Hi everybody,

Most of us on this on topic and off topic forums are long on Cll, and so we should be. However prudence for many of us means examining what is going on around us and as a result make investment dicisions that would anticipate growth in our portfolios - after all that is why we chose Connacher.

One of the newsletters that I review on a regular basis is John Mauldin's Investors Insight. http://www.investorsinsight.com/blog...

While I do not agree with everything that he mentions, I do enjoy the independent thinking and analysis that goes into his newsletter. For example "There is now about one car in the US for every person of driving age. An article in the Financial Times estimates that an extra 1.5 million cars a year have been purchased due to cheap financiing, rebates, etc. If consumers decided they did not need more than one car, which would imply a flat growth rate, sales could drop by 3.5 million cars a year from the pre-crisis level...." Another is "Remember how I talked about how auto manufacturers had cannibalized future sales? Credit cards have allowed many retailers to do the same. Money that goes to cut down credit card debt is money not spent today.Consumers leveraged their way to higher levels of consumption, and now are going to be forced to reduce that leverage."

What does that mean to me? Well as a Canadian observing the US financial situation, there is probably a whole lot of less US $ money available to continue their rhapsody with new cars and the US gas pump. By the way I see the Canadian consummer as an exception, the numbers here are totaly different, although I do not know for how long.

A resultant comment John makes is that their is "The good news? Oil prices are likely to fall even more, which will free up some money to be used in other ways."

In other words, the whole Oil industry might have continuing downward pressure until the factors of Peak Oil as explained in Mathew Simmons October 30th presentation (thanks niceguy 8989) and OPEC's bottom $ line are put into place. As a result an increase in the cost to the consumer of the price of gasoline and to the producer in an increase in the price of oil and bitumen that is paid to the producer. The question then becomes when will this occur? My thoughts are that it will be a while yet, although you could be right and I could be wrong. Never-the-less, the sooner we can ensure that the Oil Sands producer has more than one market to sell to, the sooner that we will ensure a positive price rise in the price of oil to the producer like Connacher. The more reason that I will positvely endorse Enbridge's pipeline to Kitimat and subsequent oil deliver to the far east! With the continuing increase in China and India's car production and purchase, their is a consequence of a need to increase oil supplies. If Canada can tap into this market, irrespective of NAFTA provisions, the sooner the big boys will enjoy higher price returns and the bottom feeders like us with Connacher holdings will be able to ride along also.

Just a few thoughts that has changed my Connacher portfolio from 100% long to 60% long and 40% opportunistic trading on their shares, I still believe this is the best positioned junior oil sands producer but have to be realistic about the industry in the near turn future. Yes this is apart from the rest of my portfolio.

Just a few thoughts, comments welcomed.