May 2009 Number 63

How Gold Will Top $2,000 per Ounce…

and Might Top $5,000
“The value of gold, as the only true ‘hard currency,’ is coming to the Inside This Issue
fore, as evidenced by the investment choices of some of the world’s
most seasoned investors.” My favorite oil
— AngloGold Ashanti Ltd. chief executive officer Mark Cutifani tanker stock
For the first time in a couple of decades, some of America’s most successful, big-name
investors are buying gold. David Einhorn, the hedge fund manager who predicted the Why pigs will fly
downfall of Lehman Bros., recently bought gold for the first time. And then there is by 2010
John Paulson, the guy who made billions of dollars by correctly anticipating the housing
bust and credit crisis. Paulson just plunked down $1.3 billion for an 11% stake in Drought & depression
AngloGold. He’s also got a big position in Kinross Gold. hit food supply
Peter Munk, the 82-year-old chairman and founder of Barrick Gold, also offers up
his own anecdote about gold’s broadening appeal. “I have had more phone calls in the
past six months than ever before — from people who have $120,000 inherited from
grandmother, and from hedge fund managers with millions,” he says. “I am not saying EDITOR
George Soros, but people of that caliber have told me they are buying gold.” chris mayer
You no longer have to be a gold bug to think gold will rise in price. In fact, this
buying by some of the world’s greatest investors may be the leading indicator for a quick
116% climb — to $2,000 per ounce or higher. Give gold the cold stare of a professional
handicapper and the odds look very good, indeed.
Why? The biggest reason is that the value of the dollar looks about as brittle as a
90-year-old’s hip socket. And if you worry about the value of the dollar — or any paper
currency — then gold is a good alternative.
In fact, gold has held up well while Gold Holds Up
most everything else has taken a beating 1000 180
Gold US Dollar
over the last year. On a recent conference 900
160
call with investors, First Eagle fund manager 800
Abhay Deshpande points out that gold is at 700 140
US Dollar

a new high in just about every currency 600

Gold

500 120
apart from the U.S. dollar and Japanese yen. 400
“It has performed its job for everyone in these 300
100
countries,” he says. “It has held its value.” 200 80
100
Take a look at the nearby chart and you 60
0
can see the falloff of the dollar in recent 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08

years and the rise of gold.

“But there have always been worries about the value of the dollar,” you say. “That’s
not new.” True. What is new is a global financial crisis unlike anything we’ve seen in the

WWW.AGORAFINANCIAL.com
 post-World War II era. And that crisis has brought with I have a good friend who advises institutional clients
it serious doubts — the most serious in decades — about on investing. As he reminds me, the really big money
the dollar’s ability to keep its top perch in the aviary of hasn’t started buying yet. There are no big pension funds
world currencies. As that doubt increases, gold gathers or endowments with significant gold holdings. That
new fans. could change. If so, the gold price will go wild.
As I write, the headlines are abuzz with China’s “Gold is a small market,” Munk notes. Munk’s career
proposal to replace the dollar as the world’s reserve currency. spans 60 years and he knows the gold market as well as
(The U.S. Treasury secretary, in a weak moment, said: anyone. Says he:
“We are quite open to that.” He took back those words,
Let’s say a small percentage of the world’s
but the hammer had already hit the nail.) China and
central banks — or simply the United Arab
other countries hold a lot of dollars. And they are not too
Emirates itself — do not believe President
happy to see the U.S. government handing out bills like
Obama’s pledge that he will halve the U.S.
after dinner mints. America’s $2 trillion (and ballooning)
deficit by the end of his first term. They shift
annual deficit and ballooning national debt causes them
some of their dollar reserves to gold. It would
to wonder about the value of all the paper they hold.
not take many decisions of this kind to push
They are not the only ones worried, as I noted up the price above $2,000 per ounce.
top. Many top investors are already buying gold.
That’s how gold gets to $2,000 per ounce — just a
It is easy to buy gold today with gold exchange-traded bit of doubt turning into action. The mind boggles at
funds (ETFs). They are like mutual funds that hold what would happen if China decided to hold more gold!
gold. As investors pile into these ETFs, the ETFs’ gold Gold could well hit $5,000! As long as President Obama,
holdings also go up. It’s one way to see the dramatic Fed Chief Bernanke and pals treat the dollar like confetti,
increase in demand for gold in just the last few quarters. gold should continue to gather new fans. And gold stocks
(See chart below.) should do even better.
More Investors Buying Gold Gold stocks are supposed to do
Global Gold ETF Demand and Gold Price especially well as gold rises. But that has
1,600 1545 $1,000 not been the case over the last year and a
Tonnes $950
half. Mostly, this was because mining costs
Global Gold ETF Demand (Tonnes)

1,400
Gold Price $900
1,200
1225
$850
were rising as fast as, or faster than, the price
Gold price (USD/oz.)

1139
981 $800 of gold — thanks in part to record-high
1,000
903 931 $750 energy prices. But as Deshpande points
824
800
685 683
$700 out: “These things have reversed in recent
653
600 543 552
$650 months as gold stocks became quite cheap
500 $600
relative to the underlying value of the gold
400 361 $550
223
305 304 303
$500
in the ground.”
200
74 Our play is IAMGOLD (IAG:nyse),
$450
0 which $400
has a good balance sheet and is cheap
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2004 2004 2005 2005 2005 2005 2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009
on cash flow and net asset value bases. If you
want to be more conservative and not take
So we have to ask: At $900 per ounce, are all the fears
on the risks of a single mining stock, you could just buy the
baked in or are we on some new history-making path?
GDX, which is a basket of gold mining shares. Either way,

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2 WWW.AGORAFINANCIAL.com May 2009

I recommend you get some exposure to gold stocks.
The case for gold and gold shares is a nice and clean
setup, like one of those toy houses in the window at
Macy’s on Madison Avenue. The world order will not
always hinge around the dollar. Global finance will not
always find its center on Wall Street. As Munk pointed
out: “Look around Davos this year. So Goldman Sachs
cancels its dinner party. In its place, a Kazakh company
has a dinner party.”
As the dollar goes bust, who knows what will replace
it? With gold, you don’t have to worry too much about
the answer.
My Favorite Tanker Stock
I was in New York recently for a shipping conference.
I was there mainly to see our man Nikolaos Tsakos, the
CEO of our oil tanker outfit Tsakos Energy Navigation
(TNP:nyse). I will give you an update on that position here.
Before we get into the specifics, let me take a step
back and look briefly at some longer-term trends in the oil
tanker market. There are some fascinating developments
here that bode well for tanker demand.
First, oil tankers log more miles now than ever
before. While demand for oil and refined products (like
gasoline) has grown since 2000, the seaborne miles per
ton have grown even faster. And more product is coming
from faraway places.
For instance, by 2010, global refinery capacity will
expand by 15%. About 80% of those new refineries are
in the Middle East and India. The products must travel
many miles in tankers to reach their end markets.
Against that backdrop, you still have a solid long-term
demand for oil — particularly from emerging markets.
Tsakos said that if China burned as much oil as Thailand, its
oil demand would rise by more than 120% — by 10 million
barrels per day. Global oil demand currently runs around 85
million barrels per day. No doubt this current recession — or
whatever you want to call it — is putting the pinch on oil
demand. But the long-term picture still looks strong.
Oil tanker rates, even though they have come way
down — as we’ll see below — are still healthy. Shipping
oil is also one of those necessary things, unlike costume
jewelry or hair plugs for men.
So that’s demand. We also have to look at supply,
though. If lots of oil tankers are ready to flood the market,
it will be harder to make money. This is an “industry wild
card,” as Tsakos says. Tsakos estimates a 7% net increase
May 2009 WWW.AGORAFINANCIAL.com
in the global fleet annually over the next four years. Many of
the new ships coming online will replace old single-hull ships.
But the wild card is that we don’t know how many
ships on order will actually turn into physical ships. We
can only guess at how many cancellations there might be,
how many small shippers will go bankrupt and not take
delivery, how many shipyards will go under, etc.
Potentially, this crisis could lay the groundwork for much
stronger years in tanker rates than most expect. Sentiment
right now is very negative on oil tankers.
In any case, TNP looks to weather the storm. Last year
was the best year in the history of the company. Earnings
came in at $5.33 per share! Of course, 2009 will be much
tougher. But TNP seems well put together and ought to
come through the crisis in fine shape. The business threw
off a lot of cash last year. At year-end, the company had
$312 million in cash, up 72% from 2007.
Another reason to like TNP is that the Tsakos family
owns a good chunk of stock — about 40%. As I wrote
initially — see Letter No. 56 — the Tsakos family has been
in shipping since the 19th century, when it began by shipping
lemons around the sunny rim of the Mediterranean.
In the past, the Tsakos clan has been as wise as a tree full
of owls when it comes to tankers. Since 2002 — when TNP
listed on the NYSE — investors have enjoyed a 15% annual
return. The Bloomberg Tanker Index returned just 3% and
the market returned negative 4% annually over that time.
And the Tsakos clan loves its own stock at these prices.
Last year, TNP bought 1.2 million shares at an average
price of $28.33. Buying today means you are getting shares
at about half what the Tsakos family was willing to pay.
And they are still buyers, laying their mitts on another
185,000 shares in the first quarter of 2009.
It is clear why they like their own stock so much
when you look at secondhand values for tankers and
compare them with what the stock trades for. See my
new updated net asset value (NAV) for TNP:
Tsakos’ Net Asset Value
Value Total Value
Tanker Fleet* No. (millions) (millions)
VLCC (Very Large Crude Carrier) 3 $45 $135
Suezmax 10 $65 $650
Aframax 11 $55 $605
Product 21 $40 $840
LNG 1 $200 $200
Total 46 $2,430
Plus Cash + Other Credits $485
Less Debt + Other Liabilities $1,681
Net Asset Value $1,234
NAV per share (37.9 mil o/s) $32.6
*Excludes New Builds
3
 As you can see, NAV comes in at about $33 per
share. That means it would cost you $33 per share to
assemble a fleet comparable to TNP’s. Of course, good
luck finding crews and customers, getting licenses and
insurance and all the rest.
This NAV, by the way, is well below what my NAV
estimate was in August. Then, I put NAV at $60 per
share. To see the effects of this crisis, you need look no
further than tanker rates and values.
For instance, let’s look at a Suezmax tanker — so called
because it can pass through the Suez Canal fully loaded. To
hire one, it would have set you back about $92,000 per day
in the second quarter of 2008. Today, you can hire that
tanker for $44,000 per day. If you wanted to own one, it
would’ve cost you about $100 million. Today, you can get
one for $65 million. It is a different market today — and
my updated net asset value reflects that. NAVs are normally
more stable, but last year was a wild year, and not only for
tankers, as you know.
Even so, since last August, TNP’s stock has gotten
even cheaper. The stock was only 56 cents per dollar of
NAV. Today, it is only 44 cents. That gap is still the widest
of the larger tanker stocks I follow. (See chart below.)
Cheapest of the Lot:
Price to Net Asset Value — Selected Tankers
NAT
TNK
VLCCF 98%
FRO 78%
70%
GMR
OSG 54%
TNP 44%
0% 25% 50% 75% 100%
Price to NAV
Source: FactSet; Morgan Stanley Research
A gap that large is not justified, in my view. TNP has a
relatively young fleet, averaging 6.3 years — compared
with 9.9 years for the industry. It has average debt levels for
a tanker stock, a good mix of ships on long-term contracts
and some on day rates. Already, charter rates cover 66% of
its operating days for 2009, securing much of cash flow for
the year. Finally, you have the Tsakos family in there with
you. Its strategy is to mitigate the big ups and downs of the
tanker market, and it has done that well over the years.
Tanker values ought to come back, besides. Maybe
4 WWW.AGORAFINANCIAL.com
they won’t get to the prices seen in the middle of 2008.
But for, say, an Aframax tanker, I expect to see values
back to $80 million or so this year. As a result, that $33
NAV will also increase.
Tanker stocks also pay nice dividends. TNP is no
exception. For 2008, TNP paid $1.77 per share, for a
yield of 11%. The stock has paid more than $1 per share
in each of the last four years. This is why Tsakos is part of
our Paycheck Portfolio. This year, we should get around
$1 per share.
All in all, Tsakos Energy Navigation remains my
favorite tanker stock. It is still a buy.
Why Pigs Will Fly by 2010
“This business has been profitable forever. In
fact, it’s been a very good business to be in.”
— Larry Pope, CEO, Smithfield Foods, on hog raising
In 2008, raising hogs was no longer such a good
business. But that is starting to change as the market
adjusts. You’ll want to buy a pork producer now, before
the turn is obvious to every nose on Wall Street, because
the potential for earnings-per-share growth in these
stocks on a pork rebound is huge. We’ll take a look at
one such play below…
123%
Let’s begin by looking at what happened to the
pork producers in 2008. The recession hurt demand
114%
some, though it was not the main driver. Demand for
meat is a slowly rising curve that barely moves even in
recessions. More important was the huge increase in
feed costs. The ethanol craze drove up the price of
corn, which squeezed meat producers. As a result, the
pork industry went into the red.
Anyway, these guys are not taking this lying down.
125% 150% What happens is they thin their herds. Prices temporarily
take a big dive with all these extra pigs on the market.
But prices then start to recover and the business will turn
good again. Currently, industry sources project to be back
in the black late this year or early next year. It’s a good
guess, based on the futures curves, but a guess all the
same. The key is that that the wheels are in motion and
the market looks to have hit bottom.
There is another plus — if you are an American
producer. Americans produce nearly the cheapest pork
on the planet. In fact, only the Brazilians and
Canadians are cheaper.
As you might expect, American producers are big
May 2009
 American Pork Among the Cheapest help swing the industry back in the black.
$1.20 If you want maximum leverage to pork, you buy
$1.00
Smithfield Foods. It’s about $9 per share as I write. It
looks cheap, but comes with added risk as the company
$0.80 has a good nut of debt to crack and has reported losses of
Carcass $/lb

$0.60
late. Things break right for Smithfield, though, and it
could turn into an easy four-bagger.
$0.40
If you are less pipe-dreamy and want to play it a bit
$0.20 closer to the old vest, then buy Seaboard (SEB:amex) —
which is what I recommend. Seaboard is the No. 2 hog
$0.00
producer, behind Smithfield, with 4% market share to
Canada

Brazil

United States

France

Denmark

Spain

Netherlands

Poland

Mexico

Germany

Hungary

Romania

Australia

China
Smithfield’s 18%. But Seaboard does some other things,
like trade grains and run a marine operation. So you don’t
Source: Smithfield Foods
have to be right about pork to make money with
Seaboard. Seaboard will be one of the last guys standing,
pork exporters. Even in this recession, pork exports are come what may.
still higher than in the past two years. (See nearby chart
We bought Seaboard with the full knowledge that it
“American Exports Rising Every Year.”) And exports look
would lose money on its pork business for a time until
to get even stronger. As Larry Pope talked about in the
the market adjusted. Its other businesses carried the load
last Smithfield Foods conference call:
nicely. However, the pork segment does give Seaboard
We see indigenous pork supplies of major some nice upside when things turn, as I will show you.
importing countries declining. We see pork Let’s start with the fact that Seaboard has 1.2 million
production falling in major exporting countries. shares. Say the pork division just gets back to 2007
We believe supplies of beef and chicken world- profit levels, which were less than a third of 2006’s. (See
wide are declining, as well. chart below.) That would be a swing of $85.4 million in
These are indications of good pork-exporting operating income, or $71 in earnings per share (before
opportunities opening up in the future. Pork is still the taxes). The company earned $118 per share in 2008. All
world’s most consumed meat by volume. other things being equal — and they never are, but just
for simplicity’s sake — then earnings could be $189
American Exports Rising Every Year per share, or 60% higher. That’s SEB’s leverage to
500 FY07 FY08 FY09 the pork biz.
400
million lbs

Seaboard’s Hidden Pork Surprise

300
Pork Segment
200 (Dollars in millions) 2008 2007 2006
Net Sales $1,126.0 $1,003.8 $1,002.7
100
Operating income (loss) $(45.9) $39.5 $138.3
May

June

July

August

September

October

November

December

January

February

March

April

Source: 10-K

Source: USDA
Should that happen and the stock keep its earnings
As Pope said, the big producers are cutting back. No multiple of 8 times — a rather lowly multiple, at that —
one wants to keep losing money, so you can expect to see then the stock would go for over $1,500, for a gain of
cutbacks until the industry is profitable again. Industry better than 50% from here. Longer term, the picture
data point to weekly drops of 100,000–130,000 hogs, or looks even brighter. Keep in mind that back in the middle
4–6% of supply. of 2007, the shares traded for more than $2,500.
Finally, the pork producers have lower energy costs Seaboard meets our CODE handily — It is Cheap
now — thanks to lower oil prices and transportation and has Owner-operators, good Disclosures and Excellent
costs. So all of these factors are potential tail winds to financial condition.

May 2009 WWW.AGORAFINANCIAL.com 5

 One important point about the “O” in CODE.
Steven Bresky runs Seaboard and owns 72% of it. There
is no bull in this Bresky character. He tells it straight. In
his latest letter, he continues that tradition: “Despite the
chaotic and extraordinary business climate in 2008, we
managed to post reasonable returns.” He continues:
We are fortunate to be in basic industries that
may falter but should not fail when managed
carefully and conservatively. With government
intervention around the world now a major force
in the fundamental workings of economies, we
don’t expect a turnaround to a healthier market-
driven economy for an extended period. Needless
to say, these are startling times.
Startling times, indeed. Politicians run the government
like a nightclub, making it a wild card for all. But with
Seaboard, we get a good shot at making some money in
a bad time. And we own a piece of a real business owned
and operated by a down-to-earth guy who is not going
to blow smoke up our backside. In these times, when
many high-profile CEOs are as a crooked as Virginia
fences, this latter point is as important as any promise of
potential profits.
Drought & Depression Hit
Food Supply
“[Depressions] are least felt in the staple
industries, for when hard times come, people
economize on the less-essential things. The
glove factory, the silk factory, the golf club
factory are more likely to close than the
flour mill.”
— Frank Fetter, Principles of Economics (1904)
The similarities stick out like flies on a wedding cake.
As with many things in this crisis of ours, we can look to
the 1930s. The twin forces of drought and a financial
crisis will have a big impact on the grains market and the
price of food. We’ll take a look below. But to let the dog
off its leash early, I expect a weak harvest come fall and
rising grain prices. This is good for a few investment
ideas, as you will see.
In 1933, in the pit of the Great Depression, writer
Sherwood Anderson took to America’s back roads to see
how the country was making out. He wandered into coal
towns and mill towns, farms and factories.
His account, published in 1935 as Puzzled America,
gives us a peek at Depression-era days. As the title lets on,
6 WWW.AGORAFINANCIAL.com
most Americans seemed not to know quite what to make of
the Great Depression. “Puzzled” seems just the right word.
It was puzzling because a man was prosperous and then
suddenly was not any longer. A common story in farm
country during the Great Depression began something like
this: There was a prosperous farmer with lots of land who
grew wheat. He then went into debt to buy more land and
plant more wheat. The price of wheat suddenly fell like a
shot quail. And the farm went under. Just like that, our
man was broke.
If the financial crisis didn’t take the farm, Mother
Nature did. “It was a farm until he plowed it,” Anderson
quotes one man as saying of his uncle’s place. Then the
drought came. The dry soil swirled around like snow in a
blizzard. The farm simply “blew away.”
The hot winds tore the bark right off the trees and
burned crops to ash. Fences lay buried under dust drifts.
Dust storms blackened the sky. Topsoil of thousands of
acres blew away. Anderson describes a little church in
North Dakota:
The boards of the church cracking and curl-
ing under the dry heat, the paint on the boards
frying in the hot winds… and the dust of the
fields sifting in through the cracks. Dust in the
mouths of the people as they prayed for rain.
Commodity prices took a big tumble after the crash of
1929. That’s what bankrupted the once-prosperous farmers.
Then you had fewer farmers farming. Then you also had
drought. Supply fell and prices soon rallied hard off their
bottoms. By 1937, most food commodities — corn, wheat,
sugar — were as high, or higher, than their ’29 highs.
Dust Bowl 2009
Today, we also have the dual threat of drought and
financial crisis. We have also seen commodity prices
whacked in this bust. As I write, though, these things are
all rallying off their lows — copper is up 40% since
December, oil is up 50% and the broad CRB Commodity
index is up 15% in just a few weeks. History doesn’t play
the same songs exactly, but it sure likes covers.
We have drought, as I noted earlier. Farmers across
the southern plains report poor crop conditions, thanks
to dry weather. We also have drought in many places in
the world that usually grow a lot of food.
One example: China’s Ministry of Agriculture said
that a third of its crop faces drought issues. The country’s
May 2009
“stocks to use” ratio (a measure of wheat inventory levels)
will fall below 30% for the first time since 1971. As
AgCapita, an investment fund specializing in farmland,
notes in a recent letter, China will be a net importer of
12 million metric tons of wheat. By way of comparison,
Canada’s entire annual wheat exports average around 15
million metric tons.
We also have cutbacks in supply, as farmers have a
harder time getting financing to buy seed, fertilizer and
machinery. As The Wall Street Journal reported recently:
Across the nation, farmers are making plans
to cut their production of corn, wheat, rice,
peanuts, beef, pork, poultry and milk… Also,
some farmers plan to grow just one crop on
land that normally produces two each year, and
to let some land lie fallow throughout the year.
Production of meat in every category will fall for the
first time since 1973. Meanwhile, consumption of grains
keeps rising. Globally, wheat demand should rise 6% this
year. No surprise that retail food prices rose nearly 6%
last year. I think they could rise as much this year.
The Global Scramble to
Secure Food Supplies
These conditions have set off a global scramble to
secure food supplies. I don’t think many Americans realize
this, because it hasn’t affected us much. Food is still a
small part of the family budget. And we can get all we
want of nearly anything by just sauntering over to any of a
handful of local grocery stores. But abroad, it’s a different
story. In just the last couple of days, two stories came over
the wire that caught my attention — and also make the
point. Let’s start with Qatar.
Qatar, located on the northeastern coast of the
Arabian Peninsula, has a large sovereign wealth fund —
a big pool of money that the state invests. It has about
$60 billion under its wing. Recently, it announced it
would target food and energy. “The sectors we will focus
more on,” says Hussein al-Abdullah, the director of the
fund, “are commodities, food, energy and water, because
it is an important sector and the prices will pick up.”
Qatar is not the first. Already, big sovereign wealth
funds from the UAE and Kuwait are buying up food
commodities in particular. I think that makes for a trend.
May 2009 WWW.AGORAFINANCIAL.com
Then there is the second example. South Korea
planned a project to “transform Madagascar into its
breadbasket,” the Financial Times reported. It was to take
a tract of land about half of the size of Belgium and grow
food crops. Madagascar only recently killed the deal. But
the fact that Seoul is going to such lengths to lock up food
supplies is an important signal. Again, it’s not the only
one. Lots of countries are out trying to lock up farmland.
Ultimately, we’ll have to make more food. Invest in
the ideas that help that along. Fertilizers are one such
idea. Like a prizefighter with a good chin, fertilizer demand
doesn’t stay down for long. The reasons are simple. Lower
fertilizer use means lower crop yields. Lower crop yields
tend to raise prices for food. These higher prices then
provide an incentive to plant more, so fertilizer demand
comes back.
We own PotashCorp (POT:nyse), which benefits from
these trends. It also owns more potash, a key fertilizer, than
anybody else. As Barron’s recently noted: “Longer-term
investors can take comfort in the knowledge that many
crop-planting, potash-guzzling countries — like China,
India, Brazil — all have growing economies.” And they
have growing populations as well.
There are other ways to invest too. You can buy other
ag-related businesses. You can also invest in the actual
food commodities. I’ll keep an eye on all these things for
you, but I expect good moves on this stuff in the back
half of the year after the fall harvest disappoints.
Portfolio Note
Markets move quickly these days. I sent out my buy
on Flowserve (FLS:nyse) by e-mail when it traded for
$44 per share. Before the print edition even arrived in my
mailbox, the stock hit $60 — a 36% move. If you don’t
get your weekly Capital & Crisis e-mails, send me your
e-mail address at capitalandcrisis@agorafinancial.com and
I’ll make sure you do.
As always, thanks for reading. I look forward to writing
you again soon.
Sincerely,
Chris Mayer
7
 OPEN PORTFOLIO POSITIONS
CAPITAL & CRISIS PORTFOLIO
Prices as of 04/03/09
Company/Symbol Date Rec. Current Comments Recommendation
Rec. Price Price

Brookfield Asset Management (BAM:nyse) 2/05 $16.13 $15.38 Real estate, power & more Buy*

Leucadia National (LUK:nyse) 9/05 $21.75 $16.84 World’s best distressed investors Buy*

Northwest Pipe (NWPX:nasdaq) 7/06 $25.03 $30.84 Leading water pipe company Buy up to $35*

PICO Holdings (PICO:nasdaq) 8/06 $33.98 $30.56 Water rights, land & more Buy

ABB, Ltd. (ABB:nyse) 12/06 $16.97 $15.20 Builder of the world’s power grids Buy

Canadian Natural Resources (CNQ:nyse) 2/07 $50.02 $43.73 Led by the Warren Buffett of energy Buy

Nabors Industries (NBR:nyse) 4/07 $30.34 $12.04 World’s largest land driller Buy

Loews Corp. (L:nyse) 9/07 $46.60 $23.49 Tisch family conglomerate Buy

CVR Energy (CVI:nyse) 2/08 $26.02 $5.99 Coffeyville refinery / fertilizer play Sell

Gulfport Energy Corp. (GPOR:nasdaq) 6/08 $16.29 $2.91 Davidson’s energy holding co. Buy

Astec Industries (ASTE:nasdaq) 7/08 $30.16 $27.99 Infrastructure company Buy up to $35

Seaboard Corp (SEB:amex) 9/08 $1,158 $1,011.95 Bresky’s pork, grain & shipping co. Buy

PotashCorp (POT:nyse) 12/08 $61.33 $85.71 World’s largest potash producer Buy up $70

Contango Oil & Gas (MCF:amex) 1/09 $55.61 $41.53 Peak’s cash-rich nat gas producer Buy up to $60

IAMGOLD (IAG:nyse) 2/09 $7.45 $7.98 Cheap cash-rich gold stock Buy up to $8

Flowserve (FLS:nyse) 3/09 $44.91 $63.86 Recession-resistant aftermarket sales Buy up to $63

Ensco (ESV:nyse) 3/09 $23.26 $30.08 Premier jack-up rig fleet Buy up to $33

The Paycheck PORTFOLIO

Company/Symbol Date Rec. Current Comments Recommendation
Rec. Price Price

National Fuel Gas (NFG:nyse) 6/07 $46.51 $31.78 Utility with huge land holdings Buy

Brookfield Infrastructure Partners (BIP:nyse) 1/08 $19.50 $13.63 Spinoff from BAM Buy

Atlas Pipelines (APL:nyse) 5/08 $42.40 $4.50 High-yield, Marcellus shale Buy

Tsakos Energy Navigation (TNP:nyse) 8/08 $32.86 $15.67 Tsakos family tanker business Buy

*Sold half of Brookfield Asset Management for a 113% gain; half of Leucadia for a 108% gain; and half of Northwest Pipe for a
120% gain.
Ratings System — I’ve tried to make my ratings system simple and unambiguous. The buy up to guidelines represent what I think
are the best entry points for the stock. Hold means hold if you own it, but don’t buy it if you don’t. Sell means sell.
Note: The recommended price is the closing price on the day the recommendation is available online or via e-mail.

8 WWW.AGORAFINANCIAL.com May 2009