The Rude Awakening
Wall Street, New York
Tuesday, October 24, 2006 ------------------------- - Riding commodity bulls all the way to the bank,
- Found in Vancouver and banked in Chicago – a play on
the big boys from the Windy City,
- A volcano of profit to watch out for, the companies
that may well save America and plenty more...
------------------------- Eric Fry, reporting from Laguna Beach, CA... Eric Roseman is on a roll... For the last several months, Roseman, editor of the
Commodity Trend Alert, has been urging anyone who would
listen to load up on agricultural commodities in
general...and the shares of CBOT Holdings (NYSE: BOT) in
particular. Anyone who DID listen should be extremely pleased.
Last Tuesday, corn and wheat both soared to new 10-year
highs. On the very same day, the Chicago Mercantile
Exchange (CME) offered to buy CBOT Holdings (BOT) for $8
billion dollars, creating the world's largest publicly
traded derivatives exchange. BOT jumped sharply on the
news. CBOT is the acronym for the Chicago Board Options
Exchange, a futures exchange specializing in agricultural
commodities and Treasury securities. At yesterday's closing
price of $147.70 a share, BOT trades more than 40% above
the price where Roseman recommended the stock last May. At the Agora Wealth Symposium in Vancouver last July,
Roseman reiterated his recommendations to buy BOT and
agricultural commodities. Your California editor listened
to Roseman's presentation and reported the event in the
August 3rd issue of the Rude Awakening. To read that column
in its entirety, click here: www.the-rude-awakening.com/RAissues/2006/march/RA080306.html "Buy anything that can grow wheat on it," Eric Roseman
urged the conference attendees, "Wheat is in a long-term
bull market. I'm bullish on grains. I'm bullish on
agriculture. I'm bullish on ethanol..." "The agricultural sector has been lagging most other
commodity sectors since 2001," Roseman observed. "The
metals are way up. The energies are way up. But very few of
the ags have made much of a move. That's about to change.
Declining crop yields, coupled with booming demand from
China and India will cause the grain markets to soar. And
let's not forget ethanol. This new source of demand for
corn and sugar is growing at a very rapid pace..." "Stocks like ADM should do very well," Roseman suggested. "But I like CBOT Holdings (NYSE:BOT) as a one-stop play on
the coming ag bull market. The Chicago Board of Trade
possess the largest grain-trading platform in the world. But the CBOT also trades gold and many of the other
commodity markets that are in the early stages of a bull
market. As a major kicker, the CBOT possess the world's
largest Treasury trading platform. And volumes are growing
rapidly in this market as well. "I really like CBOT stock," he concluded. "You're going to
make a lot of money buying CBOT." Fresh from his success with BOT, Roseman is turning his
attention to Nymex Holdings Inc., the latest futures
exchange to issue publicly traded stock. Nymex has not yet
launched its IPO, but Roseman has urged his subscribers to
keep an eye out for it. "Last week, Nymex Holdings Inc. members voted
overwhelmingly to take their exchange public after 132
years as a commodities bourse," Roseman wrote recently. "I
have no doubt that this will be the hottest IPO of the year
later this fall. "The corporate parent of the New York Mercantile Exchange
said more than 91% of the shares voted in connection with a
special meeting were voted in favor of pursuing an IPO.
'This shareholder approval allows Nymex to continue on its
path to an initial public offering,' the company said.
Exchange-related offerings have been on fire, playing off
rising fortunes from electronic trading as well as industry
consolidation. "The Nymex has all that going for it and more through its
role in the feverish traffic surrounding commodities
trading in energy and metals. "So far, the Nymex has yet to set an estimated price range
in the IPO and other terms of the deal. "I don't have to tell you what the potential is with NYMEX.
Take a quick look at the CME's performance since December
2003 and the CBOT – both Commodity Trend Alert open
positions. We've done extremely well with CME – up more
than 900% since my initial recommendation. "Over the last three years, Wall Street has deeply
underestimated this sector's business model. We're in a
secular bull market for derivative-exchange-traded
companies this decade, as contract volumes continue to hit
new highs. It's all about revenues. And when NYMEX hits the
market, watch out!" Roseman also harbors some very high hopes for the oil
services sector, as he explains below... --- Commodity Special ---
Once Every 32 Years For The Last 2,000 Years, One Asset Class Has Spewed Profits Like A Massive, Predictable Volcano. She's About to Blow Again... http://www.isecureonline.com/reports/CTA/ECTAGA00/ ---------------------------- Another Nice Bottom
By Eric Roseman Signs of a bottom in the energy complex are finally
arriving. Bruised and battered from a barrage of ruthless
profit-taking in September, the entire complex has been
mauled. Now it's time to buy the most profitable segment of
the energy bull market since 2002 – the oil services and
equipment stocks. After a major decline from over $77 a barrel in August,
crude oil prices recently hit a 12-month low below $57 a
barrel. But heating oil, gasoline and even hard-hit natural
gas seem to be stabilizing. The way I see it, now's the time to step back into this
bull market at fire-sale prices, especially for the
companies that drill for Black Gold. The bull market in energy has not been confined to just oil
stocks. In fact, one of the most profitable sectors in the
stock market remains in the incredibly profitable oil
services sector. The oil services sector encompasses a wide
array of oil-related duties, including installing and
servicing rigs (old and new), labor, replacement parts,
seismic testing, etc. And right now, these services are in
high demand. The good news for long-term investors is that following a
severe correction since late August, the oil services group
now trades 22% off its all-time high. Powered by several
hugely profitable companies, including Schlumberger, this
industry is about to head into overdrive as we surpass
US$100 oil over the next 12-24 months. Schlumberger is the king of oil services; it does
everything from seismic surveys to drilling for deposits to
servicing the rigs. Over the last three years, earnings at
Schlumberger have skyrocketed 476%, and are still soaring
in 2006. The company has a diversified earnings base
worldwide, including the Middle East, Latin America,
Africa, Europe, and North America. Both of its
international divisions are highly profitable, powered by
Schlumberger Oil Services and Western Geco. Every oil
services exchange-traded fund (ETF) and most energy-
dedicated mutual funds and ETFs hold major stakes in
Schlumberger. 
Oil drilling and services include several sub-sectors as
part of this highly specialized industry. The drilling
segment includes those companies that physically drill and
pump oil and gas out of the ground. Costs associated with
oil drilling are enormous – so expensive that many service-
providers in the Gulf of Mexico have fled to more lucrative
projects in the Middle East recently. The drilling industry offers a highly evolved range of
rigs, including land rigs, submersible rigs, jack-ups, and
drill ships. The infrastructure of the entire industry
requires highly labor-intensive professionals, peripheral
parts and supplies that have literally bolted to the moon
since 2003 because most raw materials have hit multi-decade
highs. Everything from steel tubing to copper has risen
significantly over the last three years, putting pressure
on lease rates and costing oil exploration companies a
fortune to find new and existing supplies, including
available labor. Although some industries have been reluctant to pass on
rising input costs to their customers, the oil services
sector has boosted daily rates on many occasions this
decade as oil prices surge and the hunt for new supply
grows. This is where it gets interesting: For every barrel of
crude oil that's recovered, 53% of that revenue goes to the
oil services companies. If any major oil company is going to explore for oil, it
needs the services sector to find that Black Gold or
natural gas. So you can bet that many companies are
struggling to find excess drilling capacity in an industry
that is barely meeting new demand. In my book, that spells
big profits for shareholders. The best way to play the secular bull market in oil
services is to purchase a diversified, low-cost, ETF. The
best ETF to achieve this objective ahead of stronger
corporate earnings over the next six months and beyond is
the iShares Dow Jones U.S. Oil Equipment ETF (IEZ-NYSE). 
From its recent May 2006 initial public offering, the
iShares Dow Jones U.S. Oil Equipment ETF now trades 23% off
its high and is loaded with superb oil equipment stocks—
especially Schlumberger (19%), Halliburton Company (10%)
and Baker Hughes (8%), to name just a few. The Top Ten
stocks in this ETF represent 66.2% of total assets. Oil equipment fundamentals are phenomenal right now. Earnings are roaring, stocks are technically in a powerful
long-term uptrend and the geopolitical landscape continues
to deteriorate, threatening current supplies. If violence
erupts in the Persian Gulf, the oil equipment stocks will
rally as existing supplies must be replaced by the large-
cap producers. It's all about supply and demand for oil at
this stage of the bull market. Any lost output due to a
conflict or attacks on major installations imply leveraged
revenue growth for a sector already boosted by record
earnings. From our perspective, the time to buy great companies in
the midst of a bull market is following a correction, not
when prices are trading at all-time highs. That's exactly
why we're buying the oil services stocks now – when prices
are almost 25% lower compared to highs achieved earlier in
May. As investors, we're always conditioned to buy a rising
trend. That's because it's easier, psychologically, to
purchase an investment when prices are rising. But
truthfully, that's not the path to big profits. I've never
made great money riding momentum or buying a major trend
at, or near, an all-time high. It takes guts to buy amid a
decline for a sector or stock, but in reality it's how this
service has made money for its members since 2001. Sometimes, we've taken hits bottom-fishing; but overall,
buying low or following a steep correction is how you plant
long-term seeds for wealth accumulation. Right now, the oil services and equipment stocks are poised
for a major recovery. With the index now almost 25% lower
since last spring, we're finally buyers. The iShares Dow
Jones U.S. Oil Equipment ETF is an excellent proxy for
diversifying in this exciting sector. I expect earnings to
remain buoyant as demand booms for rigs and labor; oil
exploration is an expensive business and I think the big
money to be made over the next few years will continue to
reside in the companies that extract oil. [Joel's Note: Whether you are a timid commodity investor or
a first timer looking to take advantage of these fire sale
prices, Eric Roseman's guidance can help you get in early
on tilting trends. Already Eric's readers are lining their
pockets with dough...and this is just the beginning. Be one
of the first Rude personnel to take advantage of this
unique service right here: Eric Roseman's Commodity Trend Alert
http://www.isecureonline.com/reports/CTA/ECTAGA01/ --- Special --- The Companies That Will Save America Buy These Saviors Now for Your Chance to See 126% Gains or
More A revolution is slowly sweeping Wall Street - offering you
a chance to become five times richer in the next two years. And the world's top advisory letter can show you how.
Discover how you can be a part of the most lucrative
investing opportunity of the decade. Follow the link below
for details. http://www.isecureonline.com/Reports/OST/EOSTGA00 ---------------------------- | 
