prima holding well, page-25

Possibly not InToWin.

Below are excerpts from an analysis piece done on the European issues, quoted in a 'Thoughts from the Frontline" (a weekly e-letter from John Mauldin expressing his opinions) weekly.

Agree or disagree, his analysis is interesting.

"The economic cost (part 1)"
"The cost of a weak country leaving the Euro is significant. Consequences include sovereign default, corporate default, collapse of the banking system and collapse of international trade. There is little prospect of devaluation offering much assistance. We estimate that a weak Euro country leaving the Euro would incur a cost of around �9,500 to �11,500 per person in the exiting country during the first year. That cost would then probably amount to �3,000 to �4,000 per person per year over subsequent years. That equates to a range of 40% to 50% of GDP in the first year."

"The economic cost (part 2)
"Were a stronger country such as Germany to leave the Euro, the consequences would include corporate default, recapitalization of the banking system and collapse of international trade. If Germany were to leave, we believe the cost to be around �6,000 to �8,000 for every German adult and child in the first year, and a range of �3,500 to �4,500 per person per year thereafter. That is the equivalent of 20% to 25% of GDP in the first year. In comparison, the cost of bailing out Greece, Ireland and Portugal entirely in the wake of the default of those countries would be a little over �1,000 per person, in a single hit."

"The political cost
"The economic cost is, in many ways, the least of the concerns investors should have about a break-up. Fragmentation of the Euro would incur political costs. Europe's 'soft power' influence internationally would cease (as the concept of 'Europe' as an integrated polity becomes meaningless). It is also worth observing that almost no modern fiat currency monetary unions have broken up without some form of authoritarian or military government, or civil war."

What does this have to do with PRR? Well, the above opinion piece is interesting, but is just one in a line of opinions of what could happen. Friends that I discuss this with fall into a, "the situation will be resolved, eventually" camp, or fall into a, "the situation is so dire that the global financial systems are going to collapse" camp (aka the "build a bunker and stockpile weapons and food" camp).

I fall into the, "the situation will eventually be resolved camp". Why? Well, you can use the data to argue for either camp, but I'm generally an optimistic individual, hence my choice. Plus, the largest hole I can ever see myself digging is for a lovo/hangi (earth oven) so a bunker is out of the question. So, I have made a deliberate decision not to move any of my holdings to cash. In fact, I'm looking to buy other beaten down spec stocks, with two broad criteria. Their fundamentals need to be strong, and they need to be well funded (because fund raising period, let alone on favourable terms, in a recession is going to be a b****). Guess what, PRR fits right in my investment criteria wheelhouse.

Thats a pretty loose connection i know, but it's Saturday, I've had a couple of beers and strangely, I miss BigRedRoo's sometimes paranoid, frothing at the mouth postings.

It's a tough market right now. Good luck to everyone, traders and investors both. I hope it works out for you, regardless of your strategy. Cheers.