There's Still Time to Invest in Asia's Most Profitable Oil Company
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A Stock, Bond and Real Estate Medley That Pays $68,000 A Year..........Page 4 THE OXFORD CLUB EXECUTIVE COMMITTEE JAMES BOXLEY COOKE Honorary Chairman Baltimore, Maryland JULIA GUTH Executive Director GREAT PROFITS IN THE COMPANY OF GOOD FRIENDS Club News Edition MAY 15, 2006, VOLUME 19, NO. 9 ALEXANDER GREEN Investment Director MICHAEL WARD Editorial Director RUTH LYONS Member Recruitment Director There’s Still Time To BRIAN YORK Director of E-Commerce KRISTIN KEENEY & STEVEN KING Invest In Asia’s Most Co-Directors,World Financial Meetings & Seminars KATE MURPHY Member Services Manager THE OXFORD Profitable Oil Company INVESTMENT PANEL MARY ANNE ADEN PAMELA ADEN LOUIS BASS Dear Member, HORACIO MÁRQUEZ The stats about China’s torrid growth multiply by the day, but one in WEALTH PROTECTION particular stands out. After a decade of averaging more than 9% growth a ADVISORY PANEL ROBERT BAUMAN year, the People’s Republic hit a blistering 17% last year, blowing away all MICHAEL CHECKAN estimates. WAYNE LELAND CANADIAN But just know this… While some media outlets would like you to INVESTMENT PANEL believe China simply can’t keep growing at such a rampant pace, according Louis Bass BRENT AMEY DAVID MELNIK to the World Bank, the stage is set for another year of 9% growth or more. ERIC ROSEMAN And with the Olympics in Beijing in 2008, as my colleague Mark Skousen points out, INVESTMENT U there’s no doubt “that 1.3 billion Chinese are focused on one big goal: keeping the DR. MARK SKOUSEN Chairman & Editor economy booming.” All told, we’re in store for at least another two years of expansion ADVISORY PANELISTS according to Skousen. DR. STEVE SJUGGERUD DR.VAN K.THARP Of course, we have more than just third-party accounts of the growth in China to WAYNE ELLIS support this view. Last month, Investment Director Alex Green and Investment U Chairman Managing Director Mark Skousen led a fact-finding trip to the country. Their observations confirm what we MT. VERNON OPTIONS CLUB noted 10 months ago: KARIM RAHEMTULLA Chairman & Editor “Bumper-to-bumper traffic snakes around skyscrapers on the streets filled a decade ago ADVISORY PANELISTS with bicycles. City-dwellers blast office heating in the winter and air conditioners in the D.R. BARTON, JR. LEE LOWELL summer. Factories dot former rice fields.” STEVE MCDONALD JIM STANTON In short, China’s race for modernization is far from over. Right now, 1.3 billion people DEAN ALBRECHT are swapping bicycles for automobiles, fans for air conditioners, and washboards for ALSO IN THIS ISSUE... modern appliances. • Make Fast Gains On Penny Options ..................................5 All told, 6,800 new cars hit the streets in China every day, according to the Worldwatch • Top 37 Wealth Builders Institute. And the only thing holding back this economy is energy. for Grads..............................................6 • Oxford Portfolios ..............................7 That’s why this one company could well be the most pivotal – and profitable – in the • Oxfordian Property coming months… Exchange..........................................9 • Members’ Exchange ........................11 Over, please... PROFIT PICKS 76% Gains With Room Left to Run Just look at the recent history to get an idea of the scale. From 2000 to 2004, as worldwide demand Perhaps the best, low-risk way to tap into for oil spiked, China accounted for roughly 50% of China’s unquenchable thirst for energy is buying up the increase. And as new construction explodes and shares of Asia’s most profitable oil company: the number of cars in mainland China increases by PetroChina (NYSE: PTR). the millions each year, it’s conservatively estimated Shares have surged 76% in the past 10 months, that China will be using more than 6 million barrels and many Oxford Club members are sitting tight on of oil a day, 365 days a year. these gains. Good news to be sure. At today’s price, that is a mind-boggling $150 Yet, we’re still convinced now is the time to capi- billion worth of oil a year just to keep the country talize on the torrid expansion of the world’s fastest- running. growing major economy. Of course, someone has to supply it. And So if you passed on the opportunity (or you’re increasingly, that someone is PetroChina. The new to The Oxford Club), don’t bemoan the big move company has almost 18,000 gasoline stations. It you already missed. The steep upward trajectory you controls roughly 30% of retail gasoline sales, and its see in the chart below is likely to continue strongly. pipelines span across more than 2,500 miles of the People’s Republic. Poised to Keep Trouncing the S&P And as we all know, blow it once and you can The Oxford Club, LLC provides its members with unique chalk it up to oversight. Blow it twice and you’ll opportunities to build and protect wealth, globally, under all market conditions. The executive staff, research department never forgive yourself. Here’s the rundown on why and editors who contribute to the Club’s recommendations are proud of the reputation The Oxford Club has built since its PetroChina is headed higher… inception in 1984. We believe the advice presented to its members in our published resources and at our meetings and seminars is the best and most useful available to global investors today. The recommenda- tions and analysis presented to members is for the exclusive use of members. Copying or disseminating any of the information published by The Oxford Club, electronic or otherwise, is strictly prohibited. © 2006, The Oxford Club, LLC 105 W. Monument St., Baltimore, MD 21201 Publisher Julia Guth Research Associate Chris Matthai Investment Director Alexander Green Sr. Graphic Designer Kathy Osborne Editorial Director Michael Ward Graphic Designer Jennifer Hupfeld Managing Editor Alex Williams Advertising Director Wayne Ellis Copyeditor Jennifer Shayne Director of Brian York Member Services Mgr. Kate Murphy E-Commerce Members should be aware that investment markets have inherent risks and there can be no guarantee of future profits. Likewise, past perform- ance does not secure future results. Recommendations are subject to change at any time, and so members are encouraged to check our website www.oxfordclub.com regularly and pay special attention to the “Oxford Portfolio Review” section of the Communiqué to get the most value from our investment analysis. The publishers, editors, employees or agents are China’s Hydrocarbon Addiction not responsible for errors and/or omissions. The Oxford Club expressly forbids its writers from having a financial interest PetroChina is the largest of the three publicly in any security recommended to its readers. And all Oxford Club employees and agents must wait 24 hours after an Internet publication prior to follow- traded Chinese oil companies. And it’s involved in ing an initial recommendation, and 72 hours after publication is mailed and almost every facet of the energy business, from is only in writing. The Oxford Club does not act as a personalized investment advisor. Investments recommended in this newsletter should be made only finding oil and gas to operating refineries, chemical after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. factories, and expanding China’s largest pipeline Basic dues for membership in The Oxford Club are $149 a year. Membership includes the network. Communiqué (USPS 008-575), which is published twice monthly on the first and third weeks of each month by The Oxford Club, LLC, 105 W. Monument Street, Baltimore, MD 21201. Non-U.S. dues are higher and vary from country to country. Periodicals’ Postage Paid Providing fuel to the world’s fastest-growing at Baltimore, MD and additional mailing offices. POSTMASTER: Send address changes to The Oxford Club Communiqué, 105 W. Monument Street, Baltimore, MD 21201. For ques- economy is a big business. In fact, China is now the tions regarding the status of your membership call Member Account Services at 410.223.2643 or fax to 410.223.2650. Our website is: www.oxfordclub.com Please send any world’s third-largest consumer of oil. And it’s only investment questions or suggestions in writing to The Oxford Club Research Department, getting bigger. 105 W. Monument Street, Baltimore, MD 21201, USA. 2 PROFIT PICKS Fundamentals Even Buffett Can Love Its status as an American Depository Receipt (ADR) obviously confers certain advantages (more Aside from being well-positioned to meet the liquidity, smaller spreads, lower commissions and country’s insatiable appetite for energy, PetroChina most importantly, greater transparency). boasts plenty of other respectable fundamentals. All noteworthy enough to attract the investment of And while others will assert that the 90% stake arguably the world’s greatest investor, Warren the state stills controls is a big risk, rest assured it’s Buffett. more a blessing than a curse. And even after the company’s huge run-up, Not only did the Chinese government assign Buffett hasn’t cashed in his chips. A closer look at PetroChina the country’s choice oilfields, it also the company’s fundamentals reveals just why he’s assigned it the country’s best reserves. On top of hanging onto more than 2.3 billion shares, as that, trade barriers and other governmental regula- reported in Berkshire Hathaway’s 2005 Annual tions are allowing PetroChina to assert a dominance Report. that will be almost impossible to overcome – even if China allows foreign competition to enter the market Operating margins exceeded 30% for the past (a likely occurrence in the years ahead, as part of five years. reforms mandated by the World Trade Organization). The company carries minimal debt. Profits surged 28% last year to reach $16.6 billion.