Stelmach Decision Unveiled

The day finally arrived on Thursday, October 24, where the new royalty regime in Albertavala, I mean Alberta was revealed. In a nutshell, new royalty rates (about 20% higher than currently) will take effect in January 2009. This will amount to an investment lost of approximately 1.4 billion dollars by Alberta's Oil Patch. If you couple that with the Trust Decision of last year, companies bottom lines will be hit. Add in low natural gas prices and high labor/material costs and you have a recipe for financial disaster in the so called "economic engine" of Canada.

It appears Premier Stelmach has chosen to take quite a different path than his predecessor by sticking it to Big Oil and instead has chosen to represent the little guy. This decision might get the government in trouble legally and from an investment standpoint. Legally, they have broken a binding agreement with Suncor and Syncrude by raising taxes. The investment community does not like uncertainty, and with the Trust Decision last Halloween and now the Royalty Decision, foreign investors have lost all faith in Canadian government.

So what does this all mean for us, the investors out there. I was a little surprised by the markets strength on Friday, especially in companies with big exposure to Alberta. I don't know if people are just taking a few minutes to take in the decision or if they believe that commodity prices will make up for any extra taxes. I wouldn't be surprised to see a sell off next week.

I have sold out of my last energy trust. Being double dinged is not my idea of "investor friendly" and I have a sneaky feeling that many are going to do just as I have. I have decided to reallocate my money into gas weighted plays outside of Alberta. The north sea has been rejuvenated by some very aggressive and ambitious juniors which will benefit from the slow down in Alberta. Two companies I really like out there are Antrim Energy and Ithaca Energy. Antrim has been hitting on every well drilled and has discovered what looks to be a huge reservoir of oil. Ithaca has been hot lately and recently hit a high of $4.00 a share. Their share prices will continue to rise with more drilling results and investor interest in the North Sea. I have also allocated some of my oil money to Argentina. With recent drilling success by Petrolifera and others, a junior has caught my eye by the name of Argenta Oil and Gas. They are brand new (just started trading in September) and have an aggressive drilling program set for the fall/winter. They are currently trading at $0.55 with a market cap of about 50 million. I have added links to both Antrim's and Argenta's websites on our watch list.

Overall, I am still quite bullish on commodities in general and gold/silver in particular. Gold has had an amazing run since September and is now ready for a little breather. It is tough to predict when gold might correct due to all the other factors occurring in the world right now. We have tensions in the middle east getting higher, mortgage defaults in the US, Bernake's rate decision, high oil prices, etc. etc. that just seems to keep gold powering ahead. No matter what happens in the short term, it is good knowing that we are definitely entrenched in a commodity bull market that has many more years to go.

New Look to the Blog

As we move into the heart of the fall/winter investing season, I have decided to update the GTIC Investment blog format and its content. My goal is to use the blog as a meeting spot to explore investments, keep up to date on companies activities and share our thoughts on what is happening in the investing world.

I have added some new elements to the page that will hopefully save club members time in finding the information they are after. Through these elements it will be easier to keep track of the companies we invest in and want to invest in. We can also strengthen our knowledge which will assist us in making better decisions as investors. Hopefully, the blog will act as a lighthouse guiding us all through the myriad of decisions required to be successful at investing.

The about the editor will serve as a place to introduce people to the blog, the club and myself (the editor). I am hoping that the blog will connect our group to other like minded investors where we can share our thoughts and hopefully make more informed decisions through this communication. I encourage visitors to either email me or leave a comment on the blog.

Below the Blog Archive, I have posted the names of all the companies we currently are invested in. Each name is linked to the company website, to assist us in keeping up to date on company news. The growth of the club and capital that we have to invest has made it harder to keep track of all our investments. The blog will help us with this. If we sell a company, I will remove that company from the list. I will add any new companies that we buy to the list as well.

I have decided to add a watch list below our portfolio. Hopefully this will facilitate more indepth research and discussion on potential investments. The one company on the list that I am personally sharing at the meeting on Saturday, November 3 is Tumi Resources. They recently had a private placement at $0.72. The money is being used to fund further drilling on their La Trini Deposit. This deposit returned some very high silver grades on their initial drilling. Tumi are now attempting to expand the resource. They are currently drilling and should have assay results out by the end of 2007.

Below the watch list, you will find a number of internet research resources. The links are very valuable and provide a ton of expert advice on various investments. The forum and blog links will allow you to see what other investors are thinking.

To add to the interactivity of the Blog, I have added a poll question. I will change this question from time to time to get feedback on different issues.

At the very bottom of the page, I have added a news link that will flash current events related to gold, silver, oil and natural gas. Hopefully, these changes will increase our traffic to the blog and knowledge that we have on investments. This will help us all succeed in adding more gravy to our own portfolios and net worth.