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A Trio of Triplets
04/09/2004 12:00 am EST
Here we offer a trio of investment triple plays. Mike Norman suggests a package of three mortgage firms, while Neil George offers three international water companies, and Mary Anne and Pamela Aden suggest a trio of currency funds.
(For more information on the advisors cited below, please click on their photos.)
"One place where I think there is still opportunity is in the fixed-income sector," says Mike Norman, editor of The Economic Contrarian. "In fact, the opportunity just got even greater with the recent selloff. The drop in bonds was an overreaction. You should be adding to bond positions and interest sensitive stocks, particularly in the mortgage area. I like Annaly Mortgage (NLY NYSE), Capstead Mortgage (CMO NYSE), and Impact Mortgage (IMH NYSE). These securities were beaten down sharply. Here are some of reasons why I remain bullish. First, I do not buy into the broad inflation view, even though I know that there has been a rally in commodity prices. However, consumer inflation remains tame, and even producer prices are coming down. The big downdraft in the bond market, and in these issues, was probably a knee-jerk reaction to the recent strong jobs report- nothing more. It's a buying opportunity."
"When it all comes down to life and death, we could exist without oil, but we'd never make it without fresh water," says Neil George in his ByGeorge! e-letter. "I feel water companies will continue to emerge as an important hedge for our long-haul portfolios. In the US, many of the highly priced companies have little fresh water reserves of their own and still trade at huge premiums. Meanwhile, some of the world's largest owners of fresh water reserves continue to trade at bargain basement prices, and in near obscurity. I recommend that investors seeking water reserves take a good, hard look at the French companies Veolia Environment (VE NYSE), formally Vivendi Environment, and Suez (SZE NYSE), as well as German giant RWE (RWEOY Other OTC). All thee trade at huge discounts to their more touted US peers, and at a huge discount to trailing sales. Dividends are also involved, making them that much more enticing. But they're still ignored."
"Many are wondering if the recent strength in the dollar will continue and if the bear market decline over the past couple of years may be ending," notes Mary Anne and Pamela Aden, editors of The Aden Forecast. "After all, the dollar index has already had a significant 30% drop. We think it's a classic case of losing sight of the forest for the trees. The major trend is down for the US dollar and it's up for the international currencies. That's been the case since 2002 and it's still the case. Corrections within the major trends are normal. If you haven't invested in currencies yet or you want to add to your positions, use this current weakness to buy. We continue to recommend keeping a large position in the foreign currency markets such as the Australian, New Zealand, and Canadian dollars, British pound, euro, yen, and Swiss franc. We also like Franklin Templeton Hard Currency (ICPHX), the Prudent Global Income (PSAFX), and the closed-end Aberdeen Asia Pacific Income (FAX ASE)."
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