"Market Monitor"-Dr. Hans Black, Chairman of Interinvest
Friday, October 09, 2009PAUL KANGAS: My guest "Market Monitor" this week is Dr. Hans Black, chairman of Interinvest, a global money management firm with offices in Canada, Boston, Massachusetts, Switzerland and Bermuda. Welcome back to NIGHTLY BUSINESS REPORT, Hans.
DR. HANS BLACK, CHAIRMAN, INTERINVEST: Thank you. Great to be here.
KANGAS: Do you believe that most global stock markets have gotten ahead of themselves in relation to any worldwide economic recovery?
BLACK: Well, we certainly had a big move up since March and many markets have had a great move. The economy, I think, is doing better but the markets in our view are clearly ahead of the reality.
KANGAS: All right. Give us your thoughts regarding the U.S. dollar.
BLACK: The dollar is perhaps a bit of that in the opposite direction. I think people are too negative on the dollar. The choices I think for investors, the euro and the yen, are not particularly appealing in our opinion right now. And the dollar represents good value and may surprise people over the next 12 to 15 months.
KANGAS: So you feel it's unduly depressed at its current level?
BLACK: We look at currencies as a score of value or a measure of value and we think the dollar is very cheap.
KANGAS: And you think it will remain the reserve currency for the world?
BLACK: It will take quite a while for that to change, Paul.
KANGAS: OK. Now, you've liked gold for a long time and correctly so. Does it have more upside potential or has the run-up above $1,000 an ounce made it too pricey?
BLACK: Very near-term Paul, our opinion is that the price is certainly -- it is pricey to an extent. But I think one shouldn't lose sight of the fact that I think it's acting as an alternative (INAUDIBLE), an alternative currency. And over time, we see gold significantly higher over the next two, three years. We would not be surprised by $2,000 an ounce.
KANGAS: Oh, my goodness. That's very bullish. Now during your last visit in early May, you gave our viewers three "buy" recommendations. Let's see how they've done since then. We see Incyte (INCY), which was in the $2.50 range, now $6.75, 165.4 percent advance, rather nice, very good call. Are you still with it? Would you buy more?
BLACK: We own it. We're very happy with it. This is a company that was really significantly undervalued earlier this year as many other stocks were. The company has excellent research and some great products and we're certainly staying with it.
KANGAS: And you liked Newmont Mining (NEM) the gold and it hasn't kept up with the actual price of gold, but it's still up 6 percent.
BLACK: It's the largest gold producer in the world. We think it's significantly undervalued and we would accumulate it here.
KANGAS: You had one other recommendation back in early May and that was Angiotech Pharmaceuticals (ANPI). It's up 154 percent. Do you still like it?
BLACK: It's, again, thank you, but I think it was just good timing and perhaps a bit of luck. It's an excellent company with some superb products. It was very, very depressed last winter and we were able to buy it for our clients at a very good price.
KANGAS: You made some good moves there. Do you have any new recommendations, Hans?
BLACK: Similarly, we like looking for value and of course the environment of the past 12 months has given us lots of opportunities. I'll mention one that, again, we own a significant position in. It's a matter of public record and it's a company called Allied Defense (ADG). It's a smaller company. It's one of the companies based in the United States. It makes armaments for the military, unfortunately, something that will be needed in our world.
KANGAS: OK
BLACK: And I think it's a very good value.
KANGAS: ADG, trades on the American exchange, I understand
BLACK: That's right.
KANGAS: And then one more.
BLACK: I'll mention a gold stock because there are some excellent gold stocks that have not moved. One that we like is based in Australia. It's debt free, lots of cash on its balance sheet and it's involved in a very interesting project in Indonesia. The company is called Intrepid Mines (IAU).
KANGAS: There it is, $0.32. That's another cheapy, but you don't think it's going to stay that way, right?
BLACK: That's because there are a lot of shares outstanding and a lot of stocks in Australia trade at relatively low prices, lower than what we're used to.
KANGAS: OK, do you personally own these securities or have other disclosure to make?
BLACK: I own them all.
KANGAS: OK. As a medical doctor you said last may the H1N1 flu virus should be taken seriously. Give us a very brief update.
BLACK: Well, I think it has to be taken seriously. And I think since then, the World Health Organization has ranked it up at a six now. And unfortunately, there's a lot of stories about young people dying and so I think it's something that has to be watched very carefully.
KANGAS: All right, our time, unfortunately, has run out, Hans. But I want to thank you for being with us once again.
BLACK: Delighted. Thank you, thanks for having me Paul.
KANGAS: My guest Dr. Hans Black of Interinvest.
