Canadian Investment

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Canada may have a new government well before the United States has a new President. Canadian Prime Minister Harper appears to be on the way to calling and election. Some are predicting that he will win a majority.

Currently the Conservatives are a minority in Parliament. But the Canadian genius for compromise seems to have kept the country running. Nevertheless, a majority would undoubtedly make the country run better. And with a conservative government in full power, the result could be even better economic performance.

It is bizarre to think that Canada may have a majority conservative government that supports mining while the United States has a fractured government with Democrats in charge of Congress and the Presidency in the hands of Republicans. Or even stranger, all of Washington in the hands of sometime anti-business and anti-mining Democrats. It could happen.

Thus as an investor in mining, maybe you should think of doing what some (dishonorable) Americans are thinking of doing. That is go across the border to Canada for better political times. Seriously though, I cannot help but believe investing in Canadian mining stock may well be a good move.

It is true that commodity prices are "tanking." But to my way of thinking, reduced prices means better investment opportunity, particularly if the fundamentals are sound. And with Harper in majority control versus Obama in anti-NAFTA fury, I submit the Canadian fundamentals will be sound.

If you like blue chip stock, consider the four top Canadian mining groups who surely must do well regardless of how the political chips fall out in upcoming elections in both Canada and the United States. Top in revenue is Syncrude, followed by Barrick Gold, then Suncor Energy, and then Teck Cominco.

An old, old friend whose wisdom I have always admired told me over dinner the other night that he has put as much of his fabulous retirement as can be into Oil Sands. He asked me if the area is as "devastated" as press report would have it. I go frequently to Fort McMurray to consult and my opinion is based solely on my observations. Fly in from Calgary of Edmonton and you pass over never-ending stands of small trees. There is but one road to mark the presence of humans.

Drive up from the city to the mines. Of course there is development and lots of it. But as a city-lover this is exciting to me. On the mines, it looks nicer than most mines I know. The big pits are way across the river and not easy to see. The refining plants are massive, but as an engineer they look like magic castles of towers and princesses to me. The tailings impoundments are big. But we will reclaim them.

Fact is that the oil sands in Canada are like Wal-Mart in the United States. Everybody likes to tell you how bad Wal-Mart is in every way possible. But everybody goes shopping there to keep the house livable and prepare for the fancy dinner party where they deprecate Wal-Mart. Similarly, everybody likes to tell you how bad the oil sands are, but they all drive down to the gas station that has a lower price.

True oil prices may be dropping and oil sands mining getting more expensive. But there is no way either Obama or McCain are going to drill the United States to energy independence. Neither will build nuclear power plants any time soon. And there is only so much wind and sun not hindered by communities, birds, and bats. The Canadian oil sands will inevitably continue to be a major contributor to the United Stated oil "independence" drive.

So you might as well invest and go along for the ride. Cities may pass resolutions and the government may limit purchase of oil from carbon foot-print biggies. But the average person voting for McCain and for Obama will still want their car, and their right to drive to political rallies, and head for church on Sunday. And the Canadian oil sands mines will be around to provide the means wherewithal to get