tty fat prophets say buy buy , page-7

Rockyboy, don't doubt my word, in future THANK YOU. I tell you the facts when I post on HC. I do not subscribe to Fat Prophets, I don't want to, and I don't need to, however they are trying to entice me to be a subscriber.
TODAY 5th March 2008 they sent me the following email
QUOTE """
"Fat Prophets"
Just as we said they would, banks and retailers continue to be hammered by the stock market, with more pain to come courtesy of the latest interest rate hike.

The good news for mining stocks just keeps coming, with yet more record highs for gold, oil and platinum.

As gold approaches US$1000 an ounce, we remind readers of one of our very favourite gold miners, up 250%* from its August 2007 lows, but with potentially much further to run.


Dear Wounded Stock Market Investor,

The stock market keeps getting pounded. Every time the market rises, it subsequently gets knocked back down again.

We've written here several times before about how psychologists tell us that the pain of loss is three times the joy of gain.

This market is painful, painful, painful.

We've also written here several times about how human psychology plays an important part in stock market investing.

For example…


Do you find yourself euphoric when share prices rise yet despondent when the fall?

Do you find yourself wanting to buy shares when the overall market is rising, and sell them when the overall market is falling?

Have you managed to buy shares at their peak, and sell shares at their low point?

Have the 2008 falls put you off stock market investing for the time being, or maybe even for years?
In the short-term, and by short-term, we mean daily, weekly and even annual movements, the direction of individual stocks is driven by greed and fear.

The really successful stock market investors are able to control their emotions. In Warren Buffett's words, they are fearful when others are greedy and greedy when others are fearful.

Rabbits, Foxes And The Stock Market

They cheer a falling market, realising it gives them the opportunity to buy shares at cheaper prices. Instead of acting like rabbits frozen in the headlights of a falling market, they act like foxes locked in a hen house, spoilt for choice.

Are you a rabbit or a fox?

If you are a rabbit, read on. We think we may have some better stock market food for you than banks and retailers.

If you are a fox, good for you, but we also suggest you read on. As you will know, the key to stock market investing success is to buy the right shares at the right price. We think we've got some good tucker for you, including…


The gold miner with the goal to produce 1 million ounces of gold per annum and have reserves of 10 million ounces by the end of 2010.

Why we hope you've avoided the banking sector, and why we think you should continue to avoid it.

How the gold price once again hit a record high this week, and how we think gold's biggest moves may be still in the year's ahead.
No Sympathy Here For Company Directors And Their Huge Margin Calls

But first, in the wake of the ABC Learning Centres melt-down, and the margin calls that forced several directors including CEO Eddy Groves to sell shares, we couldn't help but pile in and give our $45 million worth.

Here at Fat Prophets, we're struggling to understand why company directors use margin to buy even more shares in the companies they run.

Here are a few guesses…


They want to impress their friends, family and the other parents at their kid's exclusive private school.

They want to show potential investors how confident they are about the future prospects of the company they run by buying millions of dollars of shares with their "own" money, hoping it will ultimately result in a higher share price than it otherwise would have been.

They crave a controlling interest in the company they work for. On that same point, once a company is listed on the stock market, founder/owners no longer own the company. They work for the company. Some directors seem to conveniently forget that important distinction.

They are greedy.
No Ferraris Here

Directors generally receive huge salaries. They generally already own a substantial number of shares in the companies they work for, often worth millions of dollars. They generally have generously priced stock options in the companies they work for, often potentially worth even more millions of dollars.

It seems to us as if most company directors should already be sufficiently incentivised and motivated by their existing salary and share holdings without having to resort to borrowing large amounts of money to buy yet more shares in the companies they work for.

When the margin calls are a coming, we find it a little difficult to have much if any sympathy for directors who are forced to sell at bargain-basement prices.

End of story.

Takeover Fever Is Here, Coming Soon To A Resources Company Near You

The BHP Billiton takeover bid for Rio Tinto is old hat now. Without getting into too much detail, BHP's bid largely revolves around 3 things…


The resources boom lasting for decades to come, including it being cheaper for BHP to acquire existing mines than it would be for them to find new resources.

Giving the combined BHP/Rio increased pricing power, especially in the red-hot iron ore market.

Cost-cutting.
BHP expects all three will ultimately result in increased shareholder returns. We'll find out in the years ahead.

Zinifex Becomes "Oxifex" - Are These 2 Takeover Plays Set To Soar?

This week Oxiana agreed to buy Zinifex for around $6 billion.

The combined "Oxifex" would create a company which would rank as the world's second-largest zinc miner and which would have sizeable production of copper, lead, gold and silver. "Oxifex" would also be Australia's 3rd largest diversified mining company after BHP and Rio, meaning it could soon be the 2nd largest diversified miner should BHP eventually takeover Rio.

Why would Oxiana buy Zinifex? See reasons 1, 2 and 3 above.

It's a recurring theme. But it's not surprising. With commodity prices regularly hitting record highs, continued insatiable demand from China and increased mining and production costs, and the opportunity to rationalise cost bases, companies are finding it cheaper to buy than to find.

What is surprising however is how few takeovers we've currently seen in the mid-range mining and resources sectors. But we think that is all about to change, with several of the Fat Prophets portfolio companies looking likely targets…

Takeover Play #1 - South African Platinum

The platinum price continues to hit all time highs, up an amazing 47%* this year alone. Yet the shares of the South African platinum explorer we think is a potential takeover target still trade around the same level they were at the end of December.

In our most recent review of the company, we concluded saying it "…continues to represent a rare, high quality investment opportunity for Members. It boasts two extremely attractive emerging South African platinum projects at a time of record prices. This is sure to sustain investor interest…which could result in a takeover or merger at some stage in the future."

Takeover Play #2 - Northern Territory Iron Ore

We recently met with this company's Chairman and Chief Executive, giving us the opportunity to get even closer to one of our favourite mining companies.

Today the company is an iron ore producer in the Northern Territory, with production continuing to exceed budgeted levels.

Tomorrow, the board is actively looking to diversify the company's production and earnings base away from purely iron ore to become a fully diversified carbon steel and other commodity company. They already have made investments in other smaller companies.

Although the directors naturally weren't giving anything away, it seems the company will soon be looking to acquire smaller, undervalued emerging producers. Giving us a great deal of confidence in this strategy is the Chairman's experience with a similar business model whilst at the helm of another mid-range diversified miner.

In our most recent BUY report to Fat Prophets Members, we said …

"…(the company) has current production that allows it to take full advantage of the window of opportunity in iron ore that presents itself right now, and secondly, it is looking to build other income streams to reduce its exposure to iron ore alone. This is visionary stuff and what company building is all about."

We concluded by saying the company "…continues to represent what we consider to be an outstanding resource play…we recommend the stock as a Buy around $1.19*."

The good news for potential buyers of this very promising company is that today the shares trade back around the $1.02* level, down 14%* on our most recent buy price and down a whopping 41%* from its all time high reached as recently as November 2007.

Are you a fox or rabbit?


HURRY: Sign me up to become a Fat Prophets Member so that I can find out the names of these two takeover plays.

By signing up to become a Fat Prophets Member today, and for a strictly limited amount of time, I understand I'll receive an instant discount of $395 off the normal price.




The Problem With Banks And Retailers

There is a real Aussie fascination with banking and retail stocks. But in recent times, it has turnout to be an expensive fascination.

As reported on Bloomberg this week, a note by ABN Amro said headwinds in the banking sector have turned "gale force" for the industry. The note also said "We expect a cyclical increase in bad debt in financial 2009-10 given further interest rate increases and the Reserve Bank of Australia's intent to slow the economy."

On Monday this week, Commonwealth Bank shares fell to their lowest price since November 2005 and National Australia Bank sunk to their lowest since October 2004.

Why the fascination with banks and retailers? We guess it's because…


The companies are well known to all of us, as we regularly see their names at shopping centres. Compare the brand recognition of Westpac and Harvey Norman to one of our biggest ever share price winners, oil explorer Carnarvon Petroleum.

Over the past 15 odd years, shareholders of banks especially, and some retailers, have enjoyed spectacular long-term investment returns. If you bought $10,000 worth of Commonwealth Bank shares at their float back in 1991, even after the shares have fallen around 33% from their recent peak, your $10,000 would now be worth almost $75,000* and that's not including dividends.

Banking sector investors have done well in the past by buying shares on the dips. It has been a good strategy - in the past. Things are different now.
Interest Rates, Houses Unaffordable…A Bad Recipe For Banks

Today we have…


Interest rates at a 12 year high, potentially set to go even higher.

Inflation continues to run above the benchmark set by the Reserve Bank of Australia.

Courtesy of the credit squeeze, bank profit margins are falling.

As interest rates rise and some high profile highly indebted businesses struggle to survive, bad debts also rise, putting yet more pressure on banking profits.

Finally, with Australian house prices the most unaffordable in the world, the spectre of falling house prices looms large on the horizon of banking profits.
As regular readers will know, we have long advised caution on banks. The Fat Prophets portfolio contains no pure banking stocks.

Just as well too, as the financials excluding property chart below shows the extent of the carnage. We think the squiggly black line is set to squiggle lower still in the weeks and months ahead.



The Good News From The Bank's Share Price Woes

Repeat after us…

What's bad for financials is good for gold.

What's bad for financials is good for gold.

What's bad for financials is good for gold.

Got it?

This week, yet again, gold reached an all-time high, hitting over US$985. The gold price is now up more than 17% in 2008 alone.

We've been saying it for a long time now, and now many others are finally cottoning on too…the gold price is headed for US$1000 an ounce.

With the gold price moving so quickly, by the time you read this it may already have breached the psychologically important US$1000 an ounce mark. Even if it hasn't, we think it's surely only a matter of time before it does.

We Are Targeting A Gold Price Of US$1100 In 2008

As we've been saying for a long time now, the long-term fundamentals for gold are still very strong.

Gold is a currency, not a commodity.

Because of gold's unique qualities, for thousands of years it has been used as a store of wealth and a medium of exchange. Because of its inability to be freely created (unlike government controlled money) gold has always been the anchor of financial systems, providing stability and trust.

With stability and trust in the world's monetary system evaporating rapidly, and US interest rates set to fall further as the world's biggest economy edges inexorably closer to recession, gold is set to continue to be a major beneficiary.

In fact, we think gold's biggest moves may still be in the years ahead.

When adjusted for inflation, gold remains well below its all-time high. An ounce of gold at US$875 in 1980 would be worth around US$2,200 today, or US$5,000 an ounce if more traditional measures of inflation were used.

The Bull Market Has A Long Way To Go - So Vote For Gold

As we said in an article we recently were asked to write for the Sydney Morning Herald and The Age…

"…the bull market in gold has a long way to go. The only event that would change our mind would be if US officialdom conceded that ultra low interest rates were not a panacea for all the world's economic ills. But in reality, this is unlikely to happen. As George Bernard Shaw said:

'You have to choose between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold'."

Given that background, it's not hard to see why our target price for gold for 2008 to US$1100 an ounce.



The Emerging Gold Producer With Huge Potential

Regular readers of this email may recall us previously highlighting a West Australian emerging gold producer with significant exploration potential as a company whose prospects we thought were very promising.

As a reminder…


By the December quarter of 2008, the company anticipates producing gold at an annual rate of 450,000 ounces. At current gold prices, that translates into annual revenue of around $470 million.

Their gold resources are already a staggering 8.4 million ounces.

Further exploration potential comes via a study identifying geological targets in Australia with the potential to host 1 million ounce or larger gold deposits. A tenement application for almost 1000 square kilometres covering a number of their identified targets has been lodged in South Australia.
This Small Gold Miner Is Aiming For 10 Million Ounces

Then at the end of October last year, the company announced details of a $100 million capital raising to fund completion of their current mining projects, the continuing expansion at another mine, acceleration of exploration, and working capital.

We first highlighted this company to readers of this email back in August last year when the share price was considerably below the 60 cents* level at which we had first recommended our Members buy the shares.

People who signed up to become a Fat Prophets Member, found out the name of this emerging West Australian gold producer, and bought the shares at around the 60 cents* level they traded at in late August and early September 2007 would already be sitting on 48%* profit.

Whilst that is impressive, the share price hit as low as 37 cents* during the August 2007 sub-prime sell-off and since then, has increased by around 140%* in less than 6 months!

The company's corporate goal is…


"To produce 1 million ounces of gold per annum and have reserves of 10 million ounces by the end of 2010"
With the gold price hovering around the US$985 or A$1045 an ounce mark, and the company valued today at around A$950 million, it doesn't take a rocket scientist (although it does take a calculator with a lot of digits) to work out the potential upside for this company.

As Gold Heads Towards US$1000, This Emerging Gold Producer Represents An Attractive Investment Opportunity

This Western Australian gold mining company is one of our very favourite companies, even after it has run from a low of 37 cents* to the around 94 cents* level at which it trades today.

In a special email alert update we sent to our Fat Prophets Members just before Christmas, we highlighted the company as a BUY, saying…

"…investors are still not convinced of gold's merits and in times of market volatility, gold stocks are still getting hammered. Although unsettling, we are not overly concerned by this. Given the pullback we have seen in the gold sector, for those looking to add or build exposure, we recommend...(the company) at around 67 cents*."

With the shares now trading at around 94 cents*, that buy advice is currently looking quite timely, the stock being up around 40%* in just a few short weeks.

We continue to believe this company represents an attractive investment opportunity, especially considering the continued strength in the gold price, and our long-term prediction of US$1100 an ounce.


URGENT: To find out the name of this company, get our most up-to-date thoughts on its future prospects, AND to receive instant access to ALL the current BUY recommendations in the Fat Prophets Australasian AND Fat Prophets Mining & Resource Reports, we urge you to sign up to become a Fat Prophets Member today.

For a strictly limited amount of time, we are offering new Members an instant discount of almost $400, complete with our money back guarantee.


Start Now



Our Enviable Track Record

For calendar year 2007, the Fat Prophets Mining & Resources hypothetical portfolio gained a stunning 42.5%!*

Lest you think our 12 months performance was a fluke, fuelled by a few lucky correct calls, take a look at how the same hypothetical portfolio has done over the past 6 years…

2006 +45.7%*
2005 +34.6%*
2004 +12.1%*
2003 +50.6%*
2002 +30.9%*
2001 +27.8%*


(Performance correct to 31st December 2007*)

Our annualised return since inception in October 2000 to the end of December 2007 is 34.1%*.

To put that into perspective, $20,000 growing at 34.1% per annum would be worth over $85,000* in 5 years, close to $375,000* in 10 years, and hit the $1 million* mark in year 14.

The Fat Prophets Australasian Report hypothetical portfolio has been no slouch either. Its annualised return since inception in October 2000 to the end of December 2007 is 29.2%*.

We think our past performances* speak for themselves.

How To Become An Exclusive Fat Prophets Member

By now, you're probably curious as to how much it would cost to become a Fat Prophets Member and how to get exclusive access to the names of our two takeover plays plus the gold company with the goal of producing 1 million ounces per annum mentioned above, as well as all our other current buy recommendations.

But first, let's quickly summarise what you get as one of our valued Members…


As a Member, you'll automatically receive our weekly email alerts. Every week, after the markets close, we rush to you our latest share recommendations. This way, when the market opens the next morning, all members are able to buy the shares at a similar great price.

Each weekly alert usually contains between 2 and 4 buy recommendations. They are also packed with our very latest views on themes like the state of the markets, commodity prices, the gold price, or the economy in general.

Members also get instant access to all of our archived recommendations, including the names of all our top oil stocks, and the company we highlighted last week as drilling in an area with potential oil resource in place estimated to lie somewhere between 6 million and 40 million barrels.

Instant access to the names of ALL current Fat Prophets Report BUY recommendations across both our Fat Prophets Australasian and Mining & Resources Reports.

Every so often we come across a buy recommendation so exciting and so compelling that we just can't wait until the regular email update to tell you. So, to enable you to buy at the lowest possible price and before these companies are discovered by the stock market community at large, e rush a special buy alert email directly to your inbox.

We're so confident you'll like and profit from our service that if for any reason you'd like to cancel your subscription in the first 30 days, we'll refund your payment in full with no questions asked.
How You Can Instantly Access ALL Our Current Buy Recommendations And Save Almost $400

Each Fat Prophets Report usually costs $695.

Given the close to 30%* annualised returns* from the hypothetical portfolios* of BOTH the Australasian and Mining & Resources Reports from October 2000 to December 2007, we think that's a very reasonable price.

If you subscribed individually to each report, your annual cost would be $1,390.

But for a strictly limited period of time, we are offering an annual subscription to BOTH of our reports for the amazingly low price of $995. That's a saving of almost $400!

Let's spell that out again…

Fat Prophets Australasian Report - Usually $695 per annum
Fat Prophets Mining & Resources Report - Usually $695 per annum

Subscribe to both market-beating reports for a year at just $995, and save $395!

But there is a catch.

This offer is strictly for a limited period of time, and must end 5pm Monday March 10th 2008.


Hurry - rush me without delay an annual subscription to both the Fat Prophets Australasian AND Fat Prophets Mining & Resource Reports. I understand I'll pay only $995, a saving of $395 on the usual price.



Start Now



Rest assured, this offer also comes with our money-back guarantee, as you would expect from Fat Prophets.

This offer is exclusive to readers of this email, and will end this coming Monday at 5pm. You must click on the link in this email to be taken to our special offer subscription page.

With many commodity prices regularly hitting all time highs, and the gold price on the cusp of breaching US$1000 an ounce, we urge you to act now in order to access our current recommended stocks and our very special subscription offer.

We wish you happy and profitable investing.

Fat Prophets…where wealth creation is our mission.

Yours sincerely,

Fat Prophets
Investment Heavyweights

P.S. Don't forget that this very special offer expires at 5pm sharp on Monday 10th March 2008! Click here to instantly subscribe to both our market-beating reports and SAVE $395. As you would expect from Fat Prophets, the company The Australian Financial Review called "…among the liveliest and most contrarian of market commentators", it comes with our watertight 30-day money-back guarantee. If for any reason at all you don't like our service, we'll happily refund your money in full.

P.P.S. As reported on Bloomberg this week, commodity exports from Australia are forecast to gain for a fifth straight year, driven by demand for steelmaking raw materials led by China. The Australian Bureau of Agricultural and Resource Economics said robust economic growth is expected in China this year along with strong demand for Australia's resources. Peter Arden, an analyst at Ord Minnett commented that "China is far and away the biggest underlying force" and that "The outlook is very, very rosy."

P.P.P.S. Just last week we recommended Fat Prophets Members BUY this large and growing gold miner, saying "2008 looks set to be a bumper year for the company". Little did we know at the time, but just 2 days later, the company announced a major upgrade to its flagship mine, lifting gold production capacity to around 1 million ounces per year from 2011, giving us even more confidence and comfort with the company's story.





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2 Park Street
Sydney NSW 2000
Ph: (02) 9252 7171
E-mail: [email protected]



*Performance is hypothetical and based on recommendations made in the Fat Prophets report. The table is updated quarterly. Transaction costs have not been taken into account. Past performance is not a reliable guide to future performance, and investors should be aware that returns can be negative. For a full explanation of the performance calculation methodology, please click here.