In light of the first quarter of 2010 ending, I wish to update my 2010 economic, equity and commodity forecast (click here to see the original ) and reflect on Q1 2010, both good and bad.
Q1 2010: Review
Economic Outlook: In terms of my economic outlook I obviously did not see the Greece sovereign debt problem arising, as i was too focused on the U.S's and U.K's debt problems. Aside from that, it was rather quiet with the exception of the healthcare bill passing (which I thought had no chance of happening) and a capital controls bill being passed (which i did expect to happen but not this early) known as the HIRE bill.
Equity Outlook: I did expect a correction in the DJIA and S&P, but instead a rally has pushed it near 11,000. Although I made my fair share of errors, I did manage to make a few good calls, most notably the recent bid for Lihir Gold (LIHR) - sending the stock up nearly 30% in a day - which I first wrote about last April (click here) and most recently in my last article on March 17th (click here). One of my favorite miners, which I also previously talked (Click here) was up nearly 40% for the quarter was Red Back Mining (RBIFF.PK)[TSE:RBI). I don't mention these so I can toot my own horn as I admit I have made my fair share of bad picks among the miners in terms of Q1 performance, notably Jaguar Mining(JAG) and Coeur d’Alene mines(CDE) (respectively -18.5% and -17.3% YTD ). I only mention them because of the accurate forecasts regarding these companies with regards to the qualitative aspects. Last April I called Lihir the turnaround story of the year with a very attractive valuation attached. They not only upped production guidance both near and medium term but increased reserves. With regards to Red Back I forecasted they would dramatically increase reserves, which they did twice. I also forecasted much higher production going forward last November (click here to see the full article).
Not only did Red Back increase guidance, but the magnitude was much greater than even i predicted, with peak production levels in 2013/2014 estimated to be between 800-820k.
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