selling RH +91% , buying SAN

We originally listed Red Hill as a buy in this blog at $0.69 on August 07 of last year when we wrote "We've done very well with Red Hill as earlier this year we made an original entry circa $0.30 before it rocketed to the $1.75 level on expectations of assay results (former symbol : UGS). We sold our holdings circa $1.40 for a gain of 366% and are now re-entering as the chart suggests it's time for another upward leg."

We then added to our position in this blog on March 14 of this year.

On May 02 of this year we sold that additional position for fast gains of 64%

We now sell our original position after the positive surge the stock enjoyed today, for a 91% gain based on the closing price of $1.30 (+45% since yesterday's close !).

We remain bullish on the company's resources, but wish to consolidate these generous gains in difficult markets, especially as we see the stock up against resistance and a need to consolidate at this level.


Also back on August 7 of last year we listed an entry on Santoy Resources at $0.41

We subsequently sold the stock just shy of its all-time highs on March 1 of this year for a 251% gain when we turned short-term bearish on the uranium sector.

The stock has since come back down to nearly our original entry level, so we now buy Santoy Resouces at $0.48 Click here for information on the company.


We remain bullish on our calls listed in the posting dated Septeber 23 2007.

Per the October 24th issue of Canada's "Globe and Mail" national newspaper

BEST BETS

A 'pretty ugly' quarter for Canadian retailers
SHIRLEY WON

FUNDS REPORTER

October 24, 2007

Hedge fund manager Brandon Osten is growing concerned about how the strong Canadian dollar will hurt the profit of domestic companies, and warns that certain sectors will feel more pain.

"I just don't know how much longer our economy can sustain a dollar that is above par [versus the U.S. greenback]," said the president of Toronto-based Venator Capital Management Ltd.

The manufacturers relying on foreign sales and resource companies - with mines or other assets outside of Canada - are being hit hard by the surging loonie, Mr. Osten said in an interview.

But "I think that the fourth quarter is also going to be pretty ugly for retailers," as Canadians buy goods like books, electronics and sporting goods from U.S. companies over the Internet, or clothing while vacationing south of the border, he predicted.

While Canadian retail stocks look inexpensive based on trailing 12-month earnings, "I don't know what the next 12 months will bring with these problems," he said.

Mr. Osten, who runs the $20-million Venator Founders Fund, is finding better opportunities in smaller-company stocks in Canada than the United States, and those that can weather a surging loonie.

"You need to be growing fast enough to blow through the problems associated with the dollar," said the former technology, special situations and health care analyst with Cormark Securities Inc. until 2005.

"We believe - and I think valuations bear it out - that the non-resource, non-financial small-cap companies in Canada are an extremely neglected sector," he said. "We like to go where the money isn't."

Mr. Osten, a value manager who looks for growth stocks with a market capitalization below $250-million, said investors need to tread carefully because the valuations of a lot of Canadian junior resource stocks and industrial companies are relatively high.

"You will not be able to throw darts at a board like the last three years," he said.

His Venator Founders Fund, which focuses on North America, garnered a 45-per-cent return for the year ended Sept. 30, and 56.2 per cent since inception in March, 2006.

His fund, which is now about 70 per cent invested in Canada and the balance in the United States, will often take short positions to hedge against potential losses in certain stocks in a market downturn.

Long:

Hammond Power Solutions Inc. (HPS.A-TSX)

The North American leader in dry-type transformers used in equipment like windmill turbines and oil industry shovels exports two-thirds of its products to the United States, but is "growing fast enough" to avoid being hurt by the rising loonie, he said. "A lot of their manufacturing growth is coming from outside of Canada in Mexico and the United States." He has a one-year target of $20 on the stock, which closed yesterday at $13.

Neo Material Technologies Inc. (NEM-TSX)

The company's neo-magnetic powders used in flat-screen televisions and newer high-end automotive electronics benefits from patent protection until 2014, Mr. Osten said. He expects it will earn 45 cents (U.S.) a share next year, but that will translate into about 42 or 43 cents (Canadian) because of the strong loonie. He has a two-year target of $9 on this stock, which closed yesterday at $4.85.

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We remain long-term gold, silver, and uranium bulls and US housing and dollar bears.



We receive no remuneration or incentive directly or indirectly in any way, shape, or form for buying or selling the stocks we do, or mentioning them in this blog. If we hold existing positions we divulge the fact, otherwise we generally buy and sell as diarized here. This blog itself is merely a diarizing of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult your broker or investment advisor before making any investing decisions.


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