"Market Monitor"-Dr. Hans Black of Interinvest
Friday, May 08, 2009PAUL KANGAS: My guest "Market Monitor" this week is Dr. Hans Black, chairman of Interinvest, a global money management firm with offices in Canada, Switzerland, Bermuda and Boston, Massachusetts and Hans, welcome back to the program.
DR. HANS BLACK, CHAIRMAN, INTERINVEST: Thank you very much. Good to be here.
KANGAS: Last October you told our viewers that U.S. stocks were cheap and you forecasted a big rally at least by spring. Well here we are into a two-month rally. Is it for real or is it a trap for the market bulls?
BLACK: It looks for real right now, Paul and we're certainly very happy about what's happening and it's pushed a lot of stocks up. But we are beginning to see speculation in a lot of markets, not just here but in some foreign markets as well and the moment we start seeing that our inclination is to start worrying. And I think central bankers are going to worry. I think central bankers are going to worry they were too generous with some of the liquidity that's entered the money markets.
KANGAS: So you're doing a little selling into the strength, are you?
BLACK: That's correct.
KANGAS: OK. What's your opinion of the stress test results? Will they really be meaningful?
BLACK: I think it's a good PR exercise. I think, you know, when these decisions were made in the context of February, March, everybody was very worried just what was going to happen. So I think it's sort of anticlimactic now. I think the numbers are reasonable, but we still have other problems to come in housing, which I don't think is over. We'll see how things look in the fall.
KANGAS: Are you still worried about the economies in eastern Europe and Korea or do you see signs that will help the U.S. market?
BLACK: Yeah, we're -- we were very concerned and still are concerned about some emerging markets, notably eastern Europe which is far from over. We have seen major defaults also in some of the former Soviet Union countries like Kazakhstan, a major bank default and I think you've got to keep an eye on Pakistan here which of course is having immense internal political problems and that I think is maybe the number one foreign market you've got to worry about.
KANGAS: In addition to being a money manager, you are a medical doctor, so I must ask you about what you think is going to happen with the H1N1 flu outbreak.
BLACK: Well, I think it's very serious. The WHO in Geneva has taken this very seriously. They've ranked it on a scale of five out of six on the global pandemic scale. It could easily jump to a six. We're going to have to watch this this fall because as flu season starts again around the world in the northern hemisphere in the period of September, October and November this can get very serious again.
KANGAS: Now in October when you were last with us. you gave our viewers three stock picks. Microsoft (MSFT) was at the top, the bluest of blue chips and strangely enough, it's down just a little bit. Are you still with it? BLACK: Yes, we like the company. We certainly will hold it here.
KANGAS: You would buy more here?
BLACK: Yes, we like the stock. We don't think there's anything wrong.
KANGAS: Bristol-Myers (BMY) is up a bit. You're staying with it?
BLACK: Yes. We like Bristol. Bristol doing some interesting things actually. They're moving money into some smaller enterprises, some smaller existing biotech companies. We think that's the wave of the future.
KANGAS: OK.
BLACK: Putting money in smaller enterprises.
KANGAS: And El Paso (EP), you liked. It's up a little bit, so not bad too. You like -- BLACK: Thank you, I think El Paso is great value here.
KANGAS: We just have less than a minute for some new stock picks. Let's go ahead with that number one choice.
BLACK: I'll mention Incyte (INCY) which is a biotech company. Great products, a deal with Pfizer on an analgesic. A number of products in phase three, superb value here. KANGAS: INCY trading symbol.
BLACK: That's correct.
KANGAS: Number two choice?
BLACK: I'll mention Newmont (NEM) which to us is just a huge pot of value. It's a gold stock of course. We think gold prices are headed a lot higher, biggest producer in the world and should be trading a lot higher than it is.
KANGAS: We have time for one more quickly.
BLACK: I'll mention Angiotech (ANPI) which is a Canadian biotech company. We own a very large position there which is a matter of public record, but we think that stock is recovering and going to go a lot higher.
KANGAS: ANPI is the trading symbol. And Hans, do you personally own these stocks?
BLACK: Absolutely.
KANGAS: Our time has run out but I want to thank you for sharing your insights with us again.
BLACK: Pleasure to be here. Thank you Paul.
KANGAS: My guest Dr. Hans Black of Interinvest.
