Commodities start to explode

The recent cut in interest rates by a half point by the US Federal Reserve has fired up commodities after the summer sell off. Economically, things are looking worse and worse each day in the US. Although companies keep coming out with positive earnings mostly due to the abundance of liquidity that is floating around, the overall picture does not look good for the coming year. The Asset backed mortgage collapse has shaken the system and we still haven't felt the full effect of the poison that has entered every financial market on earth. So what does all this mean for the Gravy Train and its investors....

Well, to begin we have been predicting this collapse for about two years now. We have loaded up on junior mining companies that will provide us leverage to the coming frenzy in commodities. Gold and Silver have both had a consolidation year after there rise in 2005. Many members are wondering when the next wave will occur...I think that wave is upon us. I am predicting that we could see a short sell off in commodities in mid October after Gold runs to $750 an ounce. This sell off will be the last chance to get into commodities when they are cheap. We should be ready to put some serious money down both as a club and as individuals. The trick will be to find the best companies to entrust our hard earned money between now and then. I predict that we will see $800 an ounce by the end of the year and $1000 an ounce by May 2008. Can you imagine how many people will have noticed gold by then. We are still in the early stages and have the advantage of foreseeing the rise that is coming. I have personally moved most of the investments into areas that will take full advantage of this run. Most financial planners will tell you that this is crazy so don't copy my actions unless you are prepared to lose it all (ya right).


Gold is not the only commodity gaining in price. Oil has also had a very good run and has broken through $80 a barrel. This should help out some of our junior producers like Bronco and Calvalley Energy. Bronco continues to be our top holding. They have had a very successful year and have recently expanded their land holdings. They have changed there plans a little as they are now drilling 300 wells this year versus the 30 or so that the originally had planned. The news flowing out of these wells should help the share price. Keep in mind that the NAV is over $20.00 a share. They haven't even started looking at their oil sands yet. Natural gas has struggled along as a commodity and has not kept up with its cousin oil. The traditional ratio of 6 to 1 on price is way out of wack. Gas should be trading between 10 and 15 dollars but is still stuck at $6.00. A cold winter could change this. Delphi, Ithaca and Cinch are all good holds to see what happens with the price of natural gas over the winter.

Overall, the Gravy Train looks poised to take full advantage of a commodity explosion. I am currently trying to track down some speakers for our October Meeting. We might have the opportunity to have the CEO from Silver Eagle Mines in to talk to us. The editor of a website called the silverbullreport has asked if we would be the audience for this presentation. The video will be put on his website for subscribers to watch. A great idea that I jumped at. Hopefully we can coordinate things to make this experience occur.

Well until next meeting, keep your eyes and ears open for some great investments and I look forward to seeing all of you in October.