job cuts. The US economy will not recover without a turnaround in consumer spending and that is not going to happen in an environment where people are constantly scared of losing their jobs. It is my belief that the US will have a double dip recession starting next year and this is certainly not priced into the markets. Be careful out there from now on.
Todays Picks BCC/BCCO: Yesterdays announcement that BCC had bought an 8 percent increase in the Lee County project was excellent. It also reaffirmed that the drilling of the first well is on track for mid November. It is still possible we’ll see prices pull back to the low 5’s again with a fall in the general market. I will be buying in the next few weeks.
GOA/GOAOA: With the gold price rising overnight today could be the day GOA starts to move however I will wait for evidence of a rising price on decent volume before buying more.
ATI/ATIO: Still waiting for 4 cents to fall with substantial volume then I’ll buy more.
MHM/MHMO: The strength of buying yesterday surprised me. This is a company which has great potential. I met with Ben Mead yesterday afternoon and was impressed with what I heard. I’ll be looking to build a substantial position in coming weeks.
OVR: With zinc prices hitting $1.00 and lead $1.10 OVR’s time has arrived. 9.3 cents for a company with a quality resource is far too cheap. I expect a sharp re-rating to occur any time. Watch for the lines of stock at 9.4-9.6 to go as a sign that a move is underway.
