interesting times...

Hello to all from up in the Curry...

Sorry for not posting recently...I have been somewhat busy for the last 4 months or so and most days, when I might find as much as 10 minutes for a break, I am usually in the field and away from the computer.

It was great however to catch up with a few of you recently at the CuDeco AGM...and of course, in the days prior and post AGM out on site.

I sure you can attest to just how busy we all are up here...and how finding even 5 minutes to post can be near impossible. There are no long lunches up here...in fact, there are no lunches at all come to think of it!

So, for not posting...or even reading posts of late for that matter...I do apologise.

To be perfectly honest though, the break from the markets (and hotcopper) has been rather refreshing...to the extent I have not even really had the energy, nor felt the desire, to re-enter the fray of posting given some of the vitriol I hear is still permeating the threads.

I understand why people might be angry at losing money however...I know some who have lost everything and I know my portfolio is but a fraction of what it was just a year or so ago. I suspect I, like many others, are wondering how we might ever get it all back?

I refuse to understand why however, some people feel the need to blame others for their own decision making...I know my losses were all my own doing, even if on the back of what appears to have been some unscrupulous activity in certain stocks, either from inside or indeed outside influences.

Fact is however, from the moment I bought each and every stock, there was nothing stopping me from selling...or buying...at any given time, other than myself!

Suffice to say I have learnt a valuable lesson, like am sure many of others have...lessons I will carry with me into the next period of booming market conditions.

The global financial market makers have served up to each and every one of us, a giant sh!t sandwich...we can either eat it, or choose not to...it really is our choice though!

I have chosen not to, for now, which is why I am otherwise pre-occupied...and somewhat distant from the threads...in more ways than one given the rather isolated nature I where I am now based. I have not even traded a single trade in over 8 weeks...maybe more? I have to go back some 11 years to find a similar period of non-trading.

I have chosen to be a by-stander, not because it is impossible to make money in the current market...but because doing so is not longer weighted in our favor. When playing by the house rules, we need to remember the house usually wins!

But, but if people willingly choose to take on the house...and take a bite of the sandwich being served up...they really should not be complaining about the smell, or the taste.

In the current market, we are so far behind the eight-ball before we even buy a stock that at times, to do so simply makes no sense...and if we wait a week, or two, we will often get our stocks cheaper anyway. There are always exceptions to the rule of course, but I can count those on one hand.

When we see stocks like OZL and RIO in trouble...well, suffice to say, nothing is safe.

On the whole I see the current climate as a good time to be fishing with a dry-line...wait for the fish to break the surface...then cast!

There will be a time to re-enter the markets...a time for trading and a time for investing...but for now, in my view, it is a time to sit on one's hands and ensure we live to fight another day.

That day will come...but not yet...not yet!

I believe the US are at or near the bottom, although this does not automatically suggest a rally will ensue...they are more likely to run sideways for a period in my view and perhaps a relatively long one?

Our markets will likely lag behind a few months, in which case I would expect a bottom for us near Feb/March next year...maybe a little later...again, I am not expecting a major turn even when it does come.

Not for all stocks anyway.

Sadly, many of us have been wiped out...or very nearly so...and simply will not have the funds to re-enter the market at the level, or with the capacities we once might have...the result of which will mean a less vertical recovery across the boards, but also the likelihood of much less volume to move the stocks when they do finally get a wriggle on.

The same can be said for many of the hedge funds and larger institutions...none of us have the money we once did!

What this means is no excess...no stocks running for no reason...certainly nothing inflated aboce fair value. Those that are attractive however, will likely see a concentration of buying...and in this regard we will see a few particularly attractive stories unfold.

In short, this will mean some stocks...the right stocks...will probably rise relatively quickly when the time is right. We just need to pick the right stocks.

My thinking is commodity centric, as I believe the financials by their very nature, will be a slow, cumbersome and somewhat giant beast to fully get back up on their feet!

The global "staples" of the commodity cycle however, such as Energy (thermal coal, metallurgical coal, oil), iron and of course copper, will all recover (or start to recover), long before the financial system can once again effectively skim their profits off the top of the wider economy.

Copper in particular is my favorite play, with current prices partially driven by a temporary and falsely weighted non-user pricing regime...and partially driven by the "real" market...it will in my mind likely be the stand-out performer over the next 5 years.

Current prices have been decimated by the hedge funds and other non-producers who until recently, were happily frequenting such commodity markets with a "trading" outlook. With the proverbial hitting the fan however, these "players" have simply been forced to offload what they were holding at any old price, for one very simple fact..."delivery" is of no use to them.

So...in the interim we have seen a flood of paper hitting the market, both spot and future, which has been driving the price below that which most can profitably produce at...this by its very nature is setting the scene for a massive corrective rebound at some point.

There is also another inherent but somewhat hidden "problem" with the current forward supply/demand equation in Cu...and this relates to the paper versus physical ledger.

To cut a long story short, as I see it we have more Cu paper in circulation than will eventually exist...and I am talking futures contracts here. We have a similar "problem" with gold, but that is another issue perhaps best for another post. Anyway, the recent drop in Cu prices will result in many closures, bankruptcies, operational delays and/or mothballing of projects otherwise earmarked for near-term production...and of course, future Cu delivery.

We are seeing the first stages of this already with many marginal operators going to the wall...and the delaying of projects like the Olympic Dam expansion.

Xstrata were going underground...can they at Cu $1.60/lb?

This is a common story across the globe...worse in fact in countries where the exchage rates have not been as favorably adjusted against the US as as the AUD$

In simple terms, we have Cu paper changing hands, some of which will never be honored for delivery...certainly not from those parties who are already out of business...will soon be out of business...or are simply unable to meet delivery in the all new economic climate.

For some of these people, it will be cheaper to walk away from the table rathrt than attempt to meet delivery...sadly.

Add to the mix a very smart Chinese buying block who no doubt are currently locking in as many long-range forward contracts as they can (whilst doing everything they can to keep a cap on the price)...and we clearly have a false economy of sorts.

This will not last...which gives us a short-term opportunity to set ourselves up in the right stocks...at the right price.

These are unique times, certainly different to anything I have ever experienced, as such my view is to err on the side of caution and wait for the right moment to enter...rather than bust my brains trading every day to maybe, if I am lucky, break even in 12 months?

Anyway...this will have to be it for a while...lunch is over.

Good luck to everyone...I will try to post a bit over the xmas break when I should have a little more time...but in case I do not...

Merry Xmas and happy and safe New-Year to everyone.

Cheers!