The brokerage industry loves Alan Greenspan.

Greenspan belches and the market belches.

Greenspan cracks a smile and the market turns sunny.

Greenspan frowns and the market groans.

Greenspan grins and the market rockets.

And the brokers go laughing all the way to the bank with their Greenspan-induced commissions.

Reading the mind, mannerisms and word games of the 77-year-old man with a briefcase is the favourite pastime on Wall Street and Bay Street.

Of course, it’s all mostly a pointless and silly old game, and Greenspan, the U.S. Federal Reserve chairman, does a masterful job of playing right into the hands of the brokers by keeping investors perpetually strapped to that emotional roller-coaster named Greed and Fear.

When cranky Al recently hinted about a hike in interest rates in addressing the Senate banking committee, a brief selling binge instantaneously dropped the Dow Jones industrial average by 123 points.

Within two days, the Dow had recouped those losses when it appeared that an anticipated federal fund interest-rate hike from the four-decade low of one per cent would be on hold for a few more weeks or months.

Now, the jury is still out on whether interest rates are to be hiked at the next Fed meeting in June. The smart economists are out on a limb betting on a 50-50 chance of a rate increase.

So once again, Uncle Al has the economists, analysts, money managers, columnists and CNBC’s Maria Bartiromo right where he wants them: Confused and bewildered and anxious as ever.

When investors are not obsessing over the drab and dreary Greenspan, they are obsessing over the drab and dreary Dow, which is also mostly a pointless exercise unless you’re CNBC or Report On Business TV with dead air to fill.

When Greenspan furrows a brow or scratches an itch, market watchers become mesmerized by the Dow index, which has become a lousy benchmark of the stock market and the economy.

The Dow is painfully shy on true industrial stocks and heavy on fluff. It’s the hamburger, pop, sex and cigarette index with the Dow 30 including companies such as McDonalds, Coca-Cola, Pfizer (maker of Viagra) and Altria (cigarettes).

Of course, all that time wasted watching Greenspan and Dow could be better spent focusing on something more relevant, such as quarterly earnings news and doing due diligence on individual stocks.

When Greenspan finally spills the beans, you don’t want to get caught in a tidal wave of selling, especially if he shocks the market with a half- percentage point hike. In that event, while the sheep get slaughtered you could be the one laughing all the way to the bank, armed with a bullet-proof portfolio featuring a hefty wad of dough.

* RIG RATS TO RICHES: If you’re looking for a classic rags-to-riches story, you could do worse than go to school on the never-say-die attitude of Cody Slater, founder and CEO of BW Technologies, which is being acquired by British-based First Technology plc.

The Calgary gas-detection equipment manufacturer, which initially developed a gas-detection product called the Rig Rat represents one of the great success stories in Alberta history. It is being bought for $260 million at $36 per share.

Slater was a University of Alberta astrophysics major in 1987 when he developed the Rig Rat out of his tiny Edmonton apartment. Realizing its potential, the grandson of Edmonton fur entrepreneur Sheppy Slutker dropped out of school one semester shy of his degree. He moved to Calgary to live with his parents so he wouldn’t have to pay rent and maxed out his credit cards to develop the first units that were sold to Gulf Oil before finally getting a $200,000 private investment to get the business rolling.

Martin Ferguson was one of the first fund managers to discover BW, back when it was trading in the $8 range. The small-cap manager now holds more than eight per cent of the company through the Mawer Investment Management New Canada Fund and paid an average price of $14.84.

Ferguson will have his work cut out in replacing BW in his portfolio.

“Now I have to find something else with similar characteristics, but there are very few companies out there with all the attributes of BW,” says Ferguson. “My job is to identify good companies at attractive valuations. BW was extremely well run, it was gaining market share, it had a clean balance sheet, innovative products and low-cost products.”

In other words, BW was a fund manager’s dream.

* SAGE WORDS: “I can’t say I really have any fundamental regrets. I should have probably learned to play golf somewhere along the line or done something that would take a lot less work than what we do here.”

– Cody Slater, CEO of BW Technologies, Edge interview, December 6, 2000.



HOT STOCK: Microcell Communications
MT.B-TSX $31.70
Up $7.70 (+32.1%) on 7,505,300 shares (for week ending May 14).
The Canadian telecom wars heated up as Telus flexed its muscle with a $1.1-billion hostile cash takeover bid ($29 a share) for mobile phone competitor Microcell. Stock in the Montreal-based company soared 49.2 per cent on the news. Telus (T-TSX) shares remained flat on the news, losing only three cents (-0.1 per cent).



COLD STOCK: Gabriel Resources
GBU-TSX $1.65
Down 88 cents (-34.8%) on 6,665,600 shares (for week ending May 14).
When Gabriel shares were flying high in the $5 range, stockholders didn’t seem to think moving a small Romanian town was that big of a deal. Well, when the Toronto-based exploration company warned its Rosia Montana gold and silver prospects under the town of Rosia Montana would probably be delayed another year, the news triggered a panic selloff on massive volume.