Our strategy in this advisory is not to bet on macro disasters. Rather, it’s to take positions in stocks of strong producers to take advantage of two long-term trends: rising demand in the developing world and increasingly tight supplies. With investors focused on global recession and lower demand, few are noticing that securing supplies is increasingly expensive, unreliable and politically dangerous. And although the bottlenecks aren’t really affecting prices now, it’s pretty clear they will when the global economy stabilizes. Read More

The past few months have been painful for most market sectors, including energy. But there’s a silver lining: Income-oriented investors now have a once-in-a-decade opportunity to grab companies with little or no exposure to an economic slowdown or weak energy prices and lock in tax-advantaged yields of 8 to 15 percent. Read More

There will be many twists and turns for the Chinese economy as well as its society, but it’s gradually becoming clear that China’s model of development has worked well. And there’s no reason it won’t work in the future. The country’s adaptability to the changing world seems extraordinary--although it helps if you’re one of the main drivers of these changes. Read More

Resource-intensive Canadian indexes posted their worst month in 10 years in October, the Standard & Poor’s/TSX Composite Index shedding 17 percent, the biggest monthly decline since August 1998. Read More

Ever try carving a pumpkin with one hand? That was my task at my son’s preschool class yesterday, after crashing my bike to avoid an errant pedestrian last weekend. It’s also a pretty good metaphor for investing in this emotionally driven and still extremely volatile market. The good news is the positive trends in the credit markets I noted last week seem to be getting stronger. Thanks to the continued massive effort by the world’s governments and central banks, the London Interbank Offered Rate, or LIBOR, is now noticeably rolling back toward levels that bear some semblance of normality. Volume in the US commercial paper market, which had almost completely evaporated a couple weeks ago, is surging. And borrowing rates are coming down, at least for stronger corporations. Read More

Ever try carving a pumpkin with one hand? That was my task at my son’s preschool class yesterday, after crashing my bike to avoid an errant pedestrian last weekend. It’s also a pretty good metaphor for investing in this emotionally driven and still extremely volatile market. The good news is the positive trends in the credit markets I noted last week seem to be getting stronger. Thanks to the continued massive effort by the world’s governments and central banks, the London Interbank Offered Rate, or LIBOR, is now noticeably rolling back toward levels that bear some semblance of normality. Volume in the US commercial paper market, which had almost completely evaporated a couple weeks ago, is surging. And borrowing rates are coming down, at least for stronger corporations. Read More

Vital resource stocks have been pounded during the financial crisis. Some of the losses have come from the liquidation of positions investors piled into—including hedge funds—on the way up. Some have been due to the historic surge in the US dollar, which--in turn--has been due in part to the so-called flight to quality and unwinding of the “carry trade” by large institutions. And some of the losses have been due simply to worries that the liquidity crisis would trigger a steep global recession. Read More

Asia ex-Japan now trades at 6.9 times earnings, below valuation floors met during both the 1974 (7.1) and 1982 (7.4) recessions. The market’s severe selloff is as big as occurred during the 1998 Asian Crisis as well as the 1982 drop of 58 percent. Only the 1974 fall was bigger in magnitude, when Asia’s inflation was 25 percent. All this is happening at a time when Asia is in much better position than ever before to absorb the consequences of the collapse of the western banking system. But commentary on the demise of the emerging economies and expressions of doubt about their future ability to perform is as fashionable as ever. Read More