Don Coxe Institutional Call 10/29/10

· Talks about the low price of natural gas due to huge drilling going on in US. Makes one wonder why this massive drilling is occuring. Don points out it could be due to the fact that oil companies can count their gas reserves as oil reserves (at a certain ratio). This means that their oil reserves are thus inflated. E.g., Exxon Mobil shortly after buying a natural gas company was touted as one of the only majors with growing reserves. This is totally misleading. Reserves increased not because of growth in oil reserves but counting natural gas as part of their oil reserves.

· Warmer than usual winter in North America predicted and colder than usual winter in Europe per weather forecasts. This means that natural gas prices will not get better anytime soon. Instead investors should emphasize the oil stocks as the Canadian oilsands which Coxe likes. With the election coming up this will be great news for the oilsands companies as the Dems will be out and they hated what they referred to as “the dirty oilsands.” (Henry Waxman will no longer be chairman of the Energy Committee) “The stars are in line for the reappraisal of the oilsands companies in Canada.” Foreigner investors are starting to really take a hard look at these companies. Long life reserves with political stability. Earnings of these companies are going to be very very good.

· Russia talking about importing wheat which is really unusual.

· Battle for Potash is the story of the week. This is such a long life reserve that goes out for centuries. BHP bid is dead in the water because it was predicated on the price of grains at the time they put in their bid. Its competitors have moved up significantly in price vs. Potash.

· The fundamentals for grains are tremendous. Best area right now for investing.

· At the moment gold is being supported by the global currency devaluations. Think of money printing like stocks….what would happen to the value of stocks if additional shares flooded the market? What’s happening now is even different than what happened in the ‘70’s. Gold story is sustained by people’s views that there is just too much paper money and PMs will act as a type of insurance.

· If Republicans take the house as projected there will be nothing much happening. There will not be dramatic legislation that could impact the economy one way or another. This should be good for commodity stocks as they represent real value vs stockmarket in general. (Coxe’s fund is up 14.5% ytd)

· In the US there is a major social change going on given the continuing high unemployment and the fact that after 2 years their unemployment funds are running out. Public sector jobs with pensions are now the “haves” versus private sector workers who are the “have nots.” Will result in growing tension. This will be the big story and he fears it will not be handled well. Therefore as an investor you do not want to be overweight the US in your portfolio.