"Renaissance" Investing

01/20/2006 12:00 am EST

Focus:

Mark Skousen

Editor, Forecasts & Strategies, High-Income Alert

"Foreign stocks and natural resources are poised to lead the way in 2006," says Mark Skousen, a true "renaissance man" noted as an advisor, economist, professor, and author. (His latest book updates Ben Franklin's autobiography.) Here’s his best bets for 2006.

"While I expect the US economy to survive and prosper in 2006despite continued inflation and excessive government spending this year will see foreign stocks and natural resources doing better than domestic stocks. Given that scenario, I have a pick in both of those areas for you.

"Let’s start off with a conservative natural resource stock (that also happens to be a foreign company). In my judgment, silver stocks offer greater potential for profits than gold. Silver is used far more in industrial settings and faces an annual supply shortfall. On top of that, foreign governments have cut back their sales, and the US has stopped selling its silver hoard altogether.

"My more conservative selection for 2006 is Pan American Silver (PAAS NASDAQ). Buying shares of Pan American is a great way to profit from higher silver prices. With mines in Mexico and Peru, the Vancouver-based company produced 13 million ounces this past year and it has turned the corner in profitability. Overall, with these two picks in your portfolio, you’ll be set to take advantage of the hottest trends over the next year."

"My more aggressive pick is Sohu.com (SOHU NASDAQ). This is a great play on one of the fastest growing sectors in China. Sohu.com is China’s number two Web site and search engine in terms of online ad revenues, including advertising, search services, online gaming, and e-commerce through its seven Web portals.

"Sohu’s goal is to imitate the success of Yahoo and Google in online advertising. If it achieves this goal, it will be a big winner. Sohu.com was losing money two years ago, but has since experienced a sharp turnaround in revenues and earnings. It has a healthy 26% profit margin and a forward p/e of only 21."

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