All That Glitters Is not Gold
08/11/2006 12:00 am EST
Mary Anne and Pamela Aden’s comprehensive monthly newsletter gives a thorough review of all major sectors of the economy and markets. In this condensed excerpt, their focus is on their analysis of and recommendations in natural resource investments…
“The war in the Middle East is keeping upward pressure on oil, the metals and their shares. The slowing US economy is driving the dollar down and currencies up. Due to a likely pause in interest rate hikes, bonds are rising, but the stock market is mixed.
“We continue to recommend buying and keeping a 60% position in gold, silver, their shares, as well as oil, energy and resource shares, as a renewed rise is underway. The exchange traded funds (ETF) are an easy way to buy and hold gold, silver, oil and gold shares: streetTRACKS Gold (GLD NYSE), iShares Comex Gold (IAU ASE), iShares Silver Trust (SLV ASE), Mkt Vect Gold Miners (GDX ASE).
“We also recommend keeping physical gold and silver, and put a larger portion in gold and silver, and a smaller portion in their shares. Gold shares, and especially silver shares, are rising from an intermediate low area. Our silver shares, Silver Standard Resources (SSRI NASDAQ), Pan American Silver (PAAS NASDAQ) and Coeur D Alene (CDE NYSE), are bouncing up and they look good. Keep them.
“Our natural resource shares are basing and some are leading in a renewed rise like IGE, PD and PSPFX. We continue to recommend buying and keeping the shares listed in order of strength, but a basket of these shares provides a good solid position: iShares GS Nat Res (IGE ASE), Phelps Dodge (PD NYSE), Freeport-McMoRan (FCX NYSE), US Global Resources Fund (PSPFX ), Rio Tinto (RTP NYSE), BHP Billiton (BHP NYSE), Cameco (CCJ NYSE), Sel Sec Matris SPDR (XLB ASE).
“Our energy stocks are mixed. The strong ones continue to do well, which are iShares S&P Global Energy Sector (IXC ASE), iShares Dow Jones US Energy (IYE ASE), Energy Select Sector SPDR (XLE ASE), ConocoPhillips (COP NYSE) and Suncor Energy (SU NYSE). These are the ones to buy for new positions.
“Our coal stocks, Arch Coal (ACI NYSE), Peabody Energy (BTU NYSE) and Westmoreland Coal (WLB ASE) are starting to rebound from a clear oversold area. Newfield Exploration (NFX NYSE), Noble Corp. (NE NYSE) and Transocean (RIG NYSE) have been disappointing. We recommend selling these and stay with the stronger ones. Exxon Mobil (XOM NYSE) has done very well but it’s overbought; buy on weakness.”
The key risk-on and off drivers today are the same – U.S. politics, global growth, other centr...