22, 2002; Diversify Internationally
We think the better performance of non-U.S. energy stocks can continue.
Most have lower valuation that likely will not persist to the same
degree. Our close neighbor, Canada, offers some diversification as
the prosperity of its economy depends more on energy resources than does that of
the U.S. Recommended Canadian Oil
Sands Trust is an income stock with long life and inflation protection without
Other Canadian companies with currently positive price momentum and
attractive valuation include Petro-Canada, represented in natural gas and East
Coast oil, as well as Suncor whose oil sands plant we visited last month.
Canadian royalty trusts that also have positive momentum may have some
premium valuation relative to producers, but appear to be far better value than
high greed U.S. partnerships.
It should be easy for Americans to own European energy companies as
American investors have long been familiar with BP and Royal Dutch
and have had good experience becoming more familiar with Total.
The stocks with positive momentum currently, Norsk Hydro and ENI, are
advancing from a long established stable price base.
Our experience has been favorable with our China recommendations.
Valuation is still low.
We have not stepped up to recommending a Russian stock yet.
That day is coming closer as Russian business practices become more
predictable. Moreover the country
has always been rich in resources. Lukoil
is a leading producer.