Shocked, that is, that the report by Arjun Murti was not released on April Fool's Day, but the day before. Seems the gang at Goldman jumped the gun.

The market's typically knee-jerk reaction of shock, dismay and panic- buying in response to this report from the Wall Street investment bank was quite comical, to say the least.

First of all, contrary to popular belief and numerous newspaper reports, Goldman isn't the first on the street to speculate on triple-digit oil prices. In fact, Goldman is one of the many Wall Street investment banks that have been a tad late to the party in pounding the table on energy.

On Bay Street, for example, Eric Sprott at Sprott Asset Management (www.sprott.com' target='_new'>www.sprott.com) has been a raging bull on energy for years - and long before oil stocks came into vogue and hogged the headlines of the financial sections of daily newspapers.

Earlier this year, in fact, Sprott Asset Management churned out a report - which can viewed at www.sprott.com' target='_new'>www.sprott.com - predicting "triple-digit (oil) prices in the next few years - or sooner if there is a supply shock.”

Wonder if Murti had the pleasure of reading this report.

More importantly, don't you think that we should consider the source of the investment bank trumpeting $105 oil?

Anybody remember five years ago, in the midst of the dot-com bubble, when Goldman was one of the Wall Street investment banks whose superbulls were pounding the table on technology stocks before the tech crash and rather tardy in reining in those wildly bullish research reports?

Considering Goldman's credibility issues - it is one of the Wall Street firms that has been probed by the Securities and Exchange Commission over alleged conflicts of interest in research during the dot-com go-go days - shouldn't a wild forecast of doubling oil prices come with a disclaimer about the firm's track record for feeding investors with its too-rosy market prognostications?

Goldman investment strategist Abby Joseph Cohen ought to be a spokesperson for the bull- riding circuit, considering her bullish reputation and atrocious calls on the market in recent years.

If you took Cohen's advice in 2001 and bought an exchange-traded fund, you got your clock cleaned. That year, Cohen had a forecast for the S&P 500 index of 1,650. That target missed by 30 per cent. To add insult to injury, Cohen advised clients in March of 2001 to increase exposure to stocks while the mighty bear was knocking on the door.

In 2002, Cohen couldn't shoot fish in a barrel with a shotgun, again sticking to her guns with a target of 1,363 for the S&P index and missing the mark by almost 40 per cent.

Yet, Goldman Sachs obviously continues to maintain a mean clout on Wall Street as oil stocks that had been in the midst of a correction shot back up on the day of the report, even as many raised eyebrows at the $105 forecast.

I'm still waiting to hear an astute energy expert who can make sense of the 40-page energy report by Goldman Sachs that calls for an oil supply crisis reminiscent of the 1970s when an oil spike fuelled a recession. In the report, Goldman also raised its oil price forecasts for 2005 and 2006, raising those targets in one fell swoop to $50 and $55, respectively, all the way from $41 and $40.

Josef Schachter, president of Schachter Asset Management, is one of Canada's staunchest energy bulls but, in an interview on Report On Business-TV on the day of the report, said he couldn't foresee how the price of oil could hit $105 by 2007 based on supply/demand fundamentals, unless you took Saudi Arabia's production out of the equation.

Although Schachter is a longtime energy bull, he has been cautioning against a short-term correction for oil prices in the five- to 10-per- cent range. Schachter, whose firm provides oil and gas research to institutions, recently told the Edge that he expects the current bull market in energy to push the S&P/TSX Energy index, recently at 240, to 500-plus.

Another longtime energy bull, fund manager Glenn MacNeill, vice-president of investments at Sentry Select Capital Corp., also believes the oil price may be vulnerable to a pullback, perhaps to the $40 to $45 range (for MacNeill's top picks, see Pro's 3 Stars on Page 21.)

In the meantime, I promise to catch up with the ragin' brahma bull from Goldman, Arjun Murti, in 2007 for his reflections on the "super-spike" forecast. Gosh, we may have to run that column in the April Fool's issue.

* THE CONTRARIAN VIEW: While the herd has been stampeding into oil and gas stocks, Adam Hamilton, publisher of the Zeal Intelligence newsletter, has been making an intriguing case for gold to play catchup with oil.

Hamilton has been charting a 40-year relationship between oil and gold prices. The charts for the two commodities are strikingly similar since 1965 (his chart can be viewed at www.zealllc.com) but, since gold has recently badly lagged behind oil on the pricecharts, Hamilton believes the yellow metal is overdue for a spike to get back in line with oil, which in turn may be due for a correction.

The recent gold/oil ratio was the lowest ever, showing an ounce of gold was worth 7.7 times more than the cost of a barrel of oil in late March. According to Hamilton, the mean average ratio of the gold price versus the oil price over the 40-year span is 15.3. If that ratio returned to its average of 15.3 and the oil price was $50 US, that, according to Hamilton, would translate into a gold price of $765 US, an 80-per-cent spike from its recent price of $425.

Of course, for that to happen, gold would need to shed the currency monkey off its back. It now trades essentially with the rollercoaster U.S. dollar.

"As oil marches higher, gold will inevitably follow sooner or later as it always has," writes Hamilton in his report on the relationship between gold and oil. "Indeed, once investors discover the huge potential of gold and vault it into Stage 2 of its secular bull market, gold will surge and outperform oil long enough to bring the key ratios back in line."

If you happen to believe Hamilton, the gold bull, and Arjun Murti, the oil bull, then a speculation in gold bullion or gold stocks looks pretty good - on paper, at least, where according to Hamilton's thesis, $105 oil would translate into a gold price of $1,606.50.

Hey, has anyone thought to chart the relationship between uranium and silver?

* SAGE WORDS: "When a man is exploring for oil, the only reality is the next wildcat, the one that will come in. He lives so completely in his undiscovered wealth that the struggle to pay his bills is what seems like a dream."

- Ruth Sheldon Knowles, author and oil historian

Hot Stock

CanWel Building Materials TSX:CWX $19.75 Up $5.73 (+40.9%) on 813,874 shares (based on weekly stats through April 7 for Canadian stocks over $1)

Is your company's stock sleepier than a porch hound (or a building materials stock, for that matter)? Does it trade only three shares a day? Well, get with the times, pal. Churn out that we-are-transforming- ourselves-into-an-income-trust press release. Works all the time. All is well at CanWel since the company announced it was "trusting" itself. What happens later? Well, never mind. Enjoy the party.

Cold Stock

Messina Minerals TSXV:MMI $2.10 Down $1.26 (-37.5%) on 4.1 million shares (based on weekly stats through April 7 for Canadian stocks over $1)

It seems the mining speculators got a tad ahead of themselves in pushing this nine-cent stock of five months ago to a peak of $4.13. This panic selloff came as a result of disappointing results from the Vancouver company's zinc-copper- silver-gold play in central Newfoundland.

The property is known as the Boomerang.

No kidding!

(Gyle Konotopetz can be reached at gyle@businessedge.ca)