Is your Retirefund swimming in bonds? Beware the under tow, and the sharks!

Bond funds and bonds, could be real trouble! Before you know it, they'll  boil and bubble! 
The massive rush into the bond market this year could be the top of a bubble that will sink many investors who believe (wrongly) that bonds are always a safe bet when allocating your retirefunds.
On the contrary, bonds can bubble like any other investment, and that bubble is starting to become so obvious, a bust may be lurking as early as this fall.
The bond market is beginning to send out warning signs and you ignore those signs at your financial peril. Last weeks stock rally, as short as it was, came at the expense of the bond market, and in your case (retail investors) bond funds.
Anyone reading these posts knows full well my aversion (distaste, distrust and dissatisfaction) of the managed mutual fund industry,  and that, my friends, surely includes managed bond funds.  (see: Average investors getting screwed)
Those fund managers will make their outrageous fees until the exodous (which they will lead) when this market pops, and it will pop. You my friends, will be left holding the bag of worthless paper once more, unless of course, you get out now while the getting is good.
The first sign of any interest rate hikes will tip this baby elephant over the cliff.
Don't wait for that, because the big dogs will see it coming long before you do and they run a lot faster than you can.

You can thank me later this year. Meanwhile, take stock of some of the undervalued stocks starting to come alive as a fall rally becomes more and more plausable. If you don't believe the rally has legs, then you should consider these solid, dividend paying stocks for your retirefund.

HP

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Salares Lithium stock holders will double their money as Talison Lithium of Australia swallows Salares.

Image by laughlin via Flickr

News: Hertz and Enterprise to rent Nissan leaf starting in January!
This is an update for those of you who took my advice and bought Salares Lithium in early July for around .60 cents per share. While their is a current hold on trading this stock (LIT-TSX-v) it is by no means a time to worry.  It is a time to rejoice, because you have just doubled your money, at the very least.  Here's why!
About Salares Lithium Inc.
Salares Lithium Inc. is a lithium explorer in Chile that controls the 'Salares 7' lithium project made up of seven salars (brine lakes that are prospective for sub-surface lithium and potassium) and the surrounding concessions in Region III, Chile. Five of the seven salars are clustered within 155 kilometres and are 100% owned by Salares and its Chilean partner.
About Talison Minerals Pty Ltd 
Talison Minerals Pty Ltd is the leading global producer of lithium. Talison mines and processes the lithium bearing mineral spodumene at the Greenbushes Lithium Operations in Western Australia. Talison has an extensive, well established global customer network and a leading position in the growing Chinese market.(Talison produces over 65% of the current lithium being imported by China)
Talison and Salares are merging into what will be the largest pure lithium producer on the planet, and the "only pure lithium production company" to be listed on the TSX (not the venture exchange). That will occur on Sept 17th.
I have spoken with Salares CEO Todd Hilditch and company consultant, Matt Johnston who assures me that the new company (he will provide the stock symbol in the next few days) will strike somewhere between $3.50 and $4 per share when it is launched on TSX in September. At that time, Salares share holders will own 1 share of the new entity for every 2.81 shares they hold of Salares Lithium (LIT)
With a price cap between $340M and $350M, this equates to approximately 35.6 % of the new entity will be owned by current Salares shareholders which should return approx $1.25 per share, or more to those of you who took my advice 3 weeks ago.
If the TSX-v allows trading in Salares over the next few weeks, I will not part with many of my own shares. (of course I will take profit on a portion - maybe 15-20%) as I see this as a strong, bullish move for our holdings.
The new company will be the only lithium producer listed on the TSX at a time when the electric car market is gaining momentum, and new lithium ETF's are popping up on the NYSE.  

The Global X ETF will have no choice but to list the new company as the largest pure lithium supplier into China. If you invest you should do so "before" this occurs.


The combined company will have to be included in the new Lithium ETF's, as a front runner in the lithium space supplying the huge Chinese market and developing the huge Salares 7 project that Salares Lithium brings to the merger table.

When the new entity launches on Sept 17th on TSX, look for the strike price to pop. There is no way this stock will stay under $4 per share after it is launched. We think this new company will be a home run.

Your welcome folks, and here's to your retirefund.
HP

BNN interview with Salares CEO Todd Hilditch

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A new, world class, gold deposit is born!

(Update-March 5th 2010 _ Apollo gold is "in play" after latest drill results - MSN Money)

I have been high on Apollo Gold since I first bought the stock at .45 several months ago, and have been doing homework ever since. Earlier this month, I sold some APG at .51 to finance the purchase of more Wilan Technologies. I believe that these two companies have enormous upside potential in the short to medium term. That is why I bought more Wilan and bought back into Apollo Gold last week.

Apollo Gold is set to release it's latest core results from it's Grey Fox site near Timmons Ontario. This site is now tied into their already producing "Black Fox Mine" which will produce around 100,000 oz in 2010. Apollo also bought the Pike River property which connects Grey Fox and Black Fox and which has a rich history in itself.

gold analysts currently have Apollo Gold as a strong buy and I couldn't agree more. It is still trading in the .45 range per share (for now). Those analysts, and this writer believe it is better priced in the short to medium term somewhere between $2 and $3.50 and I believe this may even be too conservative.

Because of it's current production at Black Fox, and it's great core drill results at Grey Fox coupled with it's acquisition of Pike River, we believe it is a world class deposit in the infancy stage. Once the bigger dogs in the gold business get more familiar with the numbers and drill results, we think Apollo will be a takeover target in 2010. In that case, all bets are off and the target price goes straight up.

One note of caution is that Apollo hedged 30% of it's production at $867 per oz, in early 2009, however, this will not keep shoppers at bay nor should it keep you from making some money on Apollo Gold.

Previous Article: Apollo Gold

APG.T

Latest Analyst Report:

J. Taylor - The Au Report - "Apollo Gold has enormous upside potential and has one of the highest potentials for capital appreciation relative to risk involved. We think this company's Black Fox Mine, from which management expects to produce more than 100,000 ounces this year, represents the beginning of a world-class gold mining operation in the making. We say that on the basis of upside exploration potential not only on the producing Black Fox Mine but also on the basis of drill results from the Grey Fox and historical data from the Pike River Property, which Apollo recently acquired from Newmont. With Apollo currently trading at only 42% of NAV, enormous growth in earnings and cash flow starting to take place, enormous upside potential with regards to resource/reserve base and attributable production, Apollo is a perfect takeover target"!

APG.T AGT-Nasdaq

Update, Feb 17th 2010 - Great drill results at Grey Fox
Update, Mar 5th 2010 - Great drill results at Pike River

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Dilly Dollar Daze in the USA - What's next?

Image via Wikipedia

The American dollar has taken a hit against every major currency this year, and there may be more pain (or gain depending on your view) to come. From the Euro to the Yen, the greenback has taken a beating. Even the Canadian dollar and the Australian dollar have gained 25% or more on the greenback this year. $500 bucks ain't what it used to be.

Back in January, $500 usd would buy approx $625 Canadian or $375 Euros. Today that same $500 buys only $535 Canadian or $333 Euro. As Americans continue to travel abroad, they are painfully reminded of their reduced (and still reducing) purchasing power. As 2010 progresses, I believe that the non traveling U.S. public will become very aware of their reducing wealth as denominated in the greenback. Smart Americans are in this stock rally or invested in gold and other commodities, or both. Better stores of value are sought in the market every day and this trend will continue, albeit with some hiccups, as 2010 becomes even more of a watershed year for the giant U.S. economy.

The Elephant in the room is the giant and growing U.S. Debt which now exceeds $12 Trillion dollars and is growing daily, with no end in sight. It is why the dollar is still declining and will through much of 2010. 30,000 more troops for war in Afghanistan, $1 Trillion over the next 10 years for medicare, bailouts and bombshells and the list goes on, with nothing to stop the bleeding at this point. Here is the daily update on the U.S. deficit clock.

India is buying up Gold for it's foreign reserves. China is following suit. Russia is adding Canadian dollars to it's foreign reserves. Individual investors and investor groups from Beijing to Brazil are stocking up on gold and especially gold stocks. This does not bode well for the greenback, or for the standard of living in the good ole U.S. of A. At over $12 Trillion in debt (and counting) and with two unfunded wars being prosecuted on three fronts, not to mention the health care debacle, both spending cuts and new taxes are the medicine needed to stabilize this sick fiscal patient, before he goes into a coma for the next ten years.

Doctor Obama, it's time for your Uncle Sam to take his medicine and there is no sugar to sweeten the taste. Let's get on with it, before it gets any worse (unless of course, the medicine is hyper inflation over the next three years or so). If that is the diagnosis, then gold will double in the next 12 months.

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