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PLAYING WITH METAL'S FIRE
The Philippine Star With the dollar weaker after the recent quarter point interest rate cut by the US Federal Reserve, and with energy prices surging on concerns about tightening crude oil supplies, investors are predictably flocking to the relative safe havens of base and precious metals. No wonder that gold for instance, is barreling at about $800 an ounce, hovering at a 27-year peak, and in the process, giving a lift to metal and energy stock market that has become more sophisticated and complex. Analysts are now expecting gold to climb to a jaw-dropping $1,000 an ounce by next year, especially if the dollar continues to tumble because of a weak As has always been the case when inflationary concerns are sparked by a weak dollar, surging oil prices and worries about world political tensions, investor find comfort in the thought of putting their money in something seemingly more tangible asset as base and precious metals like gold. There is a record-setting interest in the futures and options market for gold, a sure indication of the current market's high liquidity. With so much demand, futures contracts are growing so fast with investors preferring to hedge during these volatile times. While the price of gold is rising in the futures market, investors are also pouring money into exchange-traded funds that track gold. And there are no indications that jewelry demand is subsiding as a result. The World Gold Council pointed out that the gold price would have to reach $2,000 an ounce to reach the inflation-adjusted peak of 1980, so the $800 level isn't as overwhelming as it was 30 years ago when gold struck about $893. Bustling local market At our local exchange, mining and energy-related stocks are predictably tracking world markets. This is reflected in mining stocks of companies that are already shipping out gold and copper ores, such as those from the Philex Mining Corp.'s mines or from Atlas Consolidated Mining and Development Corp.'s Berong nickel ore grade mines in Palawan. Atlas, by the way, is also rehabilitating its dormant However, there is a downside to the robust world demand for gold and other precious metals. Mining companies that are still in the exploration stage are also objects of interest by both seasoned as well as neophyte market investors. It is not surprising that there is now a lot of speculative buying going on in the stock market. Knowledge is power Well and good for punters or those that buy on speculation with the intention of unloading when certain highs are breached. It's quick money for the smart and experienced players. But when you have those investors who are simply being carried by the investment tide – and these are the ones that often will find their investment dreams turn to horrific nightmares because they didn't bother to check on a stock's fundamentals – the story ending could very well turn out to be less palatable. There is of course the new Philippine Mineral Reporting Code that requires declaration of mineral exploration results, mineral resources and ore reserves, which the Philippine Stock Exchange also requires for mining issues – all to protect the safety of investors. This reporting code was developed by multi-sector agencies: the Mines and Geosciences Bureau, the Chamber of Mines of the Essentially, the code outlines proper disclosure procedures for both operational and new mining companies still in the exploration stage. It also adopts globally-accepted reporting standards for listed mining entities. The aim is complete transparency, and the language shouldn't be vague and unintelligible to ordinary investors so there is no chance of being misled. This helps provide current and would-be investors with basic information on any local metal mining company. Investing blindly is costly But then again, investors need to do their own homework. I suppose if one is risking so much money on highly volatile commodity stocks such as mining, one should at least bother to dig a little deeper, study past boom-and-bust cycles, chart previous investment trends, and assess how new patterns could emerge. In today's uncertain times, investors need to be a bit more informed and not just buy on knee-jerk reaction to events. Investors who buy stocks blindly will surely lose more than their shirt. In a recent stockholders' meeting of a local mining company, a huge number of small investors, mostly retirees, were berating board members that the value of their stocks were virtually worthless. There was really not much that could be done to recoup their losses. One doesn't have to a genius or a super-sophisticated investor to be protected from potential pitfalls. Just a bit of looking into a company's track record would undoubtedly help many in making wiser investment decisions. An analyst once mentioned why a particular mining issue was performing so well. He said that not only is the company enjoying higher prices of commodities in the world market, but that the company had also adopted new technologies when it tied up with a foreign mining partner, thereby further increasing its production. With a better understanding of the new and strikingly different forces at work behind the precious metals scene, one can be better prepared for the next potentially explosive price movement. Filoil Flying V Collegiate National Championship Quarterfinals The “sweet sixteen” is gradually being reduced to the “glamorous eight” as the Filoil Flying V Collegiate Championship games approach the quarterfinals phase with just one more slot open. Battling for this precious position are the Already in the round of eight are: FEU Tamaraws (eliminated MLQU Stallions), UST Growlng Tigers (eliminated Mapua Cardinals), San Beda Red Lions (eliminated Sacred Heart Colleges-Tacloban Stallions), JRU Heavy Bombers (eliminated West Negros Colleges Mustangs), STI Olympians (qualified with the withdrawal of UE Warriors), Ateneo Blue Eagles (eliminated San Sebastian College Stags) and University of Mindanao Wild Cats (qualified with the withdrawal of DLSU Green Archers). The Round of Eight games start on Monday, 19th of November 2007, to be held at the Arena, Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center,
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