Market Monitor-Dr. Hans Black, Chairman of Interinvest
Friday, February 24, 2006PAUL KANGAS: My guest market monitor this week is Dr. Hans Black, the chairman of Interinvest, a global money management firm with offices in Switzerland, Canada, Bermuda and Boston, Massachusetts. Welcome back to NIGHTLY BUSINESS REPORT, Hans.
DR. HANS BLACK, CHAIRMAN, INTERINVEST: Thank you. It`s good to be here.
KANGAS: Of the many factors you watch which help you to decide your investment strategy, which are the most important to you right now?
BLACK: Well, I think the number one thing is clearly interest rates. We have a new chairman of the Fed and I think he`s got a tough act to follow. He`s been -- Mr. Greenspan was around for 19 years. I think the new Fed chairman has to establish his credentials and do it very quickly. I think he gave an excellent testimony in front of the House and the Senate last week, but I think he`s going to be tougher than people think, perhaps here in the first six, seven months. We believe interest rates are going up, Paul. We think interest rates are going to go up at least one, two, probably maybe three more times this year.
KANGAS: All right, a clear-cut opinion there. Because you are a global investor, what stock markets are currently the most attractive, in your opinion?
BLACK: Well, we like -- I think we are really looking at groups here. We think there`s no clear country or sector or geographical sectors that are interesting, but we like health care companies around the world. They`re been in a bear market, many of them for five or six years. We like selective technology companies. It`s really, we think, a stock-picks` market across the board. There`s no clear sector or country that is cheap. The other thing I think you have to keep --
KANGAS: Go ahead.
BLACK: The other thing I think that one has to keep in mind is that in many of the western countries, many of the OECD countries, the consumer has just really drawn out. Of course we see this in North America. We see it in many countries in Europe. So the consumer is, I think, going to take a seat back at some point and it`s clearly hurt by rising interest rates both in North America as well as in Europe.
KANGAS: Any other important things you are looking at right now that concern you?
BLACK: I think the other thing that one has to think about is bird flu. Avian flu is something that has been in the news every day, but it`s clearly spreading. It is, so far, not clearly being transmitted human to human. But there`s some early evidence that one has to keep an eye on that more than ever.
KANGAS: Well, since you are a medical doctor, we certainly will take that and heed it very carefully. Now, when you were with us last June, you recommend two stocks to buy. Let`s see how those stocks fared in the meantime. Chiron, medical products company, up nearly 21 percent, great call. And Biogen, another biotech stock, up 36.2 percent. I congratulate you on two great choices.
BLACK: Thank you.
KANGAS: Are you still with those stocks?
BLACK: Well, Chiron is being bought out, as you know, and you`re going to get a few more dollars in cash once that buy-out goes through, which we believe it will. Biogen we think has further upside potential over the next year or two.
KANGAS: Any new recommendations for our viewers, Hans.
BLACK: Well, I`m going to stick for a moment with what we think is really the chief groups in the world and that`s health care and I`ll mention Incyte (INCY) in the United States which is a very, very cheap company with a lot of interesting research coming through, both the HIV area as well as the anti-arthritic area. Another one would be Millennium Pharmaceuticals (MLNM). Millennium has some very interesting anti-cancer drugs, VELCADE is the leading one. The next one would be Angiotech (ANPI), which is actually a Canadian- based company and which has been an underperformer now for a couple of years. We think it`s excellent values at these prices. And in a different sector, we think ConAgra (CAG), which has been a real sleeper now for five, six, years, the stock has not performed well at all, has a good dividend and sells at a good multiple. We think that`s a cheap stock.
KANGAS: Do you personally own these securities, Hans?
BLACK: Yes, we own them for clients, and we own them personally.
KANGAS: All right. I`m afraid our time is running out, but I want to thank you once again for sharing your insights with us.
BLACK: Thank you very much.
KANGAS: My guest, Dr. Hans Black, the chairman of Interinvest.
