[Cynus]

I'm looking to invest my year-end bonus and am trying to decide between USO or GLD (or something else). Any advice?

[lapulapu]

Mr. Bill is looking at Alberta RE.

[mmasters]

I'd say GLD all the way with inflation and the soft landing/recession or whatever they're "forecasting"

An overheated economy isn't all that great for oil demand.

[greenworm]

Neither, both are backed by violence and fear.

[50mpgVWTDI]

I have been very heavily invested in Canadian Oil Sands for several years. CNQ, SU, OST_un, COS_un, etc.

Doubled in 04, doubled again in 05, and now basically flat in 06.

I expect 07 to be better but still relatively weak. New deepsea production should satisfy weakened increased demand for oil.

In 08 however, expect demand to really exceed supply and seriously higher CL prices. Plan to hold on to current holdings.

Gold is always attractive, and the dollar has been weak. But the demise of the dollar has always been predicted (with good reason) but the decline has been rather weak. Plus you must contend with central banks holding large stocks - screwing up any real analysis of supply and demand. Other metal are probably more predictable.

Best,

[MrBill]

I am trying to decide how to invest my year-end bonus as well? I have it narrowed down to a cup of coffee or a danish? ; - )

Tough call this year? The movement in the price of crude this past few days is quite unsettling. Low volume due to year-end means the moves are exaggerated, but trading around $60-61 on mild weather, then up to $63 on Iran news, but the next day back to $60-61 again when the impact of the headline fades. Hard to make 12-mos. predictions based on headlines. Or the weather.

So my guess is that $60 per barrel that has a tendency to jump based on any cold weather fears or supply disruption concerns means that we are not likely to see $45-50 in 2007? I may be wrong, but that is just my take on the price movement heading into year-end. I think that if there was going to be a serious exodus out of the asset class that we should be already much lower by now?

Gold seems to be responding to a weak dollar. The USD seems to have a base of support at $1.30-1.3100 and resistance at the moment of $1.32-1.3300, but I guess most of our feelings are that the dollar is under pressure due to the fiscal & trade imbalances and therefore with lower FED funds forecasted in 2007 that this will erode interest rate differentials against the eurozone. One year LIBOR is at 5.25%, so the market is expecting at least one cut in rates in 2007. Down from two cuts.

Given faster Asian growth, and global growth that many come in at say 5% in 2007, then there should still be ample demand and therefore upward pressure on commodity, base metal and energy prices. A weaker dollar will not help that dynamic. However, a slowdown in the USA against a backdrop of modest growth elsewhere would probably have more of an effect on crude than precious metals that will respond positively to the weaker dollar and higher inflation expectations.

If I have a bias it would not be to invest in the underlying commodities, but the shares of producers. I am just thinking that crude may or may not jump from $60 in 2007 to reach the previous high of $78, and may just as well slip to $50-55? But even at these levels oil companies should still be making attractive profits, and their tendency has been to buyback shares and pay dividends rather than to re-invest in tough operating environments where resource nationalization is a very real problem for them. I think ditto for the mining companies, although I would be hard pressed to make any concrete recommendations as to which ones specifically?

And, yes, I think Alberta real-estate prices, especially multi-unit rentals in a tight market with very low supply, have a way to run, yet. However, execution is hard. It is not a passive investment. You need a mangement group or to be part of an investment syndicate or to enter via one of the many real-estate investment trusts that I know very little about? Good luck.

[Cynus]

OK, thanks for the info. Although I'm still as undecided as ever...

[MrBill]

$this->bbcode_second_pass_quote('Cynus', 'O')K, thanks for the info. Although I'm still as undecided as ever...
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I have vision while the rest of the world wears bifocals.

[Falconoffury]

I spent most of my bonus on a laptop computer, but my tax return is definitely going into a mix of precious metals and Euros.

[MrBill]

$this->bbcode_second_pass_quote('Falconoffury', 'I') spent most of my bonus on a laptop computer, but my tax return is definitely going into a mix of precious metals and Euros.