Wednesday, June 10, 2009

Teck etc.

Unfortunately I missed a major trading opportunity in Teck Resources, which has risen from the $4 range to around $20 in the last few months. A critical financing deadline came and went. We are in odd times, when creditors seem to be unwilling to pull the plug on companies because that would mean they would have to operate them, or push them into liquidating assets at a time when no one seems to know how to value assets.

Canwest also has missed several financing deadlines, but so far is soldiering on. Obviously no one seems to want to operate newspapers now, though the company's other assets seem to be more attractive. From what I have read, though, Canwest may be quite close to the brink.

As for Teck, I would not be a buyer at the current level. Commodities are enjoying a surge at the moment, but can it last? I suspect not, since the worst of the global recession may not be behind us.

The stocks I have purchased since the meltdown last summer have not done much. Sherritt is up 30 or 40 per cent, Huntington Bancshares is under water by about 20 per cent. For the moment I am maintaining a largish cash position. As the bond markets seem to be heading down, it may soon be time to take gains if any in long US and Canadian government bonds.

One pleasant side effect of the recession is that air fares to Europe seem to be lower this summer than they have been for several years. Carpe diem, as my Latin -speaking friends would say.


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