Kangas: Insights from Dines
06/18/2004 12:00 am EST
Each week, Paul Kangas features a "market monitor" interview on his exceptional Nightly Business Report . His latest guest was Jim Dines, who has been among the nation’s leading advisors for over four decades. Here is some Dines’ latest advice.
Paul Kangas : My guest market monitor this week is James Dines. Let's cut rut to the chase, Jim, and get your current view of this rather difficult stock market. Where do you stand?
Jim Dines: We're still on our buy signal. We flashed that on May 17th, a month ago, and I think we might get a little dip here in late June, but I think that it's going to move higher. If you remember in my 2004 forecast issue, I said that we'd get a top in March, a decline into the summer, and then higher markets rest of the year.
Kangas: All right, now, what's your view on the metals, which you have been very bullish on in recent times?
Dines: We turned bullish, as you know, in metals in 2001. And they've had a phenomenal run. But the precious metals go with currencies. We e xpect to have a huge run in the golds one of these days, because there will be a flight out of the dollar, like we almost had last year. And when that happens it's going to be really unpleasant for the stock market.
Kangas: How about some recommendations? What do you like?
Dines: "North American Palladium (PAL ASE) was a recommendation I made the last time I was on your show, and I still like the stock a lot. Meanwhile, for new recommendations, what I'd like to do is predict something really revolutionary, which is a new bull market that we consider on par with our bullish call on Internet stocks in 1996 and our call to go into golds in 2001. I now see a new bull market in uranium. We're producing only about half of what the world uses, in easy round numbers.
KANGAS: Do you have stock to recommend that's involved in it?
DINES: We have several, but for a general audience, I would recommend the blue chip of the industry— Cameco (CCJ NYSE). This company is the largest producer of uranium in the world, and has great reserves. I also like Apex Silver (SIL ASE), which has got the largest open-pit silver zinc deposits.
KANGAS: Anything else?
DINES: Outside of the metals, I like Sirius Satellite (SIRI NASDAQ), which has a CD-quality commercial-free satellite radio, and there are 200 million cars that represent its potential market. We also like Whole Foods (WFMI NASDAQ). I've been an outstanding proponent of organic foods now most of my life, and this is the leading company in this area. They're all in up trends. I own all of these stock recommendations. I put my money where my mouth is.
KANGAS: I want to thank you very much for being with us once again."
Meanwhile, here are some additional comments from the recent issues of The Dines Letter: Says Dines, "There have been a number of scary gold and silver drops since the major bull market began in 2001, and the current consolidation has been deep enough, so that it should be ending somewhere around current levels. Such declines are always discouraging, which is why it’s difficult to buy near bottoms. But please keep in mind that the very function of declines in a major bull market is to keep investors out— until the top. Meanwhile, our key indicator for gold and silver stocks has dropped into its ‘buy zone’. If we were forced to hypothesize, our guess would be that the rise would be spearheaded by silver mining shares, with palladiums and uraniums in hot pursuit. In addition to Apex Silver, we especially like Pan American (PAAS NASDAQ) and Silver Standard (SSRI NASDAQ) In the uranium area—in addition to Cameco—we would recommend averaging down in depressed— and more speculative shares such as Denison Mines (CA:DEN Toronto) and Southern Cross (CA:SXR Toronto)."