Aggressive Strategy July 27, 2007:

The small capitalized companies have been hit hard this week and it will likely be a while before the appetite for risk build enough momentum to push these more aggressive companies higher.

The great liquidity cycle is fast coming to an end which will reduce the merger and acquisition activity dramatically. The premiums that have developed in a number of stocks and sectors in anticipation of takeover activity have been reduced and will be completely eliminated over the next very short while as investors come to realize that private equity firms are going to be far less willing to pay a premium price while borrowing costs are increasing.

There is a credit crunch coming in he US as lenders and bond investors tighten up their lending parameters to address the increased risks in the market. Equity investors have to go back to basics when deciding which sectors and companies to invest in. the next 18 months or so are going to be tough sluggin’ and investors are going to have to be far more nimble if they expect to see a positive return.

Many of the holdings in the Aggressive portfolio should be sold, Ur-Energy (URE) should have been stopped out on Tuesday at approximately $3.65 at a small loss, Paladin (PDN) should have been stopped out on Monday at around $7.75 for a small loss, Breakwater (BWR) should be sold at the market on Monday to hold on to the gains, Westport (WPT) should be sold at the market on Monday to hold on to the gains.

The stop on Bombardier (BBD.B) should be raised to around $5.75 to protect the gains that have accrued so far, Carmanah should be given some room so leav the stop at $1.50. Dennison should be given lots of room at the stops should be lowered to $9.50 as this is a producing company and is very profitable with uranium at the current level.

Building a large cash position at this time is prudent given the major changes that are taking place in the global credit markets, the liquidity driven bull market is coming to an end and it will take a few weeks to see where the opportunities lie. Patience will be rewarded and for the next year to year and half cash will be king again even if it is only over that short time frame.