A Play on Palladium

11/14/2003 12:00 am EST

Focus:

Two of the smartest guys in this business have turned bullish on palladium. Jim Dines, the "original gold bug", offers a play on palladium in a recent interview with with Paul Kangas on The Nightly Business Report. The same mining firm is also a new buy from Eric Naimer-Roseman, an expert in hedge funds and commodities.(For more on these advisors, please click on their photos.)

Kangas, Paul PAUL KANGAS: My guest this week is James Dines, editor and publisher of the popular The Dines Letter . Jim, in your last three visits with us, going back 18 months, you have been strongly recommending the gold stocks and they have been stellar performers. What would have to happen to turn you bearish on gold?

DINES: Well, for one, for the US government to balance its budget, and to have a serious monetary system where they don`t just print all the paper they want. I`ve been a pioneer crusading for an honest currency for a long time, and we don`t have one. You need to defend yourself against that by having some gold in your portfolio in case the dollar caves in, which has already begun.

KANGAS: So you believe that gold and silver, for that matter, are both in long-term bull markets?

Dines, James DINES: Correct. And in fact the ‘Dines Wolf Pack’ theory says that silver and gold also move with platinum and palladium.

KANGAS: How about some new recommendations, Jim?

DINES: Well, one is North American Palladium (PAL NYSE). The company is reviving again. Platinum is so far above palladium in price that the automotive companies must right now be considering switching their automotive catalytic converters from platinum back to palladium--and that will send the price up much higher. Plus, PAL is the only independent palladium mine in the entire Western hemisphere. It is a very rare deposit and the metal is in an uptrend."

Roseman, Eric N.We would note that the company also trades on the Toronto exchange, and the Canadian shares are the latest addition to the "Canada Corner" portfolio maintained by Eric Naimer-Roseman, editor of the Global Mutual Fund Investor. Here's his review: "I am adding a palladium play to the portfolio. North American Palladium (CA:PDL Toronto) is a small-cap producer with a market cap of $313 million dollars. The company mines mainly palladium but also digs for platinum, copper, gold, and nickel. Earnings are on an uptrend since 2000 and the stock bottomed earlier this year in the mid-$3 area. Palladium, which is in a bear market right now, might see a big reversal one day. I view it as a contrarian metal whereas virtually every other precious and base metal has gone through the roof over the last 12 months. PDL is a good long-term speculation on palladium’s price revival."

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