The eyes of the world may be on the cost of Grecian debt, however, Dubai probably should not have been so swiftly forgotten. The cost of insuring Dubai World’s debt against default is now back around the levels it reached last year after the Government announced its debt standstill.

The capital intensive nature of the mining industry can make for a frustrating investment experience in many cases. Positive cashflow from a successful development can disappear into expensive exploration programs before investors get their hands on it. Investors hold those miners whose operating cashflow is sufficiently strong to support a dividend in higher regard than those that don’t.

As Members may recall, we took some of our gold profits off the table late last year. We did this due to our fears of a period of underperformance from the gold miners, associated to a loss of investor enthusiasm for the metal itself. While gold’s current correction is yet to find a base, we do not expect the precious metal to breach US$1,000.

Boral’s new chief executive, Mark Selway, is understandably positive about the company’s long term potential. But he is faced with at least another half-year of heavy operating losses in the US and a commercial construction market in Australia that is going backwards.

Although we remain confident that net demand of uranium will rise significantly over coming decades the rate of increase is hard to predict. Resource focussed portfolios should rotate out of stocks with ‘toppy’ valuations into those offering better value. Given the alternatives on offer, Paladin Resources will be removed from the Fat Prophets US Portfolio.

Hold IPL and SEK

The NBN and its government progenitor are weighing on Telstra like a giant barnacle. Chief executive David Thodey is being driven to distraction by it as he seeks to conduct the Government’s due diligence on NBN Co in lieu of its own lack of a cost-benefit analysis. Telstra is also in danger of frittering away the promised benefits of its own transformation through poor customer service, pricey products and a withering fixed line legacy business.