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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: c.hinton who wrote (20016)	10/9/2002 10:50:38 AM
From: isopatch	Read Replies (1) \| Respond to of 36161

Chinton. Speaking of LT gold outlook... <First Eagle sees more upside in gold Gold bull market still young, says the #1 gold fund By Deborah Adamson, CBS.MarketWatch.com Last Update: 12:02 AM ET Oct. 9, 2002 NEW YORK (CBS.MW) - Gold has had a stellar run this year, but fund manager Jean-Marie Eveillard is convinced the precious metal is set to go higher. "We think we are in the early stages of a bull market in gold," said the fund manager of the $74 million First Eagle SoGen Gold. "The dollar will still drop and the budget deficit is ballooning." He's worth listening to. As of Monday, the nine-year-old First Eagle SoGen Gold is the best performing gold fund year-to-date with a return of nearly 72 percent, according to Lipper. That compares with a 37 percent average return among other gold funds and a 31 percent drop for the Standard & Poor's 500 ($SPX: news, chart, profile). In the universe of all types of mutual funds -- stocks, bonds and others -- SoGen Gold ranks among the top 10 performers year-to-date. Over the last three years, the fund (SGGDX: news, chart, profile) has averaged annual gains of 18 percent while its peers added 6.4 percent a year and the S&P gave up 15 percent. Eveillard likes Newmont Mining (NEM: news, chart, profile), a non-hedger that is decreasing the hedge books of gold producers it acquired. A miner that doesn't hedge gets more exposure to changes in the gold price. But the fund manager also likes Newmont Mining because of its "extremely smart and honest" president, Pierre Lassonde. Shares closed down 31 cents Tuesday to $25.00. The manager favors Industrias Penoles as well, a Mexican miner of gold and base metals that's part of Mexico's Bolsa market index. While the stock is not a pure gold mining play, Eveillard like its because the price is cheap. The stock doesn't trade on an American exchange. His third pick is Freeport-McMoran Copper & Gold - its preferred "B," (FCXPRB: news, chart, profile) "C," (FCXPRC: news, chart, profile) and "D" (FCXPRD: news, chart, profile) shares, not the common stock (FCX: news, chart, profile). He doesn't like the common shares because the hybrid miner should be trading more cheaply than pure gold miners. The preferred shares' dividend and the redemption value are pegged to movements in gold and silver prices, making them a better investment, he believes. Common shares traded down 14 cents to $11.08. Eveillard has 70 percent of his portfolio in gold mining stocks, nearly 10 percent in 1-year bank notes indexed to the price of gold, 10 percent in Freeport preferred shares and the rest in cash. But since the mutual fund's board just authorized the purchase of actual metals, Eveillard plans to use his cash to purchase gold bullion.> marketwatch.com