A letter of gratitude to comrade Bakhytzhan Sagintayev in the former Soviet Republic of Kazakhstan . . .

Dear Bakhy,

I am writing to thank you on behalf of my cousin Boris in Calgary who made a killing on the stock market this week when you dropped that firecracker in the lap of PetroKazakhstan CEO Bernard Isautier.

As I’m sure you’re aware, as deputy chairman of the Kazakhstan Agency for Regulating Natural Monopolies, PetroKazakhstan is a publicly traded company in Canada (its phone number in Calgary is 403-221-8272 in case you decide to call them next time you’re looking for cash, but no worries – Boris says go ahead and use the mail).

When you gave Interfax news service the scoop on October 1 in the midst of the trading day that you were fining PetroKazakhstan $6.3 million US for allegedly collecting “monopoly profit,” Boris was promptly tipped off by his computer (a modern gadget used for communications and created for folks who wish to play the stock market in their jammies).

Boris may actually have known about the news even before Mr. Isautier.

In his due diligence, Boris discovered that $6.3 million US is pocket change to PetroKazakhstan, roughly the equivalent of a Bernard Isautier tip at Le Clos Long Champs bistro in Paris and about 1/11th of Petro- Kazakhstan’s profits in the second quarter.

So he decided to get in on the action with a contrarian play. While there was panic in the streets and brokers were bolting from the Chophouse mid-lunch hour to their computers, Boris determined that the shares in the company formerly known as Hurricane Hydrocarbons were being unfairly penalized and were cheap like borscht (although not as cheap as four years ago when the shares traded at 30 cents).

So, with the stock beaten down, cousin Boris submitted an online market buy order for PKN-TSX shares. His order filled at $21, $7 below the price at the time the panic selling started.

By the time PetroKazakhstan calmed the masses by issuing its side of the story the following day, stating it deemed your actions unjustified and thought your math for the claim may be in error by about $6 million US (okay, $5.6 million U.S.), the stock market, as it tends to do, came back to its senses and the wild roller-coaster ride ended.

It was at that point that Boris sold his shares at $27 for a 29-per-cent profit, capitalizing on his strategy of buying on the dip you created.

I’m sure you’ll be pleased to know that Boris has a new lease on life, having quit his job as a baker so as to have sufficient time to scan the news wires from Kazakhstan for more market-moving pronouncements from your competition agency.

PetroKazakhstan spokesman Ihor Wasylkiw told a newspaper that there would be “red faces” at your agency over your timing in disseminating the news.

He could also have been referring to those shareholders who swallowed the bait and sold out on the dip. They are less grateful to you than Boris.

As a small token of his appreciation, Boris sends a bottle of Alberta vodka. He says you may wish to share it with Bernard Isautier next time he visits in Astana. You never know. Mr. Isautier may be inclined to raise a glass or two to your agency for the free publicity of putting PetroKazakhstan on the front page.

* STREET TALK: Canaccord Capital has repeatedly warned flighty Air Canada shareholders to wake up and smell the coffee before their shares in the restructuring company become worthless.

Alas, the shareholders remain decaffeinated.

“The wolf may be wearing benign sheep’s clothing, but it is still a wolf,” Canaccord warned in a recent note with Air Canada (AC-TSX) shares trading at $1.20.

“It still has teeth, it still is hungry and it’s still going to eat you and your pride and your investment when it finally restructures. And it will by December 20 . . . though likely this month.”

* SAGE WORDS: “There are a million things in this universe you can have, and there are a million things you can’t have. It’s no fun facing that, but that’s the way things are.”

– Captain Kirk, Star Trek



HOT ALBERTA STOCK: KENSINGTON RESOURCES
KNN-TSX $1.35
Up 29 cents (+27.2%) on 3,947,800 shares (for week ending Oct. 3).
We know the Kensington train has left the station. That’s about all we know. If you didn't get a ticket, you may be waving bye-bye. When a junior oil and gas company trades almost four million shares in a week, more than half of it on a Friday, there should be a juicy news release by the time you read this.



COLD ALBERTA STOCK: OILTEC RESOURCES
OLT-TSX $1.11
Down 35 cents (-24.0%) on 1,739,100 shares (for week ending Oct. 3).
When a junior oil and gas company releases exploration results, the market tends to focus on the negative results. When Oiltec said it had abandoned a joint venture onshore Nova Scotia, the market gave the shares in this profitable Calgary company a resounding thumbs down.