Investing in oil and gas stocks is a cinch.

All you need is to build up some decent contacts.

Have coffee at least once a week with Saddam Hussein. Find out which way Sad’s leaning – chemical or nuclear.

This is a must. If there’s a war on Iraq, oil will spike big time, but be prepared for the inevitable crash in prices soon thereafter.

Some crack analysts in the ’patch seem to have a pipeline to Baghdad, so why not you?

Oil and gas analyst Gord Currie says his firm, Canaccord Capital, expects the threat of a war on Iraq to be resolved. The man must know something.

OK, now you’re on a first-name basis with Saddam. But you’re not quite done yet.

Quit your day job.

Now, you need to hang out with Jean Chretien. Develop a rapport with the prime minister. Take him snowboarding before he ratifies the Kyoto Protocol that has been knocking the emissions out of oilsands stocks such as Suncor Energy and Canadian Oil Sands Trust.

Find out if the PM was kidding about Kyoto. Maybe it was a joke (or maybe it IS a joke). Maybe he thinks Kyoto is a geisha girl.

Peter Linder, one of the oilpatch’s gurus, says Kyoto is a “dead issue for now.”

Easy for him to say. Linder manages the DeltaOne Energy Fund, which is stacked with natural gas companies that don’t have the Kyoto wild card hanging over them like the black cloud from the exhaust of those gas-guzzling SUVs that oil-slick CEOs wheel to work.

Of course, the recent chinook must be giving Linder a migraine. Chinooks are hell in the ’patch. Cold snaps are heaven.

So, now you need a pipeline to a decent weather forecaster.

You could put out an APB on John Pierce and get a scoop on the weather. He’s the publisher of the trusty weather forecaster, the Old Farmer’s Almanac (unfortunately, back in Saskatchewan, the farmer’s bible used to arrive after the first blizzard and we couldn’t shovel out to get to the post office ’till spring thaw).

While you’re at it, go for beers at the Petroleum Club. Rub shoulders with the gang. Work the rumour mill. Find out who’s the next royalty trust, the next takeover target.

Plant a bug in the john for that chance meeting between those Kyoto combatants, Lorne Taylor and John Manley.

But you’re not quite ready to play your hand against the stacked deck of oilpatch wild cards.

All you need to do is get inside the heads of OPEC, Osama, the Russians, Ralph Klein, the Sheiks, David Suzuki, George W. Bush . . .

Or you could skip all of that and buy shares in something bullet-proof and bomb-proof like Loblaws.

Plain old groceries never sounded so good.

* STREET TALK: Gord Currie suggests the Kyoto storm in Canada over greenhouse gas emissions that is raging like a lion may eventually go out like a lamb.

“I think once all the dust settles, it’s going to be a lot less onerous on the industry than it initially appeared,” says the Canaccord Capital analyst. “First of all, Canada has indicated it wants credits for clean energy exports, which would mean our commitment would be less than expected.

“I expect at the end of the day the targets (for greenhouse gas emissions) will be watered down to a point where they’ll be manageable. I’m not that concerned about Kyoto, but that could change.”

Currie says he believes a Kyoto ratification by Canada would hit companies with proposed oilsands projects the hardest. After that, he says, companies with existing oilsands projects and companies with deep sour gas in the Foothills would feel the greatest impact, in that order.

“Obviously, if you’re a small natural gas producer in the Medicine Hat area, the impact would be minor.”

For Currie’s top picks, see Pro’s 3 Stars column this week.

* HOW THE WEST WAS ONE: That’s how Lightyear Capital president Jason Donville headlined a recent report on Canadian Western Bank’s stunning 10-year performance against its peers in the banking sector.

Donville’s research shows that if you’d invested $1 in Edmonton-based Canadian Western Bank (CWB-TSX) a decade ago, that dollar would be worth $6.46 today.

Royal Bank (RY-TSX) was a distant second at $4.59.

“CWB was the cheapest bank stock in Canada 10 years ago in both (price/earnings ratio and price/book ratio) terms and thus was a dramatic beneficiary of multiple expansion,” says Donville.

“Over the past decade, CWB performed in line with or better than the banking sector against virtually every financial metric imaginable.”

Donville says CWB can continue to outperform based on its recent price/book ratio of 1.1 and prospective price/earnings ratio of 8.9.

“It’s cheap, conservatively financed and well managed. Ten-year bets are tough to make, but this looks like a good one.”

Lightyear has a buy recommendation on CWB with a $32 target. It recently traded at $27.

* SAGE WORDS: “Their (oil companies’) chief executives are not always as polished as their eastern counterparts, but they are men with vice-like handshakes who have usually known what it is to work long and hard in the field.”

– Author Peter Foster in The Blue-eyed Sheiks (released in 1979).



HOT ALBERTA STOCK: Oncolytics Biotech
ONC-TSX $2.18
Up 34 cents (+18.5%) on 320,000 shares (for week ending Nov. 15).
Oncolytics’ shares fell off a cliff last December, but they’re starting to show some strength, even without news on the company’s trials for Reolysin, a potential
cancer therapeutic. Even after a brisk run, shares in the Calgary-based outfit would still need to quadruple to vault its 12-month high of $9.75.



COLD ALBERTA STOCK: Zi Corp.
ZI-TSX $3.75
Down $2.39 (-41.6%) on 412,500 shares
(for week ending Nov. 15).
Shareholders slammed the cellphone on Zi shares when it appeared the company’s future may be in jeopardy. The Calgary software maker said its continuing operations depended on a resolution of a U.S. patent infringement lawsuit in a timely manner, the ability to raise capital, improved sales and turning a profit. Zi, which is appealing a lawsuit with Tegic Communications, a unit of AOL Time Warner, also announced a third-quarter loss of $20.8 million (54 cents a share) and that it is cutting 21 jobs – one-third of its staff.