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China the monster.
spot
post Posted: Dec 19 2005, 08:33 PM
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SINO STRATEGIC INTERNATIONAL LIMITED ... lol

.... well with a name like that, which gives no intimation of what economic field it is in, it sounds like a bunch of crap which is going to end badly.

now what is the best way of getting exposure to China? .... i think the answer is simple ... buying aussie resource stocks ... and for me it's as simple as buying WPL. the only other thing i watch for in this regard is how the AUD is performing. well the AUD is looking good so i don't have to worry about hedging my exposure to the AUD.

i've owned FXI on the NYSE which is laden down with some old dinasaurs ... got out of that and got exposure to Petrochina on the Hong Kong SE ... before exiting that on price weakness .... and the reason for this latter ... now get this, lol, and you thought telstra was a regulatory nightmare.. THE MAINLAND GOVT FORCED THE MAJOR REFINERS TO SELL PETROL AT A LOSS TO KEEP PRICES DOWN.

the answer to the following question is the crux of the matter ... if they could chose only one company , which aussie company would Chinese interests buy in toto if they were allowed to?

i think the answer is Woodside Petroleum ...up again today i see... go lads, play hard ball with 'em!



 
kahuna1
post Posted: Dec 19 2005, 06:14 PM
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In reply to: motorway on Monday 19/12/05 05:27pm

Bunkum ....

SSI ....

Read the announcements 27 mio shares quoted on the asx .... 35 million others ....
62 million shares at $4.10 ? and the company is worth 250 mio .... no income maybe 10 mio in cash ...

They just issued 10.5 million shares at 60 cents when the share price was $3.00

Chinese fortune cookie if I ever saw one

Eeek ....



--------------------
All views expressed are my own opinions. While I take every care when posting no guarantee to the absolute veracity of the postings is given or implied. Please do your own reseach and consult a professional investment advisor before investing.
 
motorway
post Posted: Dec 19 2005, 04:27 PM
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Suggest all interested on China check out the latest SSI announcement

Some suggest to invest upstream from a major development
Some have made a lot of money downstream

But what gets you midstream right into the Chinese economy ??

Even will earn revenue in Chinese currency...

SSI still too small a stock for many
But things I take as indicative point to SSI getting bigger..

look at to days trading... ( can We even call it profit taking or a pull back ?)

Excuse My enthusiasm ... But it has been and continues to be a stunner

Note the participants

China Telecom ???

And people talk about china plays and still this is so INVISIBLE??

motorway


Dear Sir/Madam
Re: China Entertainment Holdings' gaming and entertainment nationwide
expansion in China

The directors of Sino Strategic International Ltd ("SSI") are pleased to advise that SSI
has made substantial progress in its business plan for nationwide expansion of the
Company's welfare gaming and entertainment business in the People's Republic of
China ("PRC").
China Entertainment Holdings Ltd ("CEH"), a wholly owned subsidiary of SSI, has
entered into a sponsoring agreement ("Agreement") with Endless Idea Management Ltd
("Endless Idea") to finance the establishment of and on-going productions of the
cooperative joint venture ("JV") between Endless Idea and Shanghai VSAT Network
Systems Co. Ltd ("Shanghai VSAT") in return for revenue share with Endless Idea. The
formation of the JV is subject to the approval by appropriate authorities in Beijing based
on their assessment of the professional and financial qualification of Endless Idea.
This JV will lead to the establishment of the first specialized gaming content production
house ("Production House") in the PRC. The Production House will be a national
gaming content provider for traditional and digital channels in the PRC. These channels
are expected to have a combined audience reach of over five hundred million people.
The Agreement provides CEH with a number of national access platforms to the Chinese
market on a timely basis, on top of the traditional Points of Sale being developed. These
national platforms include IPTV, satellite TV, digital pay TV, free to air TV, mobile TV
and, Digital Multimedia Broadcasting ("DMB"). It is expected that the Production House
will establish strategic alliances with a number of major channel partners in operating
each of these platforms.
Endless Idea is a Hong Kong entertainment marketing company and content provider for
various broadcast media, (including content for TV, stage and video production). Mr.
Philip Chan, managing director and founder of Endless Idea, is the former CEO of Metro
Broadcast Limited, a major commercial radio broadcaster in Hong Kong. He was also the
General Manager of Capital Artist Limited, an artist and event management company,
and founding director of the Hong Kong listed entertainment company, Star East Group.


Shanghai VSAT is the official gaming information service provider and out-sourced
data centre of Shanghai Welfare Lottery Issuing Centre. Shanghai VSAT has secured
for the Production House the first channel partner, Chinavnet, an Internet portal
owned by China Telecom. Shanghai VSAT will act as the exclusive gaming service
provider to Chinavnet through the development of a dedicated gaming program "Sky
Long Cai" and an Internet gaming portal, www.skylc.com. The program will be
produced by the Production House and delivered to Chinavnet subscribers via China
Telecom's Internet network. It is expected that, over time, www.skylc.com will be
highly popular amongst the PRC's 100 million plus Internet users while GoConnect
Ltd's GoTrek IPTV technology would also contribute to the development of a high
quality narrowband IPTV market in China. Users of Chinavnet will soon be able to
watch gaming content as well as purchase lotto games initially, and eventually also
Keno games, via the www.skylc.com site. Shanghai China Telecom, a branch of
China Telecom and a shareholder of Shanghai VSAT, will begin to sell and distribute
prepaid betting cards, under a joint brand name between China Telecom and Sky Long
Cai, via its Shanghai retail network in early 2006. Customers in cities other than
Shanghai will also be able to use China Telecom prepaid phone cards distributed in
these cities to subscribe to online betting services on www.skylc.com. Keno and
lottery prizes can be collected from any of China Telecom's retail stores throughout
China. CEH, via Endless Idea, will be entitled to a share of the agency revenue
derived from the sale of Keno and lotto games from www.skylc.com.
The Board of SSI is pleased that CEH has made such significant progress. As
additional major content channel partners are secured for the Production House,
CEH's nationwide expansion strategy for its gaming and entertainment business will
be further consolidated. Further announcements will be made when additional partners
are secured.


 
kahuna1
post Posted: Dec 19 2005, 03:40 PM
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Hi Peter ...

I am blushing.

Not to sure about this one and open to have my opinion changed. Just see the NPV being used for say BHP and its basket of products when one looks behind the numbers we see the NPV right here which the group use is around $24- but when one looks behind the numbers for 2008 oil US$40- is the starting point ... coking coal US$85-90 ... both are 25% lower than current market.

Just not so convinced they have got it right the call for actually lower commodity prices.
Worst case was we have double or triple the level of western consumption by 2025 .... it throws all the 200 years left of iron ore out the window along with coal.

Yes I remember the Chinese thing ... they did it twice .... onc when they threatened to raise rates and slow growth down from around 10% .... back to 8%. Its I suppose an expansion on that ... still next year demand for goods is still 8% more and since the Chinese have basically got all their own resources at full tilt ... the *% more Chinese demand for some products equates to 15% or 20% of the global export market.

Gotta say we live in interesting times. For the life of me cant see this demand slowing. Sure they all say China slows ect ect .... it is not China alone there is another group excluding India which is also growing slightly slower 6.5%.

Thanks for CSM shall have a look.

Have a great christmas.





--------------------
All views expressed are my own opinions. While I take every care when posting no guarantee to the absolute veracity of the postings is given or implied. Please do your own reseach and consult a professional investment advisor before investing.
 
PeterH
post Posted: Dec 19 2005, 02:50 PM
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In reply to: kahuna1 on Monday 19/12/05 08:26am

You have put the case very well Kahuna and proved once again that you have an intellect to be reckoned with.

Remember when the 20 something journos made big of the Chinese gov'ts pronounced application of the brakes on the economy early this calendar year? Our naive market actually took notice of the juveniles who were obviously not schooled in Chinaspeak, and share prices of our minerals producers fell back.

We still keep hearing the prophets of doom warn that any downturn in the U.S. economy will lead to a drop in imports from China, leading to a sudden blow to the Chinese economy. There seems to be this misunderstanding out there that the Chinese economy depends on exports to the U.S. Yet one of the China watchers in the AFR told us that total exports to the U.S. amounts to 7% of China's GDP. Now let's get serious. If Americans are going to suddenly tighten their belts they are not going to stop buying clothes, shoes, compressors, wheelbarrows, hi-fis and everything else that they import from China altogether. At worst the rate of increse of consumption of these things will slow but absolute quantities are most unlikely to drop. In other words, it would take a massive reversal of the U.S. economy to make a significant difference to China. Nup, China mostly produces for Chinese consumption and that just has to grow beyond your and my lifetime. Anyone who can't see that just hasn't been to China. It's all a matter of proportion. Most people simply don't grasp the proportions involved. I am not saying they are stupid (despite what Barry Jones and Louis Mayer have had to say), it is simply that most people have not been exposed to proportions of this dimension before and most lack the stimulation to really think about it.

Someone asked about the best vehicle to ride the dragon. I would suggest that CSM might turn out to have the greatest scope for growth and the right degree of leverage to the future right now.

 
kahuna1
post Posted: Dec 19 2005, 08:26 AM
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In reply to: geoq on Sunday 18/12/05 05:15pm

Hi geoq...

Been thinking ... always dangerous for me ... and digging.

I agree of course with what you are saying. Higher prices = more development

Thats longer term. Gold yep exactly .... low yield deposits become economic is gold was say to double.

About coal .... I used it as the best indicator its split into roubhly 50% Thermal and 50% Coking.

So we are the worlds largest exported. We recently 2003/4 announced over virtually every company we would double production by 2009/10. We supply 30% of the export market.
That is huge.

So this price setting for 2006/7 will already take into account 75% of the 100% planned expansion in supply ... its already out there. Prices however are only 4% off their highs.
My own feeling is having the 2007 or 2008 prices 25% or 30% lower across the baord in virtually every single commodity is wrong due to this. Clearly in the case of coal it would appear to be the case.

So whats coal used for ? Thermal mainly electricity generation which is still in high demand despite the massive increases even now spells very high electricity demand over and above current levels. But for the coking side .... after checking .... sure iron ore exports have gone up this year and will too next ... there is a lag in the planned expansions and the big ones do not hit till 2008/9 because in the case of RIo ... from memory they need to expand capacity at their port handling facilities and BHP similar stuff needs to build the rail line and looking overseas same sort of stories from others.

So from the iron ore side ...maybe they are correct marking down iron ore in 2008 or 2009 but on the other side they must be wrong. The massive expansion in coking coal exports is already out there. So if there is going to be a big surge in exports of iron ore in 2008 .... and the coking coal expansion is already been used up ... the ingredient needed to turn iron ore into steel ... is of course coking coal. If one sides exports jump 30% in one year and coking coal is only globally going to go up 10% ... again we ar e back to square one ...
a shortage on one side. Both assumptions in this case of 2008 prices being down 20% I am not sure can be correct because the balance between the two are so far out of kilter.

Who knows .... oh and if iron ore/steel goes up ... stainless steel needs Nickel .... again I see a problem there with the price assumptions.

Interesting problem ... looking forward.

Yep I totally agree higher prices spur extra prodcution and develoment and exploration.

We now accept the end is near for traditional oil.

Just a curve ball here. We all believe say in the case of a lot of things iron ore/ coal we have 200 years supplies left. Some other metals much less.

This was usuing a model where the 600 million in the Western world used 80% of the resources and the remaining 3 billion used only 20%. This was 1975-80.

Now Western nations consume 75% of all commodities and have 900 million people and the remaining 5.5 billion people 25%.

The cost of living in China is much lower than the USA and to consume a similar amount if it were to keep growing at 8% might only take 20 years despite the fact per capita income would still be say 50% of the US by then.

If as we are seeing a lot of countries with populations say Brazil at 186 million and a host round the 60-80 million level did the same ... and god forbid India got its act together over the next 20 years.

What would be the overall rate of consumption of these commodities ?
China is pretty much I feel almost a done deal.
Would the rate of consumption be twice ? China does that alone .... three times ... maybe closer to four.

So things one expects have 200 years supply in fact have 50. A lot with 100 years known reserves we have only 25 years supply.

We live in a throw away society .... but economic growth is such a wonderful thing.

We have just doubled coal production or are in the process of doing it ... but it seems to be not enough even out to 2010. I suppose we double again 2010-2020. I don't see prices going to the moon in coal or anything soon .... this is a very long term view ... but the supply/demand problems which have caused spikes in prices over the last 3 years in a whole host of things at least continue for some time. Calling a sharp dropoff in virtually every commodity ... oil 2008 US$40- analyists are usuing ... coal down 30% Irnon ore 25% and so on .....

China alone I suspect will actually double global consumption of a whole host of commodites in the next 20 years.

Drinks .... hahhaha ... yep still up the road ... but doing the right thing and visiting my dear old Mum over Christmas ... leaving 21 back new year .... might catch up new year and solve the probs of the world then :}

Merry Christmas





--------------------
All views expressed are my own opinions. While I take every care when posting no guarantee to the absolute veracity of the postings is given or implied. Please do your own reseach and consult a professional investment advisor before investing.
 


geoq
post Posted: Dec 18 2005, 04:15 PM
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In reply to: kahuna1 on Sunday 18/12/05 02:46pm

Hi K,

If prices go up high enough for long enough, funds are raised or diverted to explore for it and they will find more. The ultimate amount of metal or oil is finite, but there is still a lot out there to be found.

The current oil price rise is a factor of yearly oil prices averaging between $11.91 and $28 a barrel from 1985 and 2003. In 1988 when oil was $11.91Bbl (remember the "End of Oil" story run in The Economist) exploration drilling dropping dramatically. Why explore for it at that price. Exploration is the first thing that gets cut when prices fall.

http://www.worldoil.com/MAGAZINE/MAGAZINE_...H_YEAR=Feb-2005

"Global drilling outside the US is on a torrid pace, gaining 21% since 2002. Looking back over the last 13 years to 1992 - the first year that semi-reliable data were available from the Former Soviet Union - drilling outside the US has gained roughly 50%.

Global drilling greatly outperformed our original 2004 prediction. The run-up in oil and gas prices propelled activity to a total (47,370) that was 3,150 wells more than forecast. This year, drilling outside the US will remain feverish, gaining 3.5% to 49,028 wells.

The issue for oil (and mineral) exploration is now the shortage of rigs and experienced people.

Oil and gas prices are reasonably safe for some time.

Copper - there a very large number of very large copper deposits soon to be starting production. These have moly, cobalt, gold and silver byproducts. Be careful of betting on a commodity that costs a miner nothing to producer and will be produced independent of its price. Gold is the exception and the gold price does what it likes. However the amount of gold available for the market is huge if gold prices go high enough.

Other metals are the same and a lot of $ is being spent on exploration.

K, if you still live down the road, I arrive back in Merimbula on the 21st (after a 22 hour flight). Interested in beer or 2 sometime - not on the 21st.

G

 
kahuna1
post Posted: Dec 18 2005, 02:46 PM
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Hi,

Motorway ... SSI ...
Whatever.

6 months ago SSI was a train wreck at 20 cents.
Now because its announced some Chinese gambling scheme its twenty times the price at 415. no revenue as yet ... not a cent. And u are berating me .....
It is going into an apt industry given the recent share price move. Who knows if it will suceed and all the best but buying a stock unproven ... up 20 fold ... interesting concept.
But since 90% of the stock is tied up between the top 20 and the free float is only 10% ... my my brave if any of the top 20 decide to sell. If you were long as you say and have made profits congratulations. Chasing it here ? My risk profile and 20 odd years as a full time trader prevent me most of the time from placing my hand in a spinning fan.

As to the rest ....

Onya ..

Hi Dee ...

I very much was in the same mind as the broker for a long time. Saw things falling back to normal as exapnsion in capacity already planned and some this year flowing thru would dampen things back down .... longer term I am not so sure.

The actual growth rates and changes in size of population between 1970 and 2005 more than 100% and the growth rate in one country alone ... China in terms of economic impact and demand for resources ... I have swung around the other way. Sure some like iron ore and I suppose a few others have actual structural demand outstripping supply short term and expansion already announced will fill the viod short term ... thats if things remain static. With China I don't see it that way.

I suppose how I see it is if someone per capita earns US$1,200 per annum they can afford very few luxuries in life as the 800 million rural workers in China do ... but the other side of the coin is we see 500 million new consumers with on average US$6,000 in income now demanding new TV's and mircowaves and so on. Even the poor factory worker whilst not near the average of the rich in china an income of US$2,800-3000 goes a long way.
For such a long time we have not seen such a massive growth in consumers over a short period of time and with around 30 million switching each year from very low rural incomes in China to westen consumers of everything from oil to copper .... and overall the growth adding the numbers all up we see China growing at the level of total of Australias GDP each year.

In the past 80% of raw materials were consumed by the Western nations as opposed to developing and third world. I suppose there are a 900 million population between all the well developed nations. China has reached the cusp where its consumers are demanding cars and all the rest. This is one nation. India .... is tring to catch up.
But even smaller ones we might rule out ... but between Turkey,Iran,Vietnam, Phillipines and Brazil they are growing at 6% and have half the population of China between them ...
In totality ... India +rest = China ... thats one hell of a groundswell.

Sure prices may and will dip when some short term production holes are filled but maybe 2007 ... we see this dip ... but with China at 8% year in year out ... and lets say the other crowd at around 5% .... maybe for a year maybe two ... but tis a might bug incentive to work in factory for the average Chinese person. India ... if it ever gets its act together.

Suppose some may be hit harder than others ... commodity prices .. but this assumption that prices will fall has been going on for the last few years. Aust Govt again last week oh prices have held up but we expect them to fall in 2006 ... going on coking coal wrong ... try 2007 .... small falls in prices dwarfed by output increases.

I suppose the total global growth in 2004 was on average a record. This year will not be too far behind. I am talking about new consumers being added to the market. If the US went into recession would demand fall off that much for \say oil or electricity. These are essentail goods once you have used them.

Don't know ... just a view. Personally have swung 180 degrees around thinking my god when the production increases in say the coal export and coking export market hit ... things would go in the other direction. This coming years output is going to be 20% larger than the 2005 eport market yet prices if anything given this only down 4% ... and all the time China 8% ... 8% ... 8% .... the export markets for these raw materials only normally represent a fraction of the total consumption picture. Australia with a tiny population in relation to reserves of Gold,nickel, coal, copper and so on ... is a bit of a freak since it exports most production.

Now domestic based industries in these growing countries are stretched to the limit of production capacity ... looking at coal in 2003 we exported 209 million tons of coking/thermal coal up 25% yes 25% from the previous year. We all know the price went up 2004 ... 2005 another 18% .... almost 45% increase in 2 years .... prices still high.
Now they have just negotiated the 2006/7 contracts in which the total is expected to jump another 20% ... out exports .... prices for both Thermal and coking coal in the face of this .... miles above 2003 levels and barely off the 2005 high. The increases overall will peter out 2008/9 from already announced expansions and frankly the numbers 2008/9 increases overall compares to the 2004-2007 expansions are not that large.

Australia is the worlds largest exporter of coal both thermal and coking and represents 29% of the overall export market globally. If a 45% increase doesn't slow it .... another 20% 2007, 12% in 2008 and 7% in 2009 aint going to stop it dead in the face of overall demand.

Different commodites different problems ... copper ... aluminium gold .... uranium ... nickel ... platinum is spastic ... pick one any one and all the same sort of story.

I thought maybe it was catchup but ... not so sure ... to me ... and very well could be wrong ... its a commodity scramble. This is not the old boom and bust stuff. Not driven by the same factors unless every one of the commodity based markets have gone mad at the same time from oil to gold to copper and so on. Based purely on demand ... driven by population growth and economic growth mainly from the standout nation China. With 500 million demanding a new TV every 5 years thats more than the population of the US, UK and Germany. With Just China having 800 million more in the wings waiting for a better life and 30 million switching from the rural life to the factory worker ....

It is interesting.
Not rock solid in my beliefs or opinion ... because its just an opinion but if we accept now there is a shortage of oil and the end I suppose is in sight all be it 50 years away and we must use alternatives .... demand is too high ... if I were to suggest the drivers behind the shortage given that oil is being produced at all time record levels ... record levels ...
there is a limti to every commodity. Not suggesting we are about to run out of iron ore or coal with 200 years plus supply ... but countries poor in natural resources or running out of domestic supplies need to find them somewhere.

Long term Uranium I suupose is in short supply. Gold limited. Platinum scarce .... Copper long term unsure. Coal whilst not now in shortage ... and overlooked by many can be turned into crude oil about 4 tons produces 7 barrels of synthetic crude ... whilst maket rightly ignores this in 2005 ... in 2020 I am not so sure.

China easily could double per capita income in 10 years.
India is scary with a population of 1.1 billion yet its per capita income is Half that of China ... half ....

As a percentage of GDP China exports in value roughly 25% of its total GDP ...
In comparison ... USA exports 11 %

In fact the totals are 2003 numbers ... so its a lot worse for the USA .
For Australia as a percentage of GDP in 2004 it was around 20% we exported in value.
Still due to high import levels and a blip in oil overall we are negative ... oh and the debt

This total for Australia the ratio ... 2005/6 would apprear likely to jump to 25% and when the planned NWS and gas expansions, iron ore, Uranium, everything one could think of ... come on line by 2015 ... I would be surprised it its not 40% plus ... the growth an impact of this boom is yet to be seen both on shares or balance of payments .... or the currency ... but as it hits over the next 5-10 years boy oh boy.

The point as you have raised is a good one ... but when the worlds largest coal exporter increases production over a 2-3 year period and prices still are up fully taking this into account .... it makes me wonder .... 29% of the total global export market .
2004 a 25% increase
2005 an 18% increase
2006 a 20% estimate
2007 a 12 % estimate.

The current price negotitations cover the April 2006-07 period ...
So in effect they take into account all these increases ... prices are 4% off the peak last year .... 4% ....
We have increased as the globes largest exporter of coal by a whopping 75% the size of our exports yet the price remains the same.

This is I suppose why I scratch my head at economists and analyists who even as late as yesterday call for coking coal prices to fall 25% by 2007 ... to US$90 from US$120-.
The contracts being negotiated are both for price and volume of production and in fact the cover the expansions we will see from now till the end of the first quarter 2007.

Australia's expansion has in the coal industry to a large degree happened and whilst large projects come on line 2007/8/9 as a total of the already exanded percentage of production they fall by the wayside.

All this time ... China 8% ... 8% ... 8% .

Coal is just a typical market but one that has been picked on by analyists and the Australian coal sector share prices have been slammed ... some rightly so with production problems .... but EXL .... really ... it made 95 mio last year with only 2 months of the new coking coal prices in its accounts. They were double the previous year so you can work out how low their cost of production is since they made money the year before with 12 months of awful low prices. So 2005/6 financil year ... 12 months at double prices as opposed to two. Add the fact it doubles almost coking coal production early 2006 .. with Millenium ... I am embarrassed to say almost 2006/7 financil year since the prices seem to be set around these record highs ... even i cant believe the number ... a company with a market cap of 1.25 billion ... worst case 2006/7 250 mio ... p/e 5 .... best 345 mio p/e 3.6 ... depends on the tail end prices for the 2007/8 coking/thermal contracts ..... now that the market was convinced by analyists its all a blip and lo and behold they still cry wolf .... the evindence is clearly behind the coal numbers. Sure it may taper off ... but the increases post 2007 out to 2010 in total are only 25% more .... or basically double 2003 numbers. When 75% already into account one side ... doesn't touch the sides ... another 25% over 3 years ... half the rate from the previos 4 years in the face of China 8% ... 8% .....


Sorry longwinded ... been a coal fan for a long time. Through all the ups and downs but this years classic was the 35-50% shed as the analyists competed for the Forbes prize for silliest call of the year.

Geoq ... sorry typed all this before I saw yours.
Not set in stone my thinking ... and I hear both you and dee but ... my own view and opinion has swung around in a large way in recent months.

Time will tell ... many thanks for all your thoughts.

Good luck



--------------------
All views expressed are my own opinions. While I take every care when posting no guarantee to the absolute veracity of the postings is given or implied. Please do your own reseach and consult a professional investment advisor before investing.
 
geoq
post Posted: Dec 18 2005, 02:34 PM
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In reply to: dee27 on Sunday 18/12/05 10:37am

I would agree with Hunter Hall. Having been a geo for over 30 years and also with a masters in mineral economics I have seen a number of booms and they always end in busts.

The issues are

World demand for commodities, which appears to be the China factor. This is the steady but impressive growth and I cannot see it slowing for some time. India - the amount of foreign investment is minimal - too many left wing, nationalistic governments to change things. India's growth is coming from IT and call centres, both driven by English language skills. The infrastructure of India is decades behind and not much is being done about it, but at least they have started.

Supply - how fast can supply increase to take advantage of the recent increase in demand and prices. This is the key issue and I have yet to see figures on how fast supply is gearing up to meet the need. I know that a number of very large mines currently in production are expanding and a very large number of companies owning prospects are working as fast as they can to get into production in the next year or so. In the end they will come into production and it will be an overkill as has happened every other time before and prices will fall. Each time it does fall it falls lower than previously. The long term trend for metals prices in real $ is down. All metal company investments should be considered short to medium investments only. That is unless they are unusual - a very high grade deposit, an unusually rare metal, a major supplier in the world market that can influence prices. There are few of these.

It makes sense for China to push prices up in the short term (even if unintentionally). Lots of production comes on stream and prices are pushed well down in the medum to long term. The Japanese did this by having some influencial govt dept publish a report showing that demand was going to increase by XX%, so Australian and world producers geared up and instead found that demand had changed little so that they had excess capacity which drove prices down. Japanese companies also took small equity stakes in mines. The aim of which is to gain access to data on production costs.

Oil, yes I think it is an exception. Most oil exploration is in difficult areas and takes some time and $ to find, prove and develop. With the exception of some frontier areas (HDR's Guyana ?) most of the increase in production will not make much of a ripple on international markets. It would be interesting to see, given the massive increase in oil prices and exploration, how much oil has been discovered in the past year.

World supply is 84MBls/day or 30,660MBls/year (http://www.worldoil.com/INFOCENTER/STATISTICS_DETAIL.asp?Statfile=_worldoilproduction) using data for August 2005 (Note: Summer). A major discovery at Guyana of 2,500MBls is a month's supply for the world. Ching is 1 1/2 to 2 days depending on reserves.

Coal may be another exception. I work in a coal mining area and the pollution is extreme, let alone the safety issues. Coal and gas imports are required urgently.

RE: China

I am currently in Shenyang in NE China and work further N (about 1000kms N of North Korea). Trying to get something, anything - done takes an enormous amount of time and effort. Forget schedules here, it is like trying to run in mollases.

Having seen the Russian example of political freedom but economic chaos, they are happy with the model they are using. They are spending big on infrastructure and it is extraordinary. I can stand on the prospect which is in the middle of nowhere and use my mobile phone. The very small town I am based out of has broadband. I have yet to see anyone who doesn't have a mobile. Cities have 8-10+ lane roads in the center of town - compare it with the centre of Sydney which is designed for 2 horse-drawn carrages. Look at the Sydney airport issue that has been going on for 20-30 years and a national disgrace - no one will make a decision. In China some unknown person will make a decision that a new airport is needed and it will be built and very quickly.

Re: Corruption. Nearly every 2nd day the Chinese paper has a story of some person being executed for corruption. Does it act as a deterrant? - I am not sure, but as someone said it makes sure there are no second offenders.

I have heard some horror stories about Australian companies that have worked or are working in China and there are a number of companies I would not touch. I am NOT refering to SSI which I am not familiar with.


G

 
motorway
post Posted: Dec 18 2005, 11:08 AM
  Quote Post


Posts: 511
Thanks: 14


QUOTE
SSI ... I threw them in the trash bin many years ago


You and A lot of other people

But then that is why you could buy them at .12

At all times and all places

people have had to tell themselves stories and devise rituals and myths

To remind themselves that things go in cycles

That acorns grow into oaks

That ugly ducklings are sometimes really swans
and It IS the way you look at things that matter

That the alchemical gold was found in the dung heaps

That the stone the builders rejected etc became the corner stone...

SSI at .12 had a mkt cap of $2 mill (aprox )

Yet it had a stable capital structure and management

Was able to fund itself And was listed for what is now 18 years..



Have you looked at the academic research on the returns achieved
in investing in such companies ??

I have and had ...... People are always focused on the short term
something might be a powerhouse next week
But IF Everyone's horizon is only tomorrow

There is value for the few to be find...

Ok then if you actually looked at what was happening
Nothing is static... Good companies are always moving forward
Yet there share prices can and do become static and enter trading ranges

That is just another way of saying OPPORTUNITY..


SSI now ?? Buying has conviction and urgency

If a majority of investors share your view

That means only one thing...This might be better than even I am anticipating..


Always look at the effort Vs the result..

the effort behind buying and selling and the effect that has on price..

SSI is in My opinion Number one china play

Always as been ..

It is a direct play... economy and Currency...

Kahuna...... What else are you throwing into the trash ??

There could be gold there

By definition great investments have to be ignored riduculed and avoided

Stocks at their nadir in the 1930's

By definition poor investments have to be universally bought hyped and glamorous

NASDAQ at it' peak........

That is stocks as INVESTMENT not as Business

( A good business at a too high price is a poor investment )


At the top Lot's of Volume but little result.... Churning
At the start of the boom little Volume But it starts to move price..

SSI ... that stock that still gets trash can comments

That alone would suggest.... start and not the end..

But Do your research


And anything you dismiss to the trash PLEASE tell us
opportunities like SSI are too good to miss...

motorway


 
 


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