Posted by Andrew Bell on July 30, 2008

Investors in data cruncher MacDonald Dettwiler (MDA – TSX) have been eating vacuum lately –  the stock’s down 20% this year  –  after Ottawa laser-blasted a plan to sell off the company’s space ops to U.S. bullet maker Alliant Techsystems (ATK – NYSE) for $1.3-billion in May.

The company reports Q2 numbers today, with a call set for 5:30 p.m. ET.  Analysts see profit up 25% at 56 cents a share

Fraser Mackenzie analyst Paul Bradley says the stock, currently less than $34, is a "Strong Buy" that’s headed for $55 within a year.

Dettwiler is a major provider of the "home information packs" that British property sellers must give to buyers. That hardly sounds like an enticing business right now when the Bank of England reported June mortgage approvals hit the lowest level since at least 1999.

But Bradley says Britain just announced plans to make the packs more elaborate. They may soon have to disclose any construction carried out (er, it was okay to cut those support beams, wasn’t it?) as well as on-street parking and property taxes.

 "The more detailed the information requirements for a HIP, the more value added that MDA can provide," Bradley says, noting that MDA is building "predominant market share… in what is normally one of Europe’s most active residential property markets."

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Posted by Andrew Bell on July 29, 2008

Nautilus Minerals (NUS – TSX), the miner that wants to scrape copper and gold off the seabed, has seen its stock plumb new depths as investors’ ardor for metal stocks cools.

The shares have slid 9% today to trade at just over $1.50, the lowest price in more than a year.

The company says "mine planning is well underway for the world's first seafloor copper gold mine in 1,500 metres of water" off Papua New Guinea. It hopes to start output in 2010.

Investors have in the past taken comfort from the fact that Nautilus’s big shareholders include Teck Cominco (7%), Anglo American (6%) and Russian metal tycoon Alisher Usmanov (22%).

And analysts seem to be aboard. Thomas Weisel Partners just began coverage with a buy rating and target of $4.50. BMO and Salman Partners also endorse the stock. 

Papua New Guinea’s vice minister for mining says: "I am happy with the environmental studies that are in progress as the exploration operations will be done 2 km beneath sea level, where marine life can hardly be found."

But the Australian Broadcasting Corp. says indigenous people from coastal areas are trying to halt the project, saying they want Nautilus to stop activities that pose a risk to marine resources until their concerns are heard.

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Posted by Andrew Bell on July 25, 2008

Raymond James analyst Brian Alexander thinks Celestica's big 40%-plus run-up this year has been too much too soon.  He cut the stock to Underperform this morning in the wake of last night's Q2 results.

The shares have soared after a series of  "beat and raise" quarters that led analysts to hike their earnings estimates, Alexander says, but "this trend ended in Q2, which was largely in-line and accompanied by in-line Q3 guidance."

He praises management for boosting profits but says "expectations will likely become increasingly difficult to exceed due to further deceleration in revenue growth and diminishing opportunity for improvement in Mexico and Europe."

And he warns that "going forward, management no longer affirmed the 4-5% year-over-year growth target they issued in the Q1 conference call as visibility into second-half 2008 has become limited."

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Posted by Mark Bunting on July 23, 2008

They are gurus of a different kind, if for no other reason than their ideas usually pan out far better than, say, Mike Myers’ ill-conceived brainstorm, The Love Guru. Yes, these gurus of the investment sort might be the most successful and well-respected emerging market investors there are:

Jim Rogers, author of many books including the recent A Bull in China, which makes a very compelling case for investing in that country for years to come.

Mark Mobius, he of the Man from Glad look, when he’s wearing a white suit, that is. Mobius handles $47 billion US in assets for Templeton Funds and is highly-regarded for his stock-picking. (BNN’S managing editor Marty Cej recently interviewed Mobius.)

And Marc Faber, publisher of the Gloom, Boom and Doom Report. You might have guessed that he’s slightly more bearish than other money managers.

Two of these gurus think the time is right to put money to work in some beaten-down emerging markets, especially China and India.

China’s CSI 300 Index is down 45% year-to-date. It’s the third-worst performing index this year of 88 tracked by Bloomberg. Only Iceland and Vietnam have performed worse in 2008.

China’s gross domestic product is rising at the slowest pace since 2005, albeit at about a 10% clip. India’s Sensitive 30 Index is down 30% this year. And inflation in that country is running at the fastest pace in 13 years.

But Rogers and Mobius smell opportunity.

Rogers is well-known for predicting the commodity bull market way back in 1999. That’s also the year he started buying Chinese stocks. He says he’s never sold any of them. Rogers says it’s no time to give up on China.

At the same time, Mobius has been rearranging his portfolio to take advantage of valuations for Chinese stocks that have fallen ‘’pretty dramatically’’ as he puts it. The price/earnings ratio on the CSI 300 is now at 21 after having hit a balloon-like 53 as the index rose over 160% in 2007.

The Sensitive 30 Index p/e is a reasonable 14.

Mobius also likes Brazil and Russia because of the energy and mining companies. He says the countries are ‘’swimming in liquidity." Having said that, Mobius’s main fund is down 19% this year.

As for Marc Faber, he thinks piling into Chinese stocks right now would be a mistake. Investors doing that would be setting themselves up for more losses.

Three gurus, three opinions and not a weak idea in the bunch.

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Posted by Paul Bagnell on July 21, 2008

After chewing it over for a couple of hours, investors seem to have decided they’re skeptical about the $39-a-share takeover offer announced for TransAlta Corp. this morning.

LS Power Equity Partners and Global Infrastructure Partners say they will bid that amount for TransAlta, which they believe would benefit from being privately held. An affiliate of LS Power, Luminus Management LLC, is the largest TransAlta shareholder at 9%.

When markets opened, TransAlta stock traded near the offer price very briefly before selling pressure brought it much lower.  It finished the day at $37.11.

I asked Daniel Shteyn why that might be. Daniel is an analyst covering the stock at Desjardins Securities in Montreal.

Daniel thinks investors see the fate of this deal as far from certain.

It’s an unsolicited offer, and may therefore need the support of TransAlta’s board and management to succeed. (Indeed, just three months ago, the TransAlta board successfully fought off an attempt by Luminus to replace the board and undertake a debt-financed share buyback.) And TransAlta’s board and management may not be open to the idea of selling.

The market may also believe that LS Power has made this move simply to draw other bidders into the process, so that it can sell out at a higher price. At the same time, investors seem to doubt there are any other bidders out there.

Daniel stressed that he doesn’t necessarily share those views – he in fact thinks the LS Power offer deserves to be taken seriously. It’s priced fairly, he says, and funded mainly by equity. The small debt component is committed. And LS Power seems keen to negotiate a friendly deal with the TransAlta board.

But it is still a transaction fraught with significant deal risk, he concludes.

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Posted by Andrew Bell on July 18, 2008

Imax Corp. (IMAX–Q, IMX-T) has topped $8 and it looks set to close at its highest since 2006, when it soared above $11 on hopes the company would fetch a rich price (there was talk of Bono and Sony bidding!) but  tanked when no buyer emerged.

Investors think the big-screen player may get a boost from The Dark Knight. The Batman yarn is showing on a record 4,366 screens of all types, practically round the clock, with some theatres offering the movie at 3 a.m. and 6 a.m.

Parts of Dark Knight were shot with IMAX cameras. New Yorker magazine reviewer David Denby says that if you see the movie on an Imax screen "you will feel, as Batman swoops down from a building at night, as if you were falling into a canyon."

Reviewers, chilled by the late Heath Ledger's portrayal of the Joker, give the film a stellar average rating of 82 out of 100 according to Metacritic.com. The New Yorker's Denby says "you can’t help wondering — in a response that admittedly lies outside film criticism — how badly he messed himself up in order to play the role this way. … [T]his young actor looked into the abyss."

Mind you Denby warns that "Warner Bros. has continued to drain the poetry, fantasy, and comedy out of Tim Burton's original conception for Batman (1989), completing the job of coarsening the material into hyperviolent summer action spectacle … this movie is grim and jammed together."

Salon.com also reached for the G-word, calling the film "a grim, predigested banquet."

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Posted by Michael Kane on July 18, 2008

I recently brought my Nintendo Wii game console into BNN so it could be used in a demonstration. In the enthusiastic discussion it prompted among my colleagues, I was forced to admit that I’m not very good at using it.

The right side of my brain works well, and I seldom fall down during intense concentration, but I can’t seem to co-ordinate well enough to "Wii" with any skill. Children and senior citizens are apparently quite good at bowling, boxing and batting … but not me.

Which led me to buy the issue of The Atlantic with the cover Is Google Making Us Stoopid? Even more thought-provoking than the article is the online reaction to it.

Try it. Put the title into a Google search and see what pops up.  The debate in the blogosphere about rapidly-developing technology and how it's used is fascinating.

I actually had the idea for the underlying technology behind the Wii console in the 1970s. I did a dangerous thing by reading about the theories of Alan Turing. Now there was a Wii man.

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Posted by Andrew Bell on July 17, 2008

Imax Corp. has slipped from its December high of almost $8 US but the stock has moved up more than 3% by mid-afternoon today to trade around $7.13 Cdn on the TSX (with its Nasdaq-listed shares at $7.18 US) amid growing buzz over the latest Batman flick, The Dark Knight.

The Christopher Nolan-directed epic opens in wide release in both conventional movie houses and on Imax screens at midnight tonight.

A strong showing for the movie, says Marla Backer of Soleil Securities, "could be another catalyst for Imax system signings near-term."

Canada's Cineplex Entertainment said today that advance ticket sales have reached record levels of close to $1 million. Roth Capital analyst Richard Ingrassia says advance sales in the United States show that the Warner movie "will challenge Spider-Man 3 for the largest three-day weekend in U.S. box office history."

Reviews look pretty good so far. Entertainment Weekly says that as the sinister Joker, recently departed Heath Ledger offers "a maniacal gusto inspired enough to suggest that he might have lived to be as audacious an actor as Marlon Brando, and maybe as great …"  (The 28-year-old actor died of a  prescription-drug overdose last January.) 

Rolling Stone raves that Ledger "is mad-crazy-blazing brilliant as the Joker. Miles from Jack Nicholson's broadly funny take on the role in Tim Burton's 1989 Batman, Ledger takes the role to the shadows, where even what's comic is hardly a relief."  

But nothing's certain in showbiz until the teens have seen the show and texted a verdict to their pals. Newsweek found the epic a tad wearying: "As the two-and-a-half-hour movie enters its second half, the unvarying intensity and the sometimes confusing action sequences take a toll."

And Imax has produced some nasty Joker-style jolts over the years, including two failed bids to sell the company. Roth's Ingrassia sees the stock climbing to $11 US but warns that investors have to "put aside the management's sometimes turbulent history."

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Posted by Niall McGee on July 15, 2008

Want to know how quickly generic drug competition can eat into sales of the original? Risperdal, an anti-psychotic drug sold by Johnson & Johnson, came off patent protection in June and the effect on sales of the original drug was immediate: Risperdal sales fell 16% year over year. That’s with only a few weeks of generic competition.

Fortunately for Johnson & Johnson it sells a lot more than just drugs. J&J also sells billions of dollars in medical devices and consumer health products. Goldman Sachs says its results highlight "the benefits of a broad and diversified product portfolio." J&J beat the street on profit and revenue, and also increased its profit forecast.

The stock rose, but not by much. Analysts are concerned about generic competition. Risperdal has lost its exclusive status.

Blockbuster epilepsy treatment drug Topamax – it accounted for $680 million US in sales in Q2 – is next. Early next year the floodgates open and the generics will charge in.

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Posted by Mark Bunting on July 15, 2008

The trend is your friend, as one of our former colleagues used to say.

And certain trends will continue for the TSX and S&P 500 for the rest of year. That’s the conclusion of a Portfolio Strategy from Scotia Capital.

One trend that shows no signs of changing is that of TSX energy and materials companies leading the earnings parade, according to Scotia. The other main trend that will likely not reverse is weakness in S&P 500 stocks.

In fact, Scotia thinks the thrashing that U.S. financials and consumer discretionary stocks have taken will result in broader deterioration across most sectors as global growth falters and consumers retrench … some more.

Scotia thinks S&P 500 companies might see negative earnings growth for the second straight year. That would be the first time since 1990-1991. But analysts polled by Thomson Reuters expect S&P 500 earnings per share to rise 6.4% in 2008. That includes 68% for the fourth quarter.

Scotia thinks that scenario if far too rosy. Its estimate for 2008 is 0.7% EPS growth. Thus, Scotia believes full-year earnings estimates from other analysts need to come down, something Wall Street analysts have already done for the second quarter, with consensus EPS estimates lowered in nine of 10 sectors.

Although, consensus forecasts are not gloomy for all U.S. stocks. The telecom sector is a bright spot. It's expected to have average Q2 EPS growth of 29%. Also, Scotia says the idea of an earnings turnaround for U.S. companies of a more muted nature later this year is not far-fetched.

Scotia sees TSX EPS rising 15% in 2008. But, exclude resource stocks and you're looking at tepid growth of 2%. Energy and materials stocks make up about 80% of the earnings right now in the TSX. Drilling more deeply, gold and fertilizers make up 58% of the earnings in the materials sector.

So, more of the same then, says Scotia. The TSX will outperform the rest of the year thanks to the nearly 50% weighting of resource stocks. And, the pain and misery will continue if not increase in the U.S. Maybe investors should make those trends their friends.

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Posted by Paul Bagnell on July 14, 2008

Biotech? Rallying in the most risk-averse stock markets in years?

Yup.

It surprised me to learn recently that exchange traded funds focusing on the notoriously volatile biotechnology sector were vastly outperforming the general market this year. But it’s true.

As I reported this morning, the Biotechnology HOLDRs ETF (BBH on the Amex) has gained about 8% since the beginning of the year and the SPDR S&P Biotechnology ETF (XBI on the Amex) has gained about 2%.

The Standard & Poor's 500 index and the Dow Jones industrial average are both down about 16% year-to-date, and the bears say more declines are coming.

A close look at each of the ETFs shows a small handful of stocks have driven the returns. Each is a profitable company that sells successful drugs as well as developing new products.

Genentech (DNA on the NYSE) is perhaps best-known for its Avastin cancer drug. The company drove up earnings by 13% in the first quarter to almost $900 million US.  Genentech accounts for an astounding 38.5% of the assets held in the Biotech HOLDRs ETF (unlike most ETFs, stock weightings in HOLDRS are not rebalanced over time. A basket of stocks is selected at inception – late 1999 in this case – and the holdings remain the same despite whatever swings in market cap occur over the years. Investors, if they wish, can unbundle their HOLDRs and take possession of the individual stocks.) Genentech makes up just 4% of the SPDR Biotech ETF.

Amgen (AMGN on the Nasdaq) reported $1.2 billion in first-quarter profit, down 5% from a year earlier. It accounts for 19% of the HOLDR ETF and 4.5% of the SPDR product. Amgen uses advances in DNA science to develop – and sell – drugs intended to treat cancer and several other illnesses.

And Gilead Sciences (GILD on the Nasdaq), which develops improved versions of drugs intended to fight life-threatening diseases like HIV/AIDS and hepatitis B, boosted profit by 17% to $522 million. Gilead accounts for 20% of the HOLDR assets, and 4% of the SDPR ETF.

So, driven by financial performances like that, the biotech ETFs have – comparatively speaking – flourished south of the border.

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Posted by Andrew Bell on July 14, 2008

Summer may traditionally be miserable for equity investors but Wellington West Capital Markets analysts say they’ve got some refreshing, cool ideas to get you through the sticky unpleasantness.

Their five "2008 summer top picks" are:

Agricultural and construction equipment dealer Cervus LP (CVL.UN – Venture), which runs John Deere, Bobcat, JCB and JLG dealerships across Western Canada. The company's pricing power in strong farm markets is set to lift profits and the units look poised to hit $32 in a year, up from the current $22, Wellington says.

Junior oil player Breaker Energy Ltd. (WAV.A - TSX), which has a mixed bag of assets including shallow gas lands and large oil development pools in south Alberta, light oil in west-central Alberta and shale in Saskatchewan. Wellington says Breaker is "an easy top-pick with +400 drilling locations, strong balance sheet, and history of growth … ."

Canext Energy Ltd. (CXZ – Venture), which Wellington says offers a "potentially massive" light oil pool at Clear Prairie, Alta. The company, which is focused on the Peace River Arch area of northwest Alberta, has a drilling program underway that may help triple its booked total natural gas reserves, the brokerage says.

Candente Resource Corp. (DNT – TSX), whose principal asset is the 100%-owned Cañariaco copper porphyry deposit in northern Peru. The company has "not signed concentrate offtake agreements, thus increasing Cañariaco’s appeal to Asian smelters hungry for concentrate," Wellington says.

New Gold Inc. (NGD-TSX), which just completed a merger with Metallica Resources and Peak Gold to form a new intermediate gold producer with operating assets in Mexico, Brazil and Australia and development projects in Canada and Chile. The company has "a low risk profile, no hedges and strong near-term growth prospects," Wellington says.

Wellington has been paid for investment banking and other services by all five companies in the past year and it has helped sell securities for all but Breaker in the past 12 months.

The brokerage says its 2007 summer top picks produced a return of 9.2 percent from July 11 to Dec. 31, 2007, versus a 2.4-percent decline for the S&P TSX Composite Index.

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Posted by Michael Kane on July 14, 2008

Goldman Sachs analyst Abby Joseph Cohen made a valuable observation on BNN in response to the U.S. Treasury and Federal Reserve announcement that they would backstop mortgage lenders Freddie Mac and Fannie Mae.

She pointed out that the Federal Home Loan Mortgage Corporation and Federal National Mortgage Association, as they are formally known, were not in too much danger of becoming insolvent.

Instead, the moves to bolster confidence in these two government sponsored enterprises came in response to the concerted selling of their shares, which lost about 50% of their value in just a handful of trading sessions.

It appears Treasury Secretary Henry Paulson would take heat no matter what he did. Backstopping the mortgage companies runs against the grain of free marketers, who say all mismanaged businesses should be governed by the same rules – the wages of sin is death – and be allowed to fail.

However, to let organizations as large as these collapse would likely throw gasoline on the credit market fire. And that would be irresponsible too. The precedent was set when the U.S. Federal Reserve became involved in the effort to save Bear Stearns.

Billionaire investor Jim Rogers is infuriated at the government intervention. But, had Paulson not moved quickly to calm the herd heading for the exits, the tremors from its hoof beats might be echoing for years.

As Rogers himself points out, Japan failed to deal effectively with the collapse of asset prices in the early 1990s. That resulted in what is now referred to as "The Lost Decade."

Click here to watch the interview with Abby Joseph Cohen.

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Posted by Scott Peterson on July 11, 2008

Ever wanted to strap yourself into a high-power vehicle and start burning rubber and abusing a car – legally? I got that chance recently at the BMW Advanced Driver Training Course. Me and about a dozen other drivers gathered at the Downsview Park in Toronto for a little in-class instruction from professional race car drivers.

First off they told us to hold the wheel in a 9 and 3 position – not the 10 and 2 position most of us have been taught. If you’ve ever taken a golf lesson where they break down your grip, you’ll understand how difficult that is. It changes your fundamental relationship with the vehicle. So much so the instructors tell us it takes 21 days to learn it properly.

Then they set you loose. Outside in the bright sun stood a bunch of white gleaming 3-Series BMWs – all packing 300 horses under the hood.

After practising our new steering wheel grips, and being strapped in, we were told to accelerate as fast as 70 km/h and then hit the brakes. What a rush. Talk about g-forces to the chest.

Some of my fellow students were squealing their tires into second gear. There was so much acceleration I was slamming on the brakes at almost 80 km/h. But then the instructors kick in after the smoke clears.

"We have to talk," the radio squawks on the side of the door. “How fast do you think you were going?"

And the instructors caught you each time. Barking commands into radios, they were bang on each time. They knew when we were keeping our eyes down, looking at the pylons, and not where we were supposed to be looking: the horizon – away from the pylons and the objects we were supposed to not hit.

There are other exercises like spinning yourself into a circle and trying to steer your way out of it. And, of course, the object avoidance tests where they had us steer away from flashing lights and go toward safety.

The trick here is to look away from the light. It’s counterintuitive and easy to say – but everyone tends to look at a flashing light – the flashy object you want to avoid. It hits home the point of looking toward where you want to go and not toward what you want to avoid. It's a philosophical thing. 

"You will go toward what you are looking at," instructor Kelly Williams tells us. "You have to learn how to avoid it." Which sounds like common sense, but when you’re in a real emergency – and want to avoid an object in the road – your natural inclination is to look – at a jackknifed truck or a rapidly approaching telephone pole.

You have to have discipline not to panic in a real life emergency and look toward where you want to go. This class makes you think about that stuff. Good training to have in a class rather than in the real situation.

I grew up practising my skills as a teenager in icy Ontario parking lots. While that training came in handy, I spent way more money fixing up dents on my old beaters than the almost-$500 admission price of the course.

Not only is the course cheaper, but it gives you lots to think about – in a practical and philosophical sense – for those long drives on the road.

Click here for Scott Peterson's high-speed edition of The Good Life.

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Posted by Kim Parlee on July 11, 2008

Jim Shaw has been busier than we thought.  While there had been rumours for years that Rogers was sniffing around at Shaw, turns out BCE was doing more than sniffing.  Here’s what happened today on After Hours when I asked him if any major telecom players had made a bid for his company:

KP:  I was speaking with some people, and this was a while back, and they had told me that BCE had come and talked to you.

Jim Shaw:  Yeah … umm … Yeah.  Probably yes.

KP: Probably yes?  And it wasn’t the right time?

Jim Shaw:   It just … we were at the wrong stage of value creation, I mean when the day comes when we can’t create value in the network, then maybe that is something we should consider, but until then, we have been creating good value for shareholders. If you’ve been an investor with us, you are up a lot, you get a good return, so I think most investors are pretty happy.

And later on in the interview:

KP: Last question for you, because we did talk about BCE, why specifically did you not say yes … and how long ago was that?

Jim Shaw: (laughing) It was a long time ago.

KP:  A long time ago?  In the past couple years?

Jim Shaw:  Umm. You know. Uh yeah, probably.  Um, I think that when we looked at it, the level we were trading at, Shaw would never consider anything like that, the family felt there was too much value there, we would have a problem with how they ran the company, they were quite a bit different than us, but as always, in any corporate life you have to entertain these types of things, and they come and go, and you make the decision at the time, and live with your decision.

And he looked pretty pleased with the decision. 

But, in my humble opinion, it sounds like Jim Shaw may be open to a different kind of decision if someone comes knocking again in the next few years.

Click here to see the complete interview.

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Posted by Amanda Lang on July 9, 2008

With Bell and Telus threatening to slap new, high fees on text messages, the industry minister is out, guns blazing, to the rescue.

But hold on a minute here. Isn’t this the same Jim Prentice who promised to open up the wireless market in Canada by auctioning off new spectrum – the idea being that a little competition would shake the dust of anti-consumerism off our big telcos – only to completely reverse himself a few months later?

Oh sure, there’s a spectrum auction – and, by George, it’s raising a lot of cash for the Feds – but it won't do much for competition.

For some reason, after promising a brave new world of competition and lower prices, the industry minister decided that, actually, the auction would be open only to those players who had the means to build a fully national network. All that previous talk of sharing towers and piggybacking networks? Must have misunderstood him.

So the new spectrum will indeed be auctioned, with a very high probability of it landing in the hands of some distinctly non-uspstart types: namely Bell, Rogers and Telus. Where's the new competition? Too small to make a difference.

Instead of making meaningful policy change that might have actually jump-started a new era of consumer-friendly wireless service in Canada, the minister is meddling in the rights of businesses to alienate their customers.

If he intends to do so on every occasion the incumbent players do that, he'll be a busy man indeed.

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Posted by Niall McGee on July 9, 2008

In parts of Ireland, if you look hard enough, you can still find elements of the old country: rolling countryside, locals telling yarns over pints and more sheep that you can shake a stick at. All of this you can find in my hometown of Donegal.

If you do visit, you’ll also likely smell something funny in the air, though: the waft of coal burning. But it’s not from industry. Many homes burn coal in open fireplaces, rather than wood, because A) it’s more plentiful, and B) it’s cheaper.

But it’s getting more expensive for the Irish to burn their traditional coal. Coal futures have risen 200% over the past year. The Chinese are consuming more coal than ever – 80% of their electricity is generated using coal – and there have been supply problems in the coal market.

If you want exposure to the coal market you can do so via an ETF. The Market Vectors Coal ETF trades in New York (ticker KOL on the NYSE Arca Exchange).

But coal, like any other commodity, can be a risky play. Last week coal futures dropped more than 10% as the prospect of a worsening global economic slowdown continues to raise concerns.

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Posted by David Baskin on July 8, 2008

A year ago crude oil was trading at about $76 per barrel.  Since then it has gone up through $140, and is today all the way down to $135. 

Not surprisingly, the oil and gas stocks are getting whacked.  But maybe we should be surprised.  It's not as if the main TSX energy plays ever went up as much as oil did.  Here are the prices of three big oil producers a year ago and today, compared to crude:

                              June 30/07    July 8/08       Change

Petro-Canada           $56.75          $51.03          -10%
Talisman Energy      $20.60          $19.25          -7%
Suncor Energy          $47.98          $55.31          +15%
Crude Oil (WTI)          $76               $136             +79%

It is evident that the market never really "believed" crude oil at $143; that is, it never believed that it would stay there long enough to re-value the reserves and cash flows of the major producers at that price.  In fact, the present market values of these three companies probably reflect a long term price of crude oil of about $70.

This being the case, it seems clear that the volatile day to day action in these names is more based on speculation than investment.  For an investor, the change in oil price from $120 to $145 to $135 is mostly noise.  Since the investor doesn’t really "believe" any of these prices, the daily movement does not compel any change in opinion or in portfolio composition.

It is interesting to watch, however. 

(David Baskin is president of Baskin Financial Services Inc. in Toronto)

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Posted by Scott Peterson on July 8, 2008

My credentials as a burger connoisseur are reasonably secure. I’ve spent hours in burger chains around the world doing private research. I’ve spent summers at the cottage loading up on enough burgers Friday night to last me the whole weekend. Even after all that, I still love 'em.

When the opportunity to sample Canada’s most expensive burger presented itself I jumped at the chance. What cinched the deal was that it would be prepared by one of Canada’s top chefs – Mark McEwan, the creator of both North 44 Restaurant in uptown Toronto, and Bymark Restaurant in the heart of Toronto’s financial district. It was here he came up with the Bymark Burger.

"This burger is the single most talked about food item I’ve ever created in my whole career," he said laughing from his busy downtown kitchen. "I thought the burger would be fun. I thought people would rag about the price – which they didn’t – it actually became a point of bragging. They wanted to spend the money on the burger. It became a sort of status symbol."

At $36.95 Canada’s most expensive burger has a status all its own. McEwan says most people associate a burger with a lower-end product with a lower-end price. But the Bay Street crowd gets it. And they don’t mind paying. On a good day brokerages will call down and order 20. "We had an order for 32 a couple of Fridays ago," he said, and insisted they get what they pay for. "When you consider all the ingredients – a few slices of truffle, the porcini mushroom, the Brie de Meaux – it will add up to $20. We don’t skimp anywhere. I consider the $36.95 price to be a bargain."

So what goes into it?    

It starts with 8 oz of USDA prime strip loin beef ground with about 20% of fat added. The patty is liberally dusted with kosher salt, pepper and olive oil, and grilled until medium rare. Brie de Meaux cheese is allowed to melt on the top as porcini mushrooms are fried on the side. Crisp pancetta and shaved truffles are then added and served on a plate with a stack of crisp onion rings. And the trick to any good burger: a fresh bun that has been lightly grilled.

"Just put the lid on and press the whole thing down," McEwan said, as he presented his creation with a sprig of fresh basil on the top. "And don’t be shy."

So I wasn’t. Taking a big bite I found it juicier than I was used to. Being fresh ground strip loin, it was served medium rare. The burger was nice and pink in the centre. Some of the juice dripped onto the plate.

The bitterness of the truffle mixed with a lingering sweetness of citrus complemented the raw goodness of the meat. The fresh sprig of basil and the salty brine of the pancetta also fought with each other as if designed to pull your taste buds from the sweet, to the salty, and back to the taste of the beef. It gave the impression of a whole range of taste buds firing off at the same time. It was like I had scaled the Everest of burger experiences. At that altitude calories, and the bill lurking for you, are very distant concerns.

Not for everyone, but neither is mountain climbing. For a one time thrill try the Bymark Burger. The suggested wine? A Hamelin Bay "Rampant Red" 2004 Margaret River.

Bon appetit.

Click here to watch the Bymark Burger created ... and eaten.

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Posted by Michael Kane on July 8, 2008

The first time I heard the word "Nation" ascribed to a state of mind was a few years ago when the Boston Red Sox referred to their enthusiastic fans as living within the boundaries of a patriotism usually reserved for a pledge of allegiance. It's a cute frame for sports teams.

Stephen Colbert has also used it well, signalling that he was trying to draw viewers into his comedically contrived state of mind.

The first time I did it on-air, I used the term Business News Nation as a play on BNN - with some realization that those who like business news like it a lot.

You are fans. You tune in for the scores, the strategies, the trades and the tragedies. Yeah, that's it: the thrill of victory and the agony of defeat. (Credit to ABC Sports.)

Sports and Business. Match.

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Posted by Niall McGee on July 2, 2008

Spain is a powerhouse in sports. They're European champions in soccer, and Rafa Nadal chews up opponents on the tennis court with an almost animalistic ferocity.  

But Spain doesn't come up much at BNN. Today it did: the Organization for Economic Co-operation and Development predicts Spain's unemployment will be 10.7% by the end of 2009, the highest among the OECD's 30 countries.

The Dow is flirting with bear market territory, but Madrid's IBEX 35 is already there. Spain's benchmark index lost 20.9% of its value in the first half of 2008, its worst performance since 1874.

Spain's equity and economic blues are being blamed on its collapsing housing market. In March, home prices fell 39% year-over-year. April was a bit better, only down 7%.

The Spanish economy may be in trouble, but few Spaniards will be thinking about that if Nadal wins Wimbledon this weekend. There's nothing like a sporting victory to drown the blues.

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