The Campbell Report

Food inflation is gaining strength:

2008-01-29T12:44:00.000-08:00

A combination of factors is driving the price of basic foods up and this trend is not a reaction to seasonal factors or changes in crop yields due to drought as has been the case in the past. In the past food prices tended to move up due to crop failures from droughts and other weather related factors. The current trend is partially a reaction to lower crop yields in Australia and Brazil, with a considerable influence from the ridiculous push to produce ethanol as an alternative to gasoline in the US. But these factors can only account for a portion of the increase in prices, the main force behind the increase in basic foods such as wheat, corn, soybeans, sugar, coffee etc. is the added demand for these commodities from an expanding middle class in Asia.

In Asia millions of middle class families are being created annually as the average income increases so does the ability to diversify their diet from the previous subsistence diet of rice, fish and poultry to start to include beef, pork and additional meals over poultry. All of this additional meat is creating a huge demand for feed grains such as corn and soybeans. One thing is certain once the diet is diversified it is highly unlikely that those consumers will go back to the old subsistence diet regardless of the additional cost, it has been proven that a diversified well rounded diet can increase the size, strength and mental ability of children it also adds to the longevity of a population so going back is not going to happen.

As Asia continues to create new middle class families by the millions the upward pressure on the price of food will continue, likely for decades. This new trend will create opportunities for companies supplying to this sector such as fertilizer companies, seed suppliers, transportation and equipment suppliers.

PetroChina now the world’s largest:

2007-11-05T11:49:00.000-08:00

If you needed confirmation that the Chinese stock market is over valued look no further. PetroChina tripled in value on its first day of trading in Shanghai. The company now has a market value of over $1 Trillion, the first company in history to do so making it the largest company in the world when ranked by market capitalization, larger than the market value of Exxon and GE combined.

The risk in the Chinese equity markets has gone through the roof and this latest example of extreme valuation is just another indication of the excesses in the market. As I have been saying for months, stay away for direct Chinese investments but continue to invest in companies that supply the materials required to build the industrial infrastructure and complete the modernization of the Country.

For more information go to www.campbellreport.com

Citibank cleans house:

2007-11-05T11:46:00.000-08:00

The largest bank in United States has just accepted the resignation from CEO, Charles (Chuck) Prince, after announcing that the firm will be taking a write down of approximately $11 billion (that’s billion) due to exposure to the subprime mortgage sector. Investors are getting out in a big way as indicated by the share price decline of $2.20 or 5.85% today.

The question for all investors is have the financial companies such as Citibank and Merrill Lynch come clean on their exposure to the subprime slime they helped create? I would suggest that is not likely and that we will be seeing additional substantial write downs going forward as well. When the new CEO is appointed at Citi and Merrill you can bet there will be another write down, that has just come to light, just like a new President or Prime Minister does when taking over power, blame the last guy with as much as you can get away with.

I would stay away from financial shares until the real final number is out and that won’t happen for months.

For more information go to www.campbellreport.com

Copper new uptrend?

2007-04-03T13:21:00.000-07:00

The price of copper has been on a tear over the past few weeks as inventory levels worldwide fall. China which consumes about 20% of global production remains on a very robust growth trend and continues to be the main force in the copper market. The global inventory levels have fallen for eight weeks in a row and there appears to be the potential for further declines as the building season in many parts of the world is just starting to pick up momentum.

Over the past few years there has not been a dramatic increase in copper production and the opening of new mines has been a slow process. The current producers have been unable to expand production sufficiently to meet the increase in demand. New mines are going to come on stream but the time frame to get approvals and complete the permitting process can extend out to ten years in some regions. Do not be surprised when the price of copper rallies back to last years high of just over $4.00 a pound from the current level of $3.32 per pound.

I continue to be bullish on copper and would continue to hold Northern Orion Resources (NNO-T, $4.85) which is held in the Aggressive Model Portfolio originally purchased in January 2007 @ $4.33 (12% return to date or 56% annualized) initial 18 month target $8.00 and Aur Resources (AUR-T, $25.00) which has been held in the Growth Model Portfolio since March 15 2005, original cost was $8.45. (total return to date 195% or 135% annualized) 18 month target price increased to $32.00.

For more information go to www.campbellreport.com

BCE being taken private?

2007-03-29T11:54:00.000-07:00

The rumor mill is going wild on the news that BCE may be taken private by Kohlberg, Kravis Roberts (KKR). The US private equity firm has been involved in many of the most spectacular deals over the past decade or so. The firm has access to the capital required to complete this $24 billion deal.

The main hurdle will be the foreign ownership limits in place on Canadian telecom and media companies. KKR would need to find a wiling Canadian partner or partners to complete the deal. The Ontario Teacher Pension Plan already has an ownership position in BCE and would be a likely partner along with other pension plans.

If this deal goes through it seems that this will potentially be one of the unintended consequences of the Governments decision to stop the creation of income trusts. If BCE had been allowed to convert to a trust structure I doubt that any of the unit holders would be willing to tender to an offer taking the company private and give up the high income distributions. The common shareholders will be much more receptive to an offer for this lackluster performer. BCE shares have basically gone sideways for nearly 5 years as management tries to refocus the company back to its core businesses.

If you currently own BCE shares be prepared to accept an offer from a group led by KKR and say good bye to another Canadian icon stock as global investors continue to see value in the Canadian market.

For more information go to www.campbellreport.com

Canadian Budget 2007:

2007-03-19T15:36:00.000-07:00

The Conservative Government has just tabled their newest budget; the budget has a lot of new spending initiatives mainly aimed at the provincial governments for infrastructure, education and health care.

The Federal Government has tried to meet the requests of many special interest groups which appears to be a strategy by the Conservatives to divide and conquer the opposition in the next election. If the opposition parties defeat the Government on this budget they will be penalized by Canadians who do not want to go to the polls again so soon.

The Conservatives have made some headway on the so called fiscal imbalance by offering a substantial increase in the transfer payment system which will potentially become more flexible and can be tailored to the individual provinces requirements.

The budget does have one interesting change that is the ability of a family to file jointly which will eliminate the marriage penalty. Now Canadian families will be treated equally regardless of whether they are a one income or two income families, reducing the penalty forced on a family where one spouse stays home to care for the children.

I am a bit surprised that the budget did not deal with any changes to the capital gains taxes as many had expected and the government had hinted at, also that the Government decided to reduce the investment incentive for the development of the oil sands projects.

The Government is going to apply $9.2 billion to debt reduction but has increased spending by a considerable amount. The Government did not change the current structure of the tax brackets which will hurt the average taxpayer over time.

Generally the budget meets a lot of the concerns expressed by Canadians recently, it does not dramatically change the average Canadians tax bill and it will not add any impetus for increased investment but that being said it does not hinder the economy either so that economic growth should continue to be robust going forward.

For more information go to www.campbellreport.com

Sub prime will be the dot com of 2007:

2007-03-14T16:07:00.000-07:00

The sub prime mortgage market is sending shock waves through out the equity and bond markets. Many investors will ask what is all the fuss about. The answer is that the sub prime segment of the mortgage market has ballooned over the past four years as lenders scrambled to expand market share.

Sub prime mortgages are those that are issued to borrowers with less than attractive credit histories or mortgages that have extremely lax terms such as zero down payments. The explosion in sub prime mortgages generally happened in areas with substantial increases in home prices. The assumption being that the lender could justify the mortgage due to an anticipated increase in real estate prices which would protect their position.

Over half of all the mortgages currently out standing were issued in the last three years, and a large percentage of those would be considered sub prime. As real estate prices continue to soften over the next few months the number of defaults in sub prime mortgages will increase dramatically.

Investors have to be very careful going forward as it is not going to be easy to see which lenders will be most affected by the increase in default rates. Many of the major financial institutions have been funding the expansion in mortgages and will have substantial indirect exposure to this segment of the market.

The fall out from this huge increase in lending risk will hit a number of sectors of the stock market. Avoid any and all sub prime mortgage lenders, small regional banks and trusts and be very vigilant in looking at the details of loan loss provisions for any of the major lenders as well. The home builders and building supply companies are going to be hit hard as the number of homes for sale jumps due to foreclosure action. The retail sector will be hit as many borrowers cut down on consumption in an effort to hold on to their homes.

This is only the beginning of the slide in the financial services sector and the process will take months to complete and there will be a lot of tears shed before this is finished.

For more information go to www.campbellreport.com

Look to the land of the rising sun:

2007-03-08T13:55:00.000-08:00

The economy in Japan over the past year or so has been showing consistent signs of improving. The previous cycle of deflation appears to have ended and prices of most goods and services have stopped going down. Consumer confidence is starting to improve and corporate profitability has turned the corner as well. The Japanese economy has benefited from increased trade with China as well.

The Japanese economy has been hampered by a decade long fight with deflation which started in real estate and quickly spread to the rest of the economy. The extreme valuations that occurred in real estate took years to correct and over that time frame the Japanese consumer drastically reduced consumption.

Real estate prices appear to have stabilized and that has helped to embolden the consumer, this increase in consumer activity has helped to push up corporate profitability which has helped to reduce the jobless rate in the country.

All of these factors are starting to have a positive impact on the over all Japanese economy and once the psychology of deflation has turned around to one of optimism and growth the trend will last a considerable length of time.

An efficient way to get access to Japan is by utilizing Exchange Traded Funds (ETF’s) the ishares MSCI Japan Index Fund (EWJ-N) tracks a broadly based index of Japanese stocks. The top five holdings in the fund are Toyota, Mitsubishi Financial, Mizuho Financial, Sumitomo Financial and Canon Inc. The fund is quite large approximately $14 billion and very liquid with 1 billion units out standing. This is an inexpensive fund with a management expense ratio of only 0.59%.

For investors looking to diversify into a strengthening international market Japan appears to have the potential to out perform many other regions over the next 18 to 24 months.

For more information go to www.campbellreport.com

China and Greenspan upset markets:

2007-02-27T14:25:00.000-08:00

The sell off in China over night has put North American combined with Allan Greenspan’s caution that the US economy could be in recession by the end of the year put investors in a selling mood. The Dow Jones Index at one point was down over 550 points. The S&P/TSX was down over 400 points the China sell off triggered investors to crystallize their profits.

The main theory seems to be that the economy in China may not be as robust as last year and that led to a sell off in the commodity stocks even though the commodities themselves were stable. The uranium sector got hit hard on the assumption that China will not follow through on the expansion of their nuclear power plants.

All of this is giving investors an opportunity to buy base metal stocks at much better prices than they were. The basic fundamentals have not changed in Asia only the stock market levels have changed. The market in China has been seeing an excessive amount of speculation over the past few months being fueled by the huge run up in prices over the past year. The speculators are generally unsophisticated and have been using leverage to increase their exposure, this always ends in tears and it will be no different this time.

North American investors have to keep the fundamentals in mind and realize that the markets have been going up steadily all year and have been due for a set back. The current sell off may extend for a week or two but over that time frame there are going to some very good buying opportunities. Investors have to ignore the shouts by the media that the end is near, they have never been able to call the top or the bottom of a market move before and I doubt they will be able to do it this time either.

For more information go to http://www.campbellreport.com/

GM rumored to be looking at buying Chrysler:

2007-02-20T14:29:00.000-08:00

The rumor mill is just humming with talk of GM buying Chrysler. This would be a huge deal and would change the dynamics in the global auto sector. The notion that the largest car maker in the world would buy the third largest is quite intriguing.

If this deal does go together it will create a flurry of auto mergers just so that the other car makers don’t get buried. The deal would likely be the final nail in the Ford coffin and force the company out of business. Ford has not been nearly as aggressive in making changes as it should have and I believe that none of the other auto makers would be willing to take on the risks of merging with Ford at this point.

The potential for a massive change in the auto sector is very high if this first deal gets finalized. The rush to achieve similar economies of scale will be dramatic. The rationalization of plant and personal will be massive as well. The layoff numbers we have seen recently will be nothing compared to the potential layoffs that will be planned due to the consolidation of the entire global industry.

The only way this deal makes any sense is if the newly merged company reduces duplication and cuts the number of models down to only a couple of dozen not the 100 or more currently available. I wouldn’t want to be in the auto parts business if that happens.

For more information go to www.campbellreport.com

Institutional Investors looking at Europe:

2007-02-14T11:41:00.000-08:00

Merrill Lynch has released an updated survey of institutional investors and the current survey reports a very bullish sentiment by these professional investors. The survey also indicates that the bullishness is not reserved just for American markets but surprisingly there is a renewed interest in European shares.

It seems to me that the increased interest in Europe is not consistent with the deteriorating fundamentals in the region. The European Central Bank (ECB) has been focused on fighting inflation for so long they don’t see anything else. This stance has forced the ECB to increase interest rates over the past year to the point where they are now higher than US rates even as the economy in Europe has only seen small increases in GDP growth over that time frame.

The potential for continued economic growth diminishes with each interest rate hike. The impact of interest rate hikes on economic growth often takes 6-9 months to show up. The previous interest rate increases by the ECB are only just starting to have an impact on growth and the full impact is still likely months away.

The focus by the ECB on inflation and only inflation will reduce economic growth over the next year or so and slower growth will lead to lower earnings growth which will cause the equity markets in Europe to decline. Those getting in to European equities now have missed the easy money and are now taking on increased risk and reduced potential profits, not a recipe for successful investing.

For more information go to www.campbellreport.com

Winning with Finning International (FTT):

2007-02-13T15:34:00.000-08:00

Finning announced the highest ever earnings for the company in the third quarter coming in at $52.7 million or 59 cents per share verse $36.2 million or 40 cents per share for the same quarter of 2005.

The company reported revenue of $1.41 billion a 25% increase from the $1.12 billion for the third quarter of 2005. The dramatic improvement is largely due to the increased activity in the commodity sectors in both Canada and South America.

The demand for basic material in China and India has driven the prices of base metals to historically high levels and Finning is the largest Caterpillar dealer with operations in Western Canada and Chile, Argentina, Bolivia and Uruguay.

The company has been in the right markets and offering the right equipment and services for an expanding mining industry in these regions which appear to have only just started to upgrade equipment and technology in order to increase production to take advantage of the higher demand

Finning is one of the companies held in the Growth portfolio and it was included due to exposure to the commodity sector and for exposure to the global growth being driven by increased demand form Asia. First purchased in January 2005 the shares are up over 41% and appear to have the momentum to go higher.

For more information go to www.campbellreport.com

SXR Uranium One:

2007-02-12T14:49:00.000-08:00

SXR Uranium one announced a take over deal for UrAsia which sees SRX buying all of UrAsia in a share exchange where each share of UrAsia will be exchanged for 0.45 shares of Uranium One. This deal values UrAsia shares at $7.05 a 21% premium to the average trading price in over the past three weeks.

The deal vaults Uranium One up in the tier of senior producer with capacity of 7 million pounds of uranium annually. The combined company will have proven and probable reserves of 49 million pounds and total proven, probable, indicated and inferred reserves of approximately 389 million pounds of uranium.

The price of uranium has moved dramatically higher over the past three years from around $10.00 a pound to $75.00 a pound currently. The increase in demand due to new nuclear facilities coming on stream will maintain upward pressure on the price of uranium, while the addition of new supply has been slow to come to the market. The time frame to bring a new mine into production tends to be about 10 years, companies that are on the verge of bringing in a new mine or expanding production from an existing operation have an excellent opportunity for earning growth.

This merger positions SXR Uranium One as one of the larger uranium producers in the world and creates a opportunity for growth in a uranium market that is the best in decades.

For more information go to www.campbellreport.com

Changes at Home Depot:

2007-01-04T15:04:00.000-08:00

Home Depot announced the surprise departure of the CEO, Bob Nardelli, and effective January 2, 2007. The new CEO will be Frank Blake who was the Vice Chairman of the company.

The surprises just keep on coming it was reveled that Mr. Nardelli will be receiving a severance package valued at $210 million. There have been many shareholder complaints over the past few years concerned that Mr. Nardelli was being over paid and was underperforming as the CEO.

The company share price performance has been disappointing having with the share price down 8% over the past 6 years while under the guidance of Mr. Nardelli, this compared to competitor Lowe’s which is up over 200% in the same time frame.

Stock options made up a large part of the compensation package for Mr. Nardelli and Home Depot is now under investigation regarding the granting of options. The company recently stated that in reviewing their option granting procedures they have over stated earnings by $200 million over a 20 year period, this is not an inconsiderable sum.

Investors should be outraged at the severance package but relieved that Mr. Nardelli is gone, maybe a new CEO can turn the share price trend and bring some relief to the long suffering shareholders.

For more information go to www.campbellreport.com

Market Predictions 2007:

2007-01-02T10:56:00.000-08:00

The first thing I would like to do is review some of my forecasts for 2006. I find that I was right in some areas wrong in others but close in most.

I was not bullish enough on the equity markets in North America, expecting the TSX to reach a high of only 12,500 when the high for the year was just over 13,000. I was optimistic that the DOW would be the leader in the US and outperform the other major averages and that proved to be correct, but here again I was not bullish enough expecting the Dow Jones industrials to top out at just over 12,000 when the high for the year was 12,549, I was far too bearish of the technology sector with a forecast that the NASDAQ would only increase marginally to 2300 when in fact this index closed at 2470 seven percent higher than my target.

I was right in calling for high energy and base metal prices, although the strength in some of these commodities surprised me. I was far too bullish on the Canadian dollar relative to the US dollar with a target of 90-92 cents having expected the US to be in recession by now.

I was a little too bearish of the economy in North America generally and that had an impact on my interest rate forecast, calling for rates to be falling during the year. A lot of the interest rate forecasts will actually be seen this year.

In many of the forecasts I am right but maybe a little early. The one surprise which did materialize was the sell off in the income trust sector.

Now for my views on what is likely to develop over the next year.

Canada:

The TSX will continue to perform well over the next 12 months but will not be as robust as over the past 2-3 years. The TSX is more likely to see a high single digit advance reaching a high for the year in the second or third quarter of 14,000.

The TSX will continue to see strength from the commodity sectors such as energy, base and precious metals. The financial services sector will hold up well but will not be a big factor in the over all advance in the Canadian market.

I am expecting interest rates to fall as the economy shows more consistent signs of slowing, the Bank of Canada will lower rates by 0.25% five times in 2007 bringing the Bank rate down from 4.25% to 3.00% by year end.

The rest of the bond market will rally as investors realize that rates are going to decline substantially, the 30 year government of Canada bond yield will decline from the current 4.10% to around 3.25%. The 30 year Zero Coupon (strip bonds) offer an attractive capital gain potential as this happens.

Commodities:

I am expecting the price of crude oil to remain relatively high trading in a range of $55.00 t0 $70.00 a barrel due to ongoing supply disruptions. Natural gas is a little harder to forecast as the price is tied quite closely to weather conditions but if 2007 is a normal year I would expect natural gas to trade back up in to the $8 -$10 range.

In the Base metal market I would expect to see copper trading between $3.00 and $4.00 a pound, zinc in the range of $1.90 to $2.25 a pound and nickel in a range between $14.50 and $16.50 a pound. This should keep the base metal stocks in the forefront of the move higher over the year.

The price of uranium which has been moving steadily higher over the past couple of years will continue to move up and may reach $100.00 a pound as it will remain in short supply.

The precious metals have been moving up recently and this trend is likely to persist and would accelerate if the US dollar weakens as I expect. The price of gold is likely to move back to the recent high of $750.00 an ounce while silver will move through the high set this year and is likely to touch $20.00 an ounce some time in the next year.

The surprise in the commodity markets will be the surge in the grains as the world demands more variety in their foods and as the ethanol craze uses any excess corn that may be available.

US Markets:

In the US the Dow Jones industrials Index had an excellent year up 16% coming in with the best return of all the major indices. The Dow has more exposure to oil producers and this has helped to push the index higher. Going forward the Dow will have a hard time producing double digit returns in 2007. The US economy is showing signs of slowing and this will have a negative impact on earnings growth over the next 12 months. The Dow will still be the leader due to the multi national companies in the index which will see a benefit of a weaker dollar on over seas sales.

My forecast for the Dow is a moderate up move to 13,250 in the first half of the year then a slide back to around 12,000 in the last half of 2007 as recession concerns dominate investor sentiment.

The NASDAQ was up about 10% in 2006 well ahead of my expectations. The recovery of a number of major technology stocks added strength to the NASDAQ over the past six months. The technology sector still seems to be over valued to me and the excess capacity that was created in the late 1990’s has not been fully absorbed. If the economy slips at all and consumers slow down their pace of consumption price discounting in the tech sector will become even more fierce causing losses at many companies.

As the economy slows I expect the technology sector to be hit hard and with that the NASDAQ will lose value. The NASDAQ could move marginally higher in the first couple of months of the year, but after that it looks down hill all the way to the end of the year with the index closing at or below 2175 a decline of at least 10% from the 2006 closing level.

The Federal Reserve will be forced to lower interest rates starting in the first quarter of 2007 as the economic slow down gains momentum. The Fed will bring rates down for the balance of the year with the Fed Funds rate ending the year down 1.5% from the current 5.25% to close the year around 3.75%.

There are a few areas that bear watching any of these would have an impact on these forecasts. The option backdating scandal could easily blow up into a major event as the SEC and other Federal agencies dig deeper into the process. There is a distinct possibility that this could become another Enron style blow up which could have an impact on a wide range of companies, most in the technology sector creating a very negative investor sentiment towards technology companies.

The Middle East remains in turmoil, Iraq, Iran and Israel are all volatile countries there could be any number of surprises develop in the region any of which could cause the price of oil to surge to new all time highs and cause a global economic slowdown as a result.

As the Democrats take control of the house in January they may be in a very aggressive mood on trade and related areas the potential fall out could be a loss of confidence in the US or a heating up of trade disputes either of which will not be good for the global economy.

So as the saying goes “be careful out there”.

Uranium on a Tear:

2006-12-07T14:10:00.000-08:00

The price of uranium is up again due to increased concerns regarding supply. The commodity price has increased dramatically over the past two years up from $20.00 a pound in December 2004 to $64.00 a pound today and continues to power higher.

The recent announcement by Cameco (CCO-T) regarding the flooding at their Cigar Lake Mine and the uncertainty about when that project will be able to get back on line has created a fear of a long term supply shortage. Cameco is the global leader in the production of uranium and had planned to have Cigar Lake up and producing in the very near future, it is rumored that the flooding at the mine halt production for up to 5 years.

Other producers will benefit from the price increase as will any companies that can bring on new production in the relatively near future. There is a high potential that the uranium price could reach $100.00 a pound in the next year or so.

The shortage in current production is being made up from surplus military supplies, those supplies are finite and will likely run out in the next 4-5 years.

According to the World Nuclear Association there are 442 reactors operating, 28 under construction, 62 planned and 161 proposed. If all of theses new plants are completed the number of reactors will increase by 56% from current levels.

There is a huge opportunity for investors in the uranium sector, the commodity does not trade in an open market and investors will have to look at individual companies.

Cameco in the largest producer in the World and even with the set back at Cigar Lake offers excellent exposure to the sector. Cameco supplies approximately 20% of the global demand and holds the largest reserves with 550 million pound of combined proven and probable reserves. Cameco has just increased he annual dividend by 25% per share to 20 cents from16 cents.

Denison Mines (DEN-T) is an emerging second tier producer that has been on the acquisition trail over the past few months in an effort to vault up in the production ranks. DEN recently completed a merger with International Uranium Corp and is in the process of the take over of Omegacorp Limited an Australian uranium miner.

SXR Uranium One (SXR-T) is currently developing to properties the Dominion mine in South Africa and Honeymoon mine in Australia. The company expects top have the South African mine in production in early 2007 with an initial capacity of 2 million pounds of uranium annually moving to 4 million pounds by 2011. The Australian mine in forecast to be in production by 2008 with a production capacity of 800,000 pounds annually.

The uranium market appears to have the potential for a sustained move higher as demand continues to increase while supply is slowly coming on stream.

For more information go to www.campbellreport.com

Wi-LAN (WIN-T) breaks out:

2006-12-05T14:17:00.000-08:00

Wi-LAN Inc yesterday announced a patent licensing deal with Nokia, that see Nokia paying $15.2 million and transferring 93 patents to Wi-LAN in exchange for the licensing of all of Wi-LAN’s wireless technology patents.

The patents that Wi-LAN has acquired will allow the company access to a new sector, the in the high speed internet space. Wi-LAN now has access to Asymmetric Digital Subscriber Line (ADSL) technology which the company believes will have to be licensed by a number of North American companies. The enhanced portfolio of patents positions Wi-LAN for growth over the next few years.

This is the largest patent licensing deal that Wi-LAN has completed and is the first since the company reorganized. Getting out of the hardware production business and concentrating on the licensing of the patents they have developed over the past few years.

The new CEO, James Skippen, has a background in this field and was previously the Vice President of patent licensing at Mosaid Technology Inc. The company exited the broadband wireless equipment business earlier this year selling the manufacturing facility and moving the head office from Calgary to Ottawa.

The company’s shares have been on a tear over the past two days and have now broken out past the previous high set in 2004. The increased momentum and volume are very encouraging indicators that Wi-LAN has started a new up trend phase. The break out has begun and the next target is $7.50 and this could happen relatively quickly.

see www.campbellreport.com for more

Pfizer Surprise hits Drug sector:

2006-12-04T13:38:00.000-08:00

Pfizer (PFE-N) caught the market by surprise over the weekend with the announcement that the clinical trials of their promising new drug Torcetrpib have been stopped. The drug trials were being over seen by an independent monitoring agency which called for the suspension of the trial due to adverse patient reactions which have led to the dead of 82 of the participants in the trial.

The trial was being done on a global basis with 7,500 participants the cancellation of the trial sets Pfizer back regarding the potential for a replacement for their current cholesterol drug Lipitor. Torcetipib was expected to be used in combination with Lipitor as a new form of cholesterol fighting drugs.

Pfizer shares are down $3.24 to $24.62 or about 11.5% and have been a negative for the rest of the sector as well pulling down all of the other major drug company shares.

This is the main risk when investing in the drug and biotech sectors the market punishes disappointments and it can take a considerable amount of time before investors are willing to buy the shares again.

Investors who have the patients should be looking at Pfizer as a buy, the current sell off is a reaction to this one particular trial and seems to have dramatically discounted the other potential drugs in development.

For more information go to http://www.campbellreport.com/

Pengrowth deal invigorates Energy Trusts:

2006-11-29T17:55:00.000-08:00

Pengrowth Energy has announced they will buy $1.04 billion of oil and gas assets from ConocoPhillips Co. The deal meets the proposed new rules on energy trust expansion laid out by the Federal Government. The Government has set an arbitrary limit to the expansion of an energy trust to 15% of existing equity.

The Pengrowth - ConocoPhillips deal is a mix of debt and equity with approximately 65% of the funds raised by debt financing and 35% by the issuance of equity. The additional 20 million units will add about 9% to the current equity outstanding at Pengrowth.

The additional assets will increase oil & gas production by 27% to 100,000 barrels per day and proven reserves by 22%.

The deal is the first since the October 31st announcement by the Finance Minister that income trusts will be subject to income taxes in 2011 and placed a restriction of 15% on the increase in equity by a trust. The new reality in the income trust sector is that the companies will be expanding by issuing debt and there seems to be an appetite by Canadian Banks to get involved in this new stage of expansion in the energy sector.

It seems to be business as usual in the energy trust sector unless the Government changes the rules again when they finalize the process in the next few weeks. It seems appropriate to look at energy trusts with low debt levels as the most likely to have the potential to expand and grow under the new rules. Trusts with high debt levels will be severely restricted going forward and are likely to be left behind by investors.

For more information go to http://www.campbellreport.com/

Time to Prepare for Year End:

2006-11-28T15:03:00.000-08:00

This is the time of the year to sit down and review your portfolio. The review should be as objective as possible with the goal of weeding out the losers and concentrating on the winners. The idea is to go over all of your decisions and decide what went right and what went wrong, do not use this as a session to beat yourself up.

Remember that not every investment is going to work out the way you want, but if you can learn from those decisions then the investment wasn’t a total loss. There are two types of capital, real and mental, the cost of losses in real capital can be easily calculated, the cost of losses in mental capital is very much harder to quantify.

The mental capital we expend in making investments can be much more expensive that the real capital over the long term so we have to manage that segment carefully or we run the risk of trading paralysis due to uncertainty and lack of conviction.

One of the best ways to retain mental capital is to sell the losers! I don’t mean the ones that are just underwater, I mean the ones we fret about and worry about, the ones that hold us back from making new investments. If you are holding any investments that you a HOPING will recover sell them now sell them today, hope is not an investment strategy. One more thing do not ever add to a losing trade, averaging down is an almost guaranteed method of going broke.

The decision to sell is often the hardest one to make especially when you take a loss, but by ridding your account of the bothersome holdings it will free up an amazing amount of mental capital that you can compound into winning trades next year.

For more information go to www.campbellreport.com

Canadian Banks start reporting Year End results:

2006-11-27T10:39:00.000-08:00

The Bank of Montreal (BMO) is expected to report quarterly and year end results today. The expectation is that the BMO will come in with $1.25 per share for the quarter slightly below the $1.30 in the third quarter. BMO is expected to increase the dividend by approximately 12% to $2.78 per share annually.

The Canadian banks have been one of the more stable sectors in the market and have seen a lot of interest by investors looking for income. The banking sector has a long history of increasing dividend payouts over time and is viewed as stable high income common share investments.

The recent changes by the government regarding taxation of income trusts has increased the attractiveness of bank shares due to the potential for higher income as profits grow. This increased interest has pushed bank shares higher over the past month and in many cases the share price is becoming over valued. Investors should be cautious and not become over exposed to this sector as any disappointment in earnings will have a negative impact on the share price, expectations have become a little too bullish for my liking.

The rest of the banking sector reports over the next two weeks with the Royal and National Banks on November 30th, CIBC December 7th, TD and Bank of Nova Scotia on the 8th.

For more information go to www.campbellreport.com

Violence in Iraq watch out for an oil price spike:

2006-11-24T11:25:00.000-08:00

The escalation in violence in and around Bagdad is likely to have a spill over effect in the rest of the region. The sectarian violence is based on the two main Muslim sects and the different views have been causing problems for centuries.

The religious fighting appears to be pushing Iraq into a civil war and because the war is based on differences in religion it is quite likely to spread to other countries in the region. When the violence spreads you can be assured that there will be disruptions in the supply of oil out of this region to the rest of the world.

Investors should be prepared for higher oil prices in the near future owning oil producers that are not dependent on the Middle East for supply are an excellent hedge against a spoke in crude oil prices.

The Canadian market offers a number of producers to choose from, I would look first at companies with long life reserves such as Suncor (SU), PetroCanada (PCA), Canadian Natural Resources (CNQ) and Nexen (NXY). All of these companies have the majority of their properties in safe secure areas of the world.

For more information go to www.campbellreport.com

International Nickel Ventures (INV-T):

2006-11-23T17:03:00.000-08:00

Nickel prices remain elevated and appear to be in a long term bull market due to an increase in demand from Asia. Investors in a potential nickel mine coming on stream in the next few years will be rewarded from the continued high commodity prices.

International Nickel Ventures has just released an update on the potential resource in their Brazilian property. The Santa Fe and Iproa nickel deposits which are located in Goias state of Brazil. The property is being developed as a joint venture with Teck Cominco (TCK.B-T) 25% and International Nickel 75%.

The data from the completed 55,000 meter 4100 hole drill program shows an inferred resource of 109 million tonnes grading 1.11% nickel. This is an increase of approximately 20% from previous results due in large part to the inclusion of peripheral areas not previously explored.

International Nickel is well funded with $17.5 million in cash available to meet future obligations this equates to approximately 50 cents per share in cash. The expertise available from the joint venture partner Teck Cominco adds to the potential for success in the development of this property.

For more information go to www.campbellreport.com

Another Mining Mega Merger:

2006-11-20T16:24:00.000-08:00

Freeport-McMoRan Copper& Gold Inc. (FCX) has made a takeover offer for Phelps Dodge Corporation (PD) the deal has an estimated value of $26 billion. Phelps Dodge shareholders will receive $88.00 in cash and 0.67 common shares of Freeport-McMoRan for each Phelps Dodge share tendered, the cash portion represents about 70% of the total offer.

The combined company will be the second largest copper producer on the planet with combined reserves of 75 billion pounds of copper, 41 million ounces of gold and 1.9 billion pounds of molybdenum (moly). The new company has annual production capacity of 3.7 billion pounds of copper, 1.8 million ounces of gold and 69 million pounds of moly.

The combination will have very strong cash flow of $5.5 billion annually and revenue of approximately $16.6 billion. The company will be geographically diverse with operations in North & South America, Africa and Indonesia. The Freeport-McMoRan Grasberg Mine in Indonesia is the worlds largest copper & gold mine when measured by reserves.

This merger will create a global powerhouse in the production of base metals and will enhance the potential for future growth opportunities.

For more information go to www.campbellreport.com

The Future on track for CP Rail:

2006-11-16T14:58:00.000-08:00

CP Rail has increased its guidance for the coming year by approximately 13% raising earnings forecast to $4.30 – $4.45 per share up from the previous estimate of $3.95 per share.

The company expects revenue to increase 5-6% with both load volume and prices forecast to rise. The company is seeing strong demand well into 2007 this increase along with continued emphasis on productivity enhancements should add to the bottom line on a consistent basis.

The Canadian railways are in an excellent position for growth as the global demand for materials and grains supports the expansion of service across the country. CP Rail (CP-T) is an attractive buy with good long term potential for capital growth and increased dividend income.

For more information go to www.campbellreport.com