"THE VALUE INVESTOR"

Friday 2nd February, AD2007

Ultimately all markets are governed by the unchangeable laws of supply and demand. This week we briefly looked at the energy market. 
Summarizing we said, "all this is rosy news for the correctly positioned, long-term, value  investor." 

"But how do you classify a value investor?" asks one of our readers. 

The answer is simple; the savvy, 'value investor' is easy to recognize by their outlook and approach. Unlike the trader, the clever, seasoned investor looks for undervalued companies positioned in sectors with strong fundamentals. They are not so concerned with short-term market or price fluctuations, their focus is on the longer-term global outlook; what are the supply/demand fundamentals behind the sector moving forward? 

The resource and commodities sectors are unique over most other market sectors. Regardless whether its crude oil, copper, iron ore, uranium or silver; supply is finite and tangible. Demand on the other hand is locked in, global and growing. 

In these sectors, supply does not quickly expand to meet increasing demand or higher prices. Copper or uranium as an example will typically take one or more decades from their original discovery as a resource before the first pound of that commodity is ever commercially recovered 
and brought to the market. 

Through the late 1980's and 90's, global exploration of all our vital commodities fell to the lowest levels in decades. Now in the 2000's, as we are facing global booming demand growth in commodities and energy, we are only now just beginning to see the longer term supply restricting effects of low commodity exploration throughout the 90's. 

Despite short-term price fluctuations, the global effects of booming demand and relatively slower supply increases through past low exploration levels, point to higher energy and commodity prices in the medium to longer term, all good news for the value commodity investor in the decade to come. 

Sincerely - Philip Judge pjudge@anglofareast.com

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"MAKING AD 2007 A JOSEPH YEAR" 
AFE's first teleconference for 2007

A provocative discussion on the life and times of ancient Egypt's most notable Prime Minister. What made Joseph different to his 11 brothers? What made him different to all the others that served in Pharaohs court? In AD2007, what lessons can we learn from this great leader and 
administrator of the ancient world?