Tuesday, October 30, 2012

Why I am bullish on Silver-------By Shan Saeed
Strategic insight from the market: Bullish on silver

Silver is called a poor man’s gold. Its so true and correct in the present circumstances when there are lot of headwinds in the global financial market. Silver is your wealth insurance and protection.  Silver prices set to rise in 2013 thanks to China. Consumption in China, the world's second largest user, could climb to record 7,700 metric tonnes next year.

Investors in China are seeking out silver as an alternative value investment with the economy cooling for a seventh quarter. According to the research firm from Beijing Antaike notes that demand for silver is set to jump as much as 20% in 2013, with investors seeking to preserve their wealth and get insurance.
Consumption may climb to 7,700 metric tonnes after gaining 6-8% in 2012.  Even for China, this would be a record level. China is the world's second biggest user of the metal.
Silver soared 15% and holdings by exchange traded funds jumped 6.5% in 2012. According to my research, the demand for silver is coming from jewellery and coins, which accounts for 33% of demand, and electrical appliances and solar panels.
A possible solar industry recovery is also expected to help the white metal's demand, with the government targeting 21 gigawatts of solar power installations by 2015. This compares to an installation of 2.6 gigawatts in 2011.
Moreover, statistics have also shown that overall jewellery sales in China rose 19.3% for the first eight months of 2012 as compared to last year. China's week-long National Day Holiday dubbed 'Golden Week' for domestic consumption lasted longer than usual this year, aiding sales.
Buyers mainly targeted gold and silver jewellery and clothes. Chinese consumers also became top luxury buyers resulting in 25% of global purchases. Shoppers from the Asian continent are also pushing global sales of luxury items to new heights, aiding the sector post its third straight year of strong growth since the global recession.
While Europeans contributed 24%, Americans 20% and Japanese 14% to global luxury sales, China's retail and catering industries saw a surge in sales during the eight-day national holiday, driven by demand for jewellery, clothes and home appliances. Combined sales of major retail enterprises in the country rose 15% to $126.3 billion during the September 30-October 7 holiday period as compared to the previous year's holiday period. Even as the Shanghai Composite Index heads for a third straight annual drop, silver has climbed to touch 592 million ounces as of mid-October-2012.

Bailouts will continue: Moral Hazard, High Economic Cost and Burning of Tax Payers money
For those whose bread is buttered by the status quo, falling money supply raises the never-ending cry for more stimulus. Again from the Telegraph:
"This credit contraction is what happened in Japan in the early 1990 and we have to be careful not get into deflationary spiral," said Prof. Richard Werner from Southampton University, a Japan expert. "They to need to launch true QE or an expansion in broad credit creation, and it cant be done easily."
The Bank of Japan threw money into the big black hole of stimulus for decades. The country now has pretty bridges that no one uses, and a debt-to-GDP ratio of over 239% — the highest in the known world. Japan is a country where the young can't find jobs, won't marry, and live with their parents well into their thirties. Real estate has yet to find a bottom and exports are shrinking. The Nikkei 225 is at 8,900 — well off its all-time highs of 39,000. Japan is a case study in what not to do.
Since that high-volume, blow-off top in the spring of 2011, silver has slowly but surely lost value. Few investors stayed out of silver until late August 2012 when it met its five-year up-trend line and broke out of its shorter-term down-trend range.
I expect the price of silver will bounce along that uptrend in a similar way to the action I saw from 2008 through 2010. Strategic investor’s goal should be to buy when it hits that line.  Legendary asset manager Eric Sprott said this will be the "decade of silver" during which silver will hit $100. Silver is the next best investment after agriculture.
On June 18, 2012, the Federal Reserve (and the Office of the Comptroller of the Currency) quietly issued firm warnings to all banks to prepare to implement the new rules that make gold a legal currency — the same as cash.
I will tell you all about this "Bank of Bankers," a powerful cabal that presumes to dictate even to the U.S. Fed, and how their actions will lead to the most profitable gold opportunity of lifetime. There is no reason for Europeans to expand a business or buy a house when the European economy continues to fall apart and the political situation is in chaos. To own or build is to become a target in the next riot. You can't spend your way out of a debt crisis. The world has to eat the pain at some point. Sooner will be less painful than later. But, the powers that be won't listen to reason. There will be more stimulus, bailouts, and money printing. It will continue until it can no longer stay afloat. Buy silver on the dips.

Disclaimer: This is just a research piece and not an investment advice. All financial transactions carry a RISK

Monday, October 29, 2012

Upside of the energy market: Oil secret at north dakota's bakken pool belt By Shan Saeed

I think most investors and people in general have probably heard plenty about North Dakota's Bakken oil pool. After all, investors are aware of this huge development taking place. My job as a financial market economist and wealth protection strategist is to share new investment opportunities that nobody is talking about. So my passion for people in my networking, I call them savvy and strategic gurus to remain ahead of the curve as investors, they need to recognize the incredible potential of this unique shale oil formation... and details on top Bakken oil producers since 2007. Let me share few facts flowing out of the Bakken suggest there is much more light, sweet crude there than previously believed...
I'll to get right to the point. Here are a couple quotes from two of the biggest oil companies in the Bakken, Continental (NYSE: CLR) and EOG Resources (NYSE:EOG).

From Continental's CEO Harold Hamm:
"The latest game changer is the Three Forks lower benches. We've literally found an additional oil saturated reservoir in the Bakken that again, makes this world-class oil play bigger and better."
From Continental's President Jeff Hume:
"I believe we just have a larger petroleum storage system than we previously thought, and the reserves will increase as we get that data in hand, and that will be later this year."
From Continental's Senior VP Jack Stark:
"Continental acquired 6 cores of the entire Three Forks formation in 2011 and discovered there were up to 3 additional layers within the Three Forks formation. The significance of this discovery, and what makes it such a game changer, is that the volume of oil in play for the field almost doubles with these added reservoirs."
And from EOG CEO Mark Pappas:
"... we have more potential upside and growth opportunities than we've previously indicated... we're much more excited than we were a year ago about our remaining Bakken and Three Forks potential."
These insiders are estimating Bakken recoverable oil reserves may be 60% higher than currently thought... And it all has to do with layers. Shale is a sedimentary rock, meaning it is layered. Further exploration keeps turning up deeper layers of oil-producing shale.
At first it was just the Bakken, the upper level. Then they found the Three Forks Formation beneath the Bakken. Together, the Bakken and the Three Forks have around 3.5 billion barrels of recoverable oil.
More recent drilling revealed the Sanish formation under the Three Forks, which has another 1.5 billion barrels of oil. But now companies are finding more oil below the Sanish level — and they're pretty excited about it. Continental is in the process of selling off other assets and plans to focus all of its future spending on its Bakken holdings. That's right, Continental — the same company that drilled the very first Bakken well in 1995 — is going "all in" on the Bakken.
Knock, Knock: This is Opportunity
The vast majority of investors have never heard of the Bakken. Even those who know about the Bakken don't know that there could be 60% more oil there. This is what you might consider "breaking news." The U.S. Geological Survey is currently reassessing the Bakken's recoverable reserves.
Results are due in 2013, but I guarantee the "whispers" will begin circulating sooner than that. In fact, they may have already started. Oil prices have dropped sharply over the last few weeks as investors are terrified of what the lunatics in Greece will do next... And they've pushed my favorite Bakken stocks down to the point where they trade with P/Es of 7, even 5! If reserve estimates jump 60%, these P/Es would effectively be 3 and 4. But don't worry — those ultra-low P/Es won't last...Happy investment in the energy market
Disclaimer: this is just a research piece and not an investment advice. All financial transactions carry a RISK. 

Friday, October 12, 2012

NATURAL GAS WILL BE KING IN 2013------> By Shan Saeed

I wrote an article for a malaysian magazine in Sept 2012, SMART INVESTOR in which I mentioned about the growing important of Natural Gas. In July NG was trading at $2.5 bttu. Today, the price stand at $3.6 bttu--[ New York Times Oct 12, 2012]. An increase of 44% in just 75 days. Pure increase in wealth preservation in these turbulent times. Natural gas will remain king in 2013. In my humble opinion, Natural Gas prices will touch $4.95 bttu by next year. And while it will continue to be dirt cheap, prices will start inching back up next year. Also worth noting is that going forward, I foresee and definitely we would see more trucks and buses running on natural gas. There will be major approval on exports. The economics on exports are just too juicy to ignore. Those who are properly positioned now in natural gas are going to see some nice, steady growth in 2013.

In USA, Domestic oil production will also remain strong, offering dozens of opportunities for investors. I'm particularly fond of some of the latest enhanced oil recovery technologies, like this one that's now being utilized by BP, Exxon Mobil, Chevron, and Halliburton. North Dakota will continue to pump out oil fortunes as well, and Arctic drilling will aggressively resume next year when the season starts up again.

Although I suspect to see more delays and more proof that the economics of many of these Arctic drilling operations simply don't make sense right now... And I don't even want to think about an oil spill up there, where it will be impossible to properly clean it up or control a gushing well-head. But you know how that goes... The bureaucrats and oil companies will worry about that when it happens. Fabulous.

Regardless, the Arctic drilling experiment in USA will continue in 2013. But I'm sharing with my clients and potential investors how to take position in the energy market on enhanced oil recovery and domestic operations in North Dakota for the big pay-day.
These are just a few of my predictions that I shall use to make my strategy in 2013 for the energy market. Of course, nothing is set in stone...
Major geopolitical events, social unrest, economic recovery revisions, Europes doomday, acts of God, Arab Spring. Israel/Iran tension. Potential war. Supply disruption. Pick your poison. All of these issues go with us into 2013, and the risk premium — which I calculate to be around $20 per barrel will remain. All of these things can make us change course at any given time. I will stay nimble.

Get ready for the oil disruption going forward. Saudi Arabia is quitting oil business in the next 10 years and changing their energy mix. It's a super tight oil market, and it will only get tighter. And the market knows this. It's pricing in the potential for all of these scenarios. And I believe at least of one will hit home next year...The geo-political and strategic position makes oil premium very high and oil supplies will remain under pressure. Oil is headed for $150 a barrel in 2013. Happy Investment in the energy market.

Disclaimer:: This is just a research piece and not an investment advice. All financial transactions carry a RISK.