Don Coxe Institutional Call 11/5/10

· Fed waited until after the election to see if there was any chance that stimulus could come from Administration but that clearly now will not happen so the Fed moved knowing only stimulus would come from them.

· Said that there had been some backroom discussions in the Administration about selling some of the gold in Fort Knox to help with deficit. (Don mentioned he had himself recommended this at times to high level administration folks.) But with the recent US election. This will not happen especially with folks like Ran Paul now in a position of power. Don thinks the fact that this discussed option is now off the table had something to do with the big move in gold in the last day or so.

· Ben Bernanke gave an amazing statement about “wealth effect” wherein he expressed his belief that if consumers see stocks going higher they will spend more. He articulated his intent to move the DOW to new highs.

· Banks are using the free money from the US government to buy in their own stock….they are not using it to make loans. There is not much proof that these lower interest rates are really doing that much for the economy as it relates to businesses. E.g., IBM is using $50 million to buy back its stock but not add to capital investment, jobs, etc.

· While Don has not changed his view that the US economy will continue to struggle, that doesn’t mean that stocks won’t continue to rally. As he put it, “endless seas of liquidity may find its way into stocks.” It won’t all flow into commodities.

· While there’s been a big move already in commodities he doesn’t think that will change especially if you don’t think leaving money in the bank earning 0% is a good idea.

· Commodity inflation is spreading across the board and we are now even seeing a move up in natural gas. This is more and more looking like the 70’s with the exception that unions today won’t have the same power to move up their wages except for those in government. (e.g., in Illinois government union workers just got a 6% wage increase).

· Inflation rates around the world are increasing especially in emerging markets where they are more dependent on commodities. Investing in emerging markets will get more and more difficult as they start acting like Brazil and tax the inflows of money to try to stem it.

· There is a revival of oil sector going on with a break out. One big result of the US elections was the revival of the Alberta oil sands companies like SU. No more Henry Waxman’s and Nancy Pelosi’s to throw out Canada’s “dirty oil.” Instead the focus will now be on secure sources of oil. Investors can feel real comfortable with the Canadian oil sands companies for their oil investments. These should be a core part of your energy portfolios.

· Even though Canada has put the BHP offer on hold, Don is not convinced that whole story is yet over. There is just no company that produces anything similar to the long life reserves of POT. POT is cheap now relevant to the other agricultural stocks.

· The only asset class you can really feel confident about as having a strong earnings visibility for the upcoming year is the commodities and feels this is still selling at a discount to its real asset value. (Susan Comment – believe Don means a wide spectrum of commodities from agriculture to base metals to oil to precious metals)

· Question raised about uranium and construction of nuclear power plants in the US from a listener. Don’s response was that experts here don’t see any immediate change in construction in the US given all the environmentalists and well-funded lawyers in the US. Any change in U price will have to come from demand outside the US.