Commentary

31 Jul 2008

Resource players took it on the chin during the month of July. The investor rotation (out of Energy/Materials into Financials/Technology) that began in June, accelerated during the month of July on further evidence of slowing industrial production.

31 Jul 2008

Resource players took it on the chin during the month of July. The investor rotation (out of Energy/Materials into Financials/Technology) that began in June, accelerated during the month of July on further evidence of slowing industrial production.

31 Jul 2008

Resource players took it on the chin during July. The investor rotation (out of Energy/Materials into Financials/Technology) that began in June, accelerated in July, as the energy prices hit a boiling point for the economy worldwide, and began to slide. The slide in energy carried all commodities lower. The MSCI Worldwide index is now showing the group in an official Bear Market, as it has dropped in excess of 20% from its highs of May. The Front Street Resource Hedge Fund dropped 12.16% during the month.

30 Jun 2008

Capital markets worldwide continued to unwind during the second quarter of 2008 as evidence of the credit-led financial woes spreading into the rest of the economy took hold. South of the border, the S&P500 and the Dow Jones Indices dropped 3.2% and 7.4%, respectively. Year-to-date, stocks in the U.S. (Dow Jones) are down almost 15% while their European & Asian cousins are faring much worse.

30 Jun 2008

Energy prices marched on during the month of June, undeterred by its apparent impact on the consumer and the world economy. WTI climbed another 10% during the month to close above $140/bbl and represents a whopping 40% second quarter increase. Similarly, Natural Gas prices rose up another 14% to over $13.50/mcf, rallying largely in sympathy with its crude cousin. Natural Gas inventories, however, remain well below last year’s levels, as well as the 5 year average, notwithstanding the rapid growth in U.S. onshore production.

30 Jun 2008

Energy prices marched on during the month of June, undeterred by the apparent impact on the consumer and the world economy. The WTI climbed another 10% during the month to close above $140/bbl representing a whopping 40% second quarter increase. Similarly, Natural Gas prices jumped another 14% to over $13.50/mcf, rallying largely in sympathy with its crude cousin. Natural Gas inventories, however, remain well below last year’s levels, as well as the 5-year average, notwithstanding the rapid growth in U.S. onshore production.

30 Jun 2008

The second quarter was a humbling time for global stock exchanges with dramatic pullbacks including China, which was down over 40% in the first half. The U.S. economy has struggled as the impact of high energy prices, the burden of financing the war in Iraq, and a collapsing housing market have weighed on the economy. We are also experiencing a global financial crisis as bank after bank announces write-downs of bad loans brought upon them by their own risky lending practices.

30 Jun 2008

Energy prices marched on during the month of June, undeterred by the apparent impact on the consumer and the world economy. The WTI climbed another 10% during the month to close above $140/bbl representing a whopping 40% second quarter increase. Similarly, Natural Gas prices jumped another 14% to over $13.50/mcf, rallying largely in sympathy with its crude cousin. Natural Gas inventories, however, remain well below last year’s levels, as well as the 5-year average, notwithstanding the rapid growth in U.S. onshore production.

31 May 2008

The Canadian market outperformed its international peers in May as Energy and Materials’ share prices climbed. Rising confidence that the U.S. economic woes would not spread to the bigger economy worldwide supported the resource complex.

31 May 2008

With the bottom of the Credit Crisis panic seemingly hit in mid-March (the Bear Sterns rescue being the symbolic low-point), global capital markets are now operating in a fashion that we consider to be ‘nearly normal’. While the economic and corporate news remains mixed, markets are functional, assets are being revalued and if necessary disposed of (albeit typically at sharp discounts) and investor psychology has steadily improved.

31 May 2008

If you sold near the start of May and went away, you missed a milestone in the Canadian market. The S&P/TSX barreled through 15,000 and hit a new all-time high in the month (May 21), which at that level was up 26% from the 52-week low on Jan 22. To date, the market is only up about 6%. On the month, the main index increased 5.58%, while most national indexes worldwide substantially underperformed – Japan, Mexico and Brazil were some exceptions. (DOW -1.42%, S&P +1.07%, NASDAQ +0.46%)

Pages

Read commentary/video/audio disclaimer

Disclaimer:

The opinions expressed herein reflect those of the individual portfolio manager. These opinions are subject to change at any time based on market or other conditions, and Front Street Capital disclaims any responsibility to update such views. These opinions may differ from those of other portfolio managers or of Front Street Capital as a whole.

These views are for informational purposes only and are not intended to be a forecast of future events, a guarantee of future results or investment advice. All data referenced herein are from sources deemed to be reliable but cannot be guaranteed.

These views may not be relied upon as investment advice and, because investment decisions are based on numerous factors, may not be relied upon as an indication of trading intent on behalf of Front Street Capital. Any discussion of any of the funds’ holdings are as of the podcast interview date, and are subject to change.

If specific securities are referenced, they have been selected by the portfolio manager on an objective basis to illustrate the views expressed herein. Such references do not include all material information about such securities, including risks, and are not intended to be recommendations to take any action with respect to such securities. Referenced securities may not be representative of the portfolio manager's current or future investments and are subject to change at any time.