Most of last year was pretty rotten for energy stocks, as you can see from the following chart of the S&P/ASX 200 Energy Index:
But since November – like almost all stocks – energy has taken off. And according to the Wall Street Journal, investors can’t get enough of a new energy stock that’s set to hit the Aussie market:
‘Toronto-listed Strata-X Energy Ltd is rapidly progressing towards a dual listing, with its Australian initial public offering heavily oversubscribed according to joint lead manager Helmsec Global Capital Ltd.‘The company, which has oil and gas exploration projects in the United States and Australia, is seeking a minimum of 10 million Australian dollars (US$10.4 million) but will close its books Friday with A$4 million in over subscriptions.’
As the old saying goes, ‘It takes more than one swallow to make a summer’, so we won’t get too carried away that this is the start of a new bull-run for energy stocks. But with eight oil and gas stocks on the Australian Small-Cap Investigator buy list, we’re certainly backing the sector to come good soon.
What can we say about gold that we haven’t already said?
For the past year the price action has been painful…or rather, painfully boring. Today, gold priced in Aussie dollars is almost exactly where it was a year ago.
Between then it has been up and down, but without doing anything spectacular. We still like gold, and always will. But we can’t help feeling that punters will soon get bored holding it, which could lead to a short-term sell-off.
Long term, gold remains a buy. You only have to look at the state of most national economies and the comment from Lord Turner, former head of the UK’s Financial Services Authority (the UK equivalent of ASIC) to see the thought processes of those in charge of the financial system.
Here’s what the Financial Times reported:
‘Lord Turner, the departing chairman of the Financial Services Authority has defended financing government spending by printing money arguing that, within limits, it “absolutely, definitely [does] not” lead to inflation.’
At $1,624 an ounce, gold still looks like a great bargain.
According to the New Scientist:
‘Glance down at the interactive floor in Patrick Baudisch’s lab and you will not see your reflection in the glass. Instead, you will find your computer-generated doppelganger, wearing a facsimile of your clothes, which walks and moves just like you do. It seems to be stuck to your feet.’
We’ll reiterate. It isn’t a reflection. It’s a computer-generated image of the person standing above. If you can imagine looking into a mirror and instead of seeing your reflection, you saw a computer-generated version of you looking back.
We’ll admit, that feels a little creepy. But still, it’s pretty amazing technology. What’s the practical use of this technology? Again, according to the New Scientist:
‘For instance, to play a version of indoor soccer, the floor generates a CGI football that can be kicked about by the people in the room. Or if someone sits on the floor, the system recognises who they are by their precise weight and flips a TV on to their favourite channel. Similarly, an elderly person’s activity levels could be monitored.’
We’re sure the actual applications will be different to those imaged. And as with any new technology, a small part of us worries about what could happen if this stuff gets into the wrong hands, i.e. the government.
But still, who would have predicted flat screen TV’s 30 years ago? Yet today, they’re in almost every home. Who’s to say these CGI-enabled floors won’t be in every Aussie home by the year 2043?
It’s that time of year…for health insurance premiums to rise.
While biotechnology and health companies struggle to finance key projects (see the Walter & Eliza Hall Medical Institute’s fundraising for a new diabetes drug), opticians and dentists continue to rake in the cash thanks to compulsory health insurance.
It’s a bugbear of ours. We’re forced to pay for something we really don’t need, and at an inflated cost because the government makes it compulsory. The latest report from ABC News says:
‘The Federal Government has approved an average 5.6 per cent increase in the cost of health insurance premiums.’
It’s nice of the government to do that, seeing as the government doesn’t have to pay it…you do. Unlike other industries where you can just refuse to pay the higher costs, you can’t do that with private healthcare.
If you don’t like the price of beef or pork, you can stop buying it. If you don’t like the price of private healthcare, well, we guess you could give it up, but then the government will just slug you with a tax.
All the while, the opticians and dental firms wallow in cash. We have personal experience of this. Each year we trot off to the opticians to get two new pairs of glasses. Why? Is it because our eyesight is deteriorating so badly that we need them? No, it’s because our health fund covers two pairs of glasses each year for no cost.
We’d be mad not to at least get something back for what we pay in health insurance. So there you have it, another example of the State helping blood-sucking companies to forcibly take money from your pocket and put it in the pocket of corporate Australia.
And what will they do with it? Probably buy a $12,000 cocktail!
With Dr Alex Cowie out of the office this week, we haven’t had anyone to chew the fat with on the latest mining news. We know that Doc Cowie loves gold mining stocks – he tipped a bunch of them towards the end of last year.
And we could see why; despite the fairly resilient gold price, gold stocks took an absolute hammering. As you can see from the following chart of the Doc Cowie’s favourite gold stock ‘index’, the Market Vectors Gold Miners ETF [NYSE: GDX]:
But the Doc reckons the market is on the turn and gold stocks should beat the market this year. It makes sense to us, although we do note that the GDX is still 139% above the 2008 low, despite the current slump.
Cheers,
Kris
From the Archives…
Make Sure You’ve Updated Your ‘Stock Insurance’ Policy
1-02-2013 – Kris Sayce
Here’s Why We’re Still Buying This Stock Market
31-01-2013 – Kris Sayce
Revealed: Inside the Mind of a Share Trader
30-01-2013 – Murray Dawes
Buy Silver – the War Against the China Bears Begins
29-01-2013 – Dr. Alex Cowie
China’s Economy: Enter or Exit the Dragon?
26-01-2013 – Callum Newman
