StockBullz.com

Stockbullz.com Weekly Stock Newsletter #5

April 14, 2006

 

When I'm bearish and I sell a stock, each sale must be at a lower level

 than the previous sale. When I am buying, the reverse is true.

I must buy on a rising scale. I don’t buy long

stocks on a scale down, I buy on a scale up.

 

Dear Canadian Stock Investor,

I mentioned that I would tell you about another 2 possible picks but I’ve decided to outdo myself and mention 3 this week.

[April 16, update: DON'T BUY CANWEST; HERE'S WHY: LINK]

The 3 companies are Silver Quest Resources (SQI.V), Canwest Petroleum (CWPC.OB) and US Gold (USGL.OB).

Let me start with Silver Quest Resources. They are a quite new totally reorganized company looking for silver…nowhere significant yet. That’s because they don’t have a flagship property yet. I talked to investor relations yesterday and he admitted it to me. So technically, what we have here is a shell company.

But in a sense, that is good because I don’t think this shell can trade much lower (unless they don’t release news for a long time and investors start getting impatient).

However, they have just completed financing that gives them enough money to buy a very good property.

Jeff Wilson, their Investor Relations rep. is a very nice guy and he said that management has not yet decided where they want to buy this so called “flagship property”. But they are in a couple negotiations for properties in different places in the world.

Jeff hinted that they may even announce an acquisition as early as next week. If this is the case, I could see a 20-30% pop in this stock on the news because they would no longer be a shell but an emerging Silver Junior Company.

Their management is very experienced and I think they will find a good property to base the company on.

So Silver Quest is so speculative right now it is almost gambling. But if you can believe them when they say they are close to acquiring a flagship property, then they are on the verge of a very nice run to the upside.

Before I forget, Jeff mentioned that in their recent private placement, several “well known newsletter writers” participated.

So basically, if management can find a suitable property soon, that will push the stock higher. Then when these writers start mentioning Silver Quest as their new pick…I think you can see the potential for a great gamble here.

Next up is my first American idea stock. I’m talking about Canwest Petroleum. Oddly enough, this company has Canadian offices and Canadian properties yet they trade over the counter in the US. I have not yet contacted them whether or not they are planning a Canadian listing but I will soon.

What makes this company so interesting is the fact that they are a very innovative way to play the Alberta Oil Sands situation. Canwest Petroleum owns about 70% of 850,000 acres of Oil Sands claims east of the Alberta claims. Their claims hug the Alberta-Saskatchewan border.

When you consider the fact that Shell just paid about $400 million (USD) for 219,000 acres just west of Canwest’s claims, you begin to see the potential for price appreciation.

Canwest’s total market cap right now is only about 740 million (USD). Since Shell paid about $1800 (USD) per acre for their recent acquisition, we can estimate Canwest’s Saskatchewan property stake to be worth about 1.07 Billion (USD)!

So Canwest is totally undervalued. Their management is very solid. Just glance over the website and you will see what I mean.

All numbers used in my calculation were approximate but I just wanted to prove in as simple a way as possible how undervalued this company is.

Next up is a bit of a bonus pick. I’m talking about US Gold. Rob McEwan is the CEO and that is the most important thing about this company. He is working on the acquisition of 4 gold juniors that have properties beside the US Gold ones in Nevada. McEwan is betting a ton of his own money that he will hit the jackpot with these new claims all being put together. Judging by successful he was with Goldcorp, I would love to bet along side this mining master. As soon as US Gold lists on the TSX, I will be looking at buying them.

McEwan is an extremely busy man recently. I picked up on the news wires that he has recently invested heavily in two small resource companies: Everton Resources and Minera Andes. This is quite interesting to me and I will do more research on these companies. I think McEwan is a mining genius so I would love to be able to invest and make money along side him.

Ironically, both of these companies are Hard Rock Analyst picks…

The past week was quite difficult for my picks. But it was difficult for almost everything so there are no surprises. If you go back a couple weeks, you will remember that I was warning about a pull back in almost everything because of the Newspaper headlines that were saying how hot all markets are. I think we are mostly done with this little consolidation and I think we should begin climbing higher towards the end of next week.

One thing I want to mention is a little investing tip. When we fall on these little pull backs I am sure some of you are thinking about selling the stocks which have performed the best for you so far.

In our case, if you bought Silvercorp and you are sitting on 100%+ returns, you might want to sell because you see now that it has dropped a couple dollars.

Although I completely understand this point of view and get it myself sometimes, I think it is important to stick with your winners and let them fly.

When you come on slow times, you should be thinking more about unloading your losers than your winners.

You have to think that since you bought your stock, if it has gone up that means the market is telling you that you are right. If you bought a stock and it has gone down, that means the market is telling you that you are wrong and you must sell.

In my picks, the biggest laggard so far is Minco Silver. It is one of the few silver stocks that has refused to move even though Silver has been going bonkers this year.

So, in line with what I am telling you, I will look at removing Minco from the recommended list if it continues to lag for another few weeks. I am still hopeful that it will rebound because it is a solid China silver play but like I said, if it continues to lag, I will take it off.

On a side note, if you haven’t checked out my latest…(uranium, silver, gold, biotech) sites, please do. I have updated a lot of information. They are still in their infancy and I have many things to add such as insider trading, financial reports etc. Let me assure you that I will continue to keep you updated with their progress.

That’s about it for this week. Thank you for taking the time to read this and I wish you luck in your investing decisions,

Mike

P.S. Please feel free to forward this to all your investor friends. I don’t advertise but I think I provide a lot of content and research you won’t find anywhere else on the web so I need you to do me a favor and spread the word!

Stock	Date Recommended*	Price Then ($)	Price Now ($)	Return (%)
Top 2 Picks
SVM	Jan. 26, 2006	5.82	19.00	+226
NUC	Dec. 23, 2005	1.60	3.60	+125
Solid Growth
SLW	Jan. 3, 2006	6.85	12.20	+78
Speculation
MSV	Mar. 5, 2006	3.84	3.38	-12
URA	Mar. 24, 2006	0.65	0.65	+0
SQI	Apr. 14, 2006	0.59	*new	*new
Ideas
PDN	Dec. 8, 2005	1.70	4.15	+144
UUU	Dec. 22, 2005	1.93	3.33	+73
ABG	Jan. 4, 2006	1.73	3.30	+102
POE	Dec. 17, 2005	2.22	3.90	+76
American Ideas
USGL	Apr. 14, 2006	8.19	*new	*new
CWPC	Apr. 14, 2006	7.13	*new	*new

*Note: Most of these picks were recommended on my old blog first.

Disclaimer: This letter is merely someone’s opinion. It should not be taken as investment advice. Through viewing this publication or accessing our site, you agree to hold Stockbullz.com, its operators, owners and employees harmless and to completely release them from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. It’s your money, so you are ultimately responsible for any gains/losses you may incur. Do your own due diligence! Writer may own positions in some of the mentioned stocks.