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Mix-Ansicht- von Thestreet.com bullish auf CDN-Dollar und Mining stocks - nasdaq, 07.05.2002, 19:54
von Thestreet.com bullish auf CDN-Dollar und Mining stocks
Mining Profits
The Canadian economy is far more dependent on the extractive industries such as oil & gas production, mining and timber production than is the American economy, and it is hardly any secret that resource plays have been doing well of late. Given the experience of the 1970s, these sectors may be able to perform relatively well for several years before they attract a gush of new investment and inevitably fall prey to overproduction.
The top performing issue in the TSE 300 has not been a gold miner, however, but rather Co-Steel (CEI:NYSE - news - commentary - research - analysis), a mini-mill steel producer able to benefit from those ill-advised tariffs slapped on by the Bush administration two months ago. Co-Steel has gained 189% so far this year.
After that, we have a long list of gold miners: Kinross Gold (KGC:NYSE - news - commentary - research - analysis), TVX Gold (TVX:NYSE - news - commentary - research - analysis), Ingles Markets (IAMGOLDD:AMEX - news - commentary - research - analysis), Iamgoldd, Lionore, Echo Bay Mines (ECO:NYSE - news - commentary - research - analysis) and Glamis Gold (GLG:NYSE - news - commentary - research - analysis).
Some of the Canadian energy firms haven't done too poorly, either. Hurricane Hydrocarbons (HHLF:Nasdaq - news - commentary - research - analysis) has already logged a 101% return so far in 2002, and Niko Resource, CHC Helicopter (FLYA:Nasdaq - news - commentary - research - analysis), Baytex Energy, Meota Resources, Ultra Petroleum and Storm Energy have returned more than 40%.
These are nominal returns in CAD. Should the CAD continue to appreciate against the USD, your returns will go up apace. Several words of caution are in order, of course.
First, the last Canadian mining boom attracted many unscrupulous operators to the Vancouver Stock Exchange; even the Toronto Stock Exchange suffered a black eye in 1997 with the demise of Bre-X under a cloud of geological and accounting scandals.
Second, the recent miscues of the Bush administration notwithstanding, the economic policies of the Ottawa government often take McGovernite goofiness to its illogical extremes. Third, resources stocks are like airlines: They're best traded, not owned. Selling too soon is the one strategy proven over time.
But enjoy the Canadian Renaissance while you can. Just don't imagine the Mona Lisa knocking back a Moosehead lager.
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