The end of 2004 is approaching and we are writing to convey our warm holiday greetings and wishes for a happy, healthy and prosperous New Year. We are also making a few predictions. We will elaborate on these points in our next email, which should reach you in the first week of 2005.Click here to read full article...

We like the same investment themes that we have liked for 2 years.

ENERGY STOCKS

As we predicted in our November 8, 2004 letter, oil did not have a big correction and now it is rising again. We expect energy companies to do very well in coming weeks and we continue to own British and Canadian oil producers and U.S. natural gas and coal producers. Demand from developing countries like China, Russia and India and political problems worldwide argue for relatively high energy prices for some time to come. This is especially true when we consider the political problems in Iraq, Venezuela, Nigeria and possibly Iran. Finally, with world producers operating at full capacity, where will new supply come from if a major producer has political or delivery problems?Click here to read full article...

TO: Friends
WORLD MARKETS IN LIGHT OF THE U.S. ELECTION

In the aftermath of the U.S. election and President Bush’s announcement of new initiatives that he will undertake in the next four years, let us analyze the impact of the proposed initiatives and the historical events on the world markets.Click here to read full article...

 CANADA

Canada, the northern neighbor of the U.S., land of natural resources and much untrammeled beauty, is the subject of this part of our memo today. In our opinion, Canada is the best situated of all countries to benefit from the current events unfolding in the world today.Click here to read full article...

ENERGY

In the last 3 months, Guild Investment Management (GIM) has met with the CEOs and or CFOs of about 25 energy companies in Canada, Europe, Denver, New York and San Francisco, at individual meetings with company managements, and in groups at energy conferences. I returned last night from the latest conference and wanted to share our latest thoughts with you.Click here to read full article...

PUTIN TAKES CONTROL

As reported in the world media in recent days, Putin has taken control of the Russian governmental apparatus to place the levers of Russian control firmly in his hands. First, it was the move earlier this year to take over large oil company, Yukos. Last week, in what was not the only anti-democracy action taken, Putin set his sights on the eighty-nine elected regional governors, who will, henceforth, be appointed by him. To quote the New York Times, “a headline in Isvestia called it the ‘September Revolution’, equating Mr. Putin’s consolidation of power to Russia’s most famous October almost eighty-seven years ago.” As a wise friend of mine explains it, the Russian experiment with democracy is ending.Click here to read full article...

I am sending you another missive to share ideas and hopefully some salient thoughts about Iran, Iraq, gold and the dollar. I like to fool myself by thinking that these thoughts could have substantial and long lasting implications for global investment markets.Click here to read full article...

WORLD ECONOMICS

It is no surprise that oil prices have been rising for a year and four months and continue to go higher.

Higher oil prices mean less consumer cash. Less consumer cash means lower economic growth (the U.S. economy being 65% consumer spending). Lower economic growth means lower corporate profits and lower inflationary pressures. All of this leads us to predict slower economic growth and slower inflation in 2005.Click here to read full article...

The month of July was a hairy one and we escaped most of the damage, suffering only modestly due to our avoidance of the hardest-hit sectors like high tech, and especially biotech. We held a lot of short-term debt instruments, primarily British Pound Government Bonds, during the month and have recently begun to invest the sale proceeds of these into U.S. and Japanese stocks.Click here to read full article...

OVERVIEW AND ENERGY OUTLOOK

I was prompted to write to you today by a recent article on the front page of the Wall Street Journal. This article encapsulated many of the thoughts that we have been having for years about the vulnerability of the middle eastern oil sources on which the developed world is highly dependent. The article discussed a few methods to protect oil flows from terrorism, wars, and internal upheavals.Click here to read full article...