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How to View the Correction (Here and in Sweden)
Thursday, May 25, 2006

So we believe that the market correction in the resources is over, but we are not sure as to when the prices will resume their upward march again. At this time we are not as much concerned about them going up as we are with getting our stakes. Much as the race has been on for uranium companies to stake the most promising lands, it is now on for the individual investors to establish stakes in the most promising stocks. We recommended sxrUraniumone when we called the recent bottom as well as an oil sands player Canwest. We stick by those picks especially as SXR pushes ahead with its Honeymoon project in Australia. Now although we added to those stakes, we also look to add to others or even acquire new stakes altogether! So long as the market flatlines, we see a buying opportunity, however no margin at this time because there are times when the market does what you least expect and what you perceived as perfect timing is dead wrong.

Sticking with energy we also see a buying opportunity in Lundin Petroleum (LUPE.ST) as it has become known to us that the Swedes are allowed to buy up to 80% on margin in their country. We believe that this is the reason (and truly the only reason) that Lundin has lost over 25% of its value in the past week. However, we take solace in knowing that only 15% of its shares outstanding belong to small investors. In other words all the recent selling has come as these guys are forced out (due to margin calls most likely) but we are now left with a much stronger foundation to build upon as more financially sound owners come aboard. Our belief is that if you are going to successfully invest in oil, you will have to buy GROWING oil companies, because it still (in some cases) allows for growth with falling prices in resources, and oil is a resource.

At this time we believe that accumulation in the soon-to-be producers is the way to play, and at the time that those stocks begin to recover is when we can once again begin to speculate in the explorers. Cameco is also looking quite interesting at these prices. We are currently working on some company profiles which has been consuming most of our time, and hope to have those up in the next couple of weeks. So keep periodically checking in to see the updates.


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