I suggest you watch and listen carefully to a November 25 interview by Consuelo Mack of Mark Holowesko that appears on the WealthTrack website.  Holowesko was selected at age 27 by Sir John Templeton in 1987 to ‘run the Templeton Funds’.  Now 51, he heads Holowesko Partners Ltd., an investment fund headquartered in the Bahamas.   He has a very calm and non-promotional demeanor.

For the reasons he discusses in this 24 minute interview, he believes there are significant opportunities today in the equity markets.  I found this interview very interesting and thought-provoking.  I suggest you invest 24 minutes watch it, and listen carefully to what Mark Holowesko has to say.

On an overview basis, I took the following things from the interview:

• Holowesko quoted Warren Buffet to have said “Diversification is protection against ignorance”.  He evidently agrees with this as currently 19 stocks represent 47% of value in one of the funds he manages.  I have often said in these commentaries that I am not a believer in ‘buying the market’, as contrasted with focusing on, buying, and carefully monitoring comparatively few carefully selected companies;

• Holowesko thinks mergers and acquisitions will pick up in the next few months because many companies have cash, and in the current environment companies with cash will buy existing capital assets rather than build new capital assets.  That makes sense to me.  My only caveat would be that if there is a serious financial markets decline in the near term, a lot of things will be ‘put on hold’ that otherwise would not be;

• He believes in continuously assessing, and where appropriate, in his view, changing his investment approach.  That can only make sense, with the amount of sense that makes being directly proportional to the point in time extent of market volatility and uncertainty;

• The Holowesko Partners Fund Portfolios turn over only about 28% per year, and Holowesko ‘hopes to be wrong’ not more than one-third of the time.  When losses are incurred, he believes in spending as much time as is necessary to ‘figure out’ why that happened – in order to learn and hopefully protect against losses on subsequent investments.  Again, this approach only makes sense to me;

• His #1 job is to manage risk.  He continually assesses ‘how much can be lost’ against ‘how much can be made’.  This is consistent with how I look at each investment I make – including one I made about two months ago and was reassessing just last week.  You may recall that I have said in these commentaries that I believe that if I own a stock that every day I don’t sell it, is a day I buy it.  If you do not view your equity holdings that way, you might think about whether my thinking on this makes sense to you;

• The Holowesko Funds currently are 104% invested.  I assume this means they have borrowed to invest and currently don’t hold cash.  I suggest if I have interpreted Holowesko’s remarks correctly that is very contrarian.  This for me emphasizes what I consider to be the importance and value to you of watching and thinking about this interview;

• In summary, Holowesko believes there are currently great investment opportunities in specific public companies (I assume his funds are invested in them) because several of those companies have (in his words) phenomenal balance sheets, can pay their entire current debt with 20% of one year’s cash flow, currently offer on average 3.6% yield currently, and if they grow at same rate over the next 10 years that they have over the past 10 years the price of those stocks would have to fall 40% to get same return as a 2% yield on 10 year U.S. Treasuries; and,

• People currently are thinking more about sovereign risks instead of company specific risk.

As I listened to him, I think Holowesko’s major theme can be fairly summarized in the following way:  ‘keep an open mind, adopt a simple approach of looking for ‘cheap companies’, and understand the financial markets are continuously changing.

While I am not sure it is ‘all that easy as that’, I do think the interview is well worth the time spent to watch it.  A word of caution.  I see, and I would be dumbfounded if Holowesko did not agree, that his investment philosophy is based on ‘long term holds’ where one doesn’t worry too much if at all about either small or severe market dips. I am unable to ‘time the markets’.  That said, I myself am not ‘rushing into them’ at this point in time.

Visit Stock Research Portal for stock market data, analysis, and research on over 1,600 Mining, Oil and Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer.

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I strongly suggest you read short article is titled ‘Pictures From A Latvian Bank Run As MF Global Commingling Comes To Town’ – reading picture review time (10 pictures) 3 minutes, thinking time much longer.  Published on Tyler Durden’s Zerohedge Blog, in summary the article says that following allegations of:

• embezzlement and document forgery against two former shareholders of a Latvian bank; and,

• accounting fraud and ‘abuse of authority’ against one of the two,

that there is a ‘run on’ (I assume only) that particular bank by its Latvian depositors.  I say “don’t think that could not happen in the United States, the United Kingdom, or a Eurozone country if MF Global et al prove to be the tip of a large iceberg”.

When reading this story I was reminded of a conversation I had in the summer of 1962 with a construction superintendant of a small company I was working with in Ontario (Canada) between my first and second years at University.  He told me his father had been a wealthy industrialist in Riga, Latvia’s capital.  He then told me, with the intent of improving what he saw as my poor work ethic at the time, that he vividly recalled when a child playing with his friends his father gave them a wheelbarrow full of paper Latvian currency – and gave it to them to play with in circumstances where that paper currency had had ‘exchange value’ only one day before.  As I recall, he did not use the word ‘fiat’, but did use a few expletives when describing what that event meant to his own economic well-being at the time.  My best guess is that the man who told me that story then was about 40 years old, placing the timing of his ‘play money story’ sometime at or close to the years of the Great Depression.

Fiat money has never had a history of permanence.  The story of the Latvian construction superintendant is a true one.

Visit Stock Research Portal for stock market data, analysis, and research on over 1,600 Mining, Oil and Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer.

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If you missed the announcement on Thursday, November 24, China’s Domestic Foreign Exchange Market began trading the Chinese Yuan (Renminbi) against both the Australian and Canadian Dollars.  This in circumstances where both Australia and Canada are said to be among China’s main trading partners, likely currently an overstatement in terms of Canada currently – but that may change over time if China’s annual GDP growth and appetite for resources continues at or close to levels experienced since 1999.

See ‘China allows yuan trading with loonie’ written by Lu Jianxin and Jacqueline Wong that was published in the Financial Post on November 24 – reading time 3 minutes.  You might also want to read an article that appeared in the Huffington Post on November 13 titled ‘Keystone XL Pipeline: Canada Eyes Asia After U.S. Delays Project’ – reading time 2 minutes.  My view on the commentary in the latter article:  Subject to extraction costs and methodologies, there is an abundance of oil in Canada’s Oil Sands.  Subject to issues around Canada:U.S. relations, I see no reason why, over time, oil from Canada’s Oil Sands will not be shipped to both the Chinese and U.S. markets.  ‘Over time’ might mean over the next few decades, not years, in this context.

Visit Stock Research Portal for stock market data, analysis, and research on over 1,600 Mining, Oil and Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer.

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Business Insider published a series of charts on Monday that accompanied a short article by Joe Weisenthal titled ’11 Big Charts That Show What A Mess The Economy Has Suddenly Become’ – reading time 6 minutes.

These charts show:

1. Consumer Confidence for the 2005 – 2011 period for the Eurozone, Japan and the United States;
2. Risk Perceptions in the financial sector for the 2007 – 2011 period for the Eurozone, the U.K. and the United States;
3. Financial Sector Equities performance relative to non-financials for the 2010 – 2011 period for the Eurozone, Japan and the United States;
4. The Organization for Economic Co-operation and Development (OECD) Financial Conditions Index for the 1995 – 2011 period for the Eurozone, Japan and the United States;
5. Sovereign Debt Spreads (10 year government bond yield spreads versus German Bunds measured by %) for Austira, Belgium, France, Greece, Ireland, Italy, Netherlands, Portugal and Spain for the 2010 – 2011 period;
6. European financial sector confidence of the 2007 – 2011 period;
7. Unit Labour Costs for the 2000 – 2011 period for France, Germany, Greece, Ireland, Italy, Portugal and Spain;
8. the CPB Indicator of World Merchandise Trade for the 2000 – 2011 period. Note, I have been unable to determine the organization that uses the acronym ‘CPB’;
9. Central Bank Liabilities for the period 2007 – 2011 for the Eurozone, Japan and the United States;
10. Government Gross Financial Liabilities expressed as a % of GDP for 31 countries; and,
11. Forecasted GDP % Growth per Annum for 2012 and 2013 for each of China, the Eurozone, Japan and the United States.

I suggest you take the time to visit these charts and review them in the context of what prospectively they may mean to the financial markets in a general context.  In this regard I have proven myself (to myself) unable to ‘time the financial markets’ with any degree of accuracy.  That said, over time, I do believe that macro-economic trends and certainties/uncertainties have to directly impact the financial market indices over time – whether those markets skewed more to trading or more to investing.

Visit Stock Research Portal for stock market data, analysis, and research on over 1,600 Mining, Oil and Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer.

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