"Market Monitor"-Mark Skousen, editor of "Forecasts and Strategies."
Friday, August 21, 2009PAUL KANGAS: My guest "Market Monitor" this week is Mark Skousen, editor of the market letter "Forecasts and Strategies." And welcome back to NIGHTLY BUSINESS REPORT, Mark.
MARK SKOUSEN, EDITOR, FORECASTS AND STRATEGIES: Glad to be with you, Paul.
KANGAS: You made some very good calls on your last visit with us in early March. You predicted the stock market was bottoming out and the economy and employment would continue to weaken. All were right on the money, so I compliment you, great call.
SKOUSEN: Well, Paul, it's very unusual to be able to pick the bottom. They say you can never pick the bottom of the market, but I lucked out on this one.
KANGAS: Well, where do you see the market and the economy heading now?
SKOUSEN: Well, my prediction is rather startling or at least it was several months ago or back in March. I'm predicting a Dow 10,000 by the end of the year. We're at 9400, so it looks like we have a possibility of that happening. With the economy, I'm bullish. I think the economy is recovering, but it's going to be a very gradual process. There's a lot of problems in our economy that we're still suffering from, from the financial crisis. It's going to take us quite a while to get out of it. So I'm predicting a positive GDP for the first quarter in January of 2010, but I think the stock market is a better place to be.
KANGAS: How much better will it be? You say 10,000--
SKOUSEN: 10,000 on the Dow is a positive number for the year, so I think that's a good thing to see considering all the trouble that we've come through.
KANGAS: No inflation this week. The producer price index showed actually negative. Will inflation be a problem any time soon?
SKOUSEN: No, I don't think it will be a problem soon. Commodity prices are rising very sharply. I mean, one of my stock picks was Freeport McMoran and copper prices are back up to almost $3 a pound. So there is some inflation coming back into the system. But I don't see it happening at the consumer level yet.
KANGAS: OK, during your March visit, you recommend three securities. Let's see how they've done since early March. Barnes & Noble (BKS) has done very well, up a little over 33 percent. Are you still with it or would you buy more here?
SKOUSEN: I think it's time to sell and move on, but it looks pretty good at this point. Maybe use a stop order would be a way to go.
KANGAS: There's the Freeport McMoran Copper and Gold (FCX) up 92 percent. I suppose you've taken some money off the table there?
SKOUSEN: Yeah, we're selling that as well or using a stop order. Copper prices are very high. I don't see a lot of profit potential left in that one.
KANGAS: And the third pick that you had was the gold shares (GLD), the spider on the big board. And that was a safe haven, up 1.5 percent. Not bad.
SKOUSEN: Yeah, it's up, and I would recommend holding it just as a defensive measure.
KANGAS: How about some new recommendation, Mark?
SKOUSEN: Well, I have three new recommendations for your viewers, Paul. The first recommendation-- in fact all of them are income oriented. I'm recommending Annaly Capital Management. The symbol is NLY. This is a REIT, paying 14 percent. They can pay 14 percent because it's a bit of a leveraged position. But they invest in residential, adjustable rate mortgages. But they use only those guaranteed by the government, like Ginnie Mae.
KANGAS: We have less than a minute left.
SKOUSEN: My other two recommendations are Hong Kong, the Hong Kong index. It's an ETF. The symbol is EWH and I think they'll take advantage of the Asian boom, 4 percent dividend. And my final recommendation is an oil, a Canadian oil and gas trust, Enerplus. ERF is the symbol, yielding about 9 or 10 percent. And I think that we'll take advantage of the economic recovery and we'll see higher oil prices.
KANGAS: Very good. Do you personally own any of the securities mentioned here or have other disclosure to make, Mark?
SKOUSEN: I believe I own the Hong Kong index, but that's the only one.
KANGAS: I'm afraid we're going to have to leave it there, but I want to thank you for being with us once again.
SKOUSEN: All right, we'll see you next time.
KANGAS: My guest, Mark Skousen of the "Forecasts and Strategies" market letter.
