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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Techplayer who wrote (13787)	11/20/2002 11:21:38 AM
From: Techplayer	Respond to of 57110

A strategist wonders about terrorism By Thom Calandra, CBS.MarketWatch.com Last Update: 10:34 AM ET Nov 20, 2002 SAN FRANCISCO (CBS.MW) -- Longtime market watcher James Dines says that when it comes to the threat of terrorism, the market's memory is short, and perhaps dangerous. "It is my instinct that terrorism will rear its head again," says the editor of The Dines Letter. "I think we are going to have a terrorist event, and I think this market is in deep trouble." Almost two weeks ago, Dines took the step of spotlighting this threat in his newsletter, which has been published since 1961. Days later, a report that Osama bin-Laden was alive received worldwide media coverage. U.S. authorities also endorsed the reports. In contrast to Dines' comments, most stock market professionals are playing down the importance of terrorism. Indeed, the Nasdaq has risen some 30 percent since early October. Dines, whose 1996 book "Mass Psychology" examines investor and consumer sentiments and their impact on the market, sees what he calls a "classic rejection" of a theme that will haunt markets for some time to come. "We are frankly alarmed that something spectacular is about to happen, in several countries, possibly all of the six that bin-Laden specifically warned against: America, Australia, Britain, Canada, France, Germany and Italy," says Dines. The newsletter editor acknowledges the terrorism threat has, until recently, suppressed stock-market prices. Some estimate $8 billion of lost wealth in the stock market slide that began in January 2000, when the Dow Jones Industrial Average reached a peak. Dines says the ability of the spot gold to hover around $320 an ounce is also significant. Gold, which traditionally moves counter to the stock market, has been clawing its way back to the $320 level throughout the rally in stock that began in early October. "Golds are not in the news at all, completely ignored, so our bullishness would attract almost no attention," says Dines. "We are not at all pounding on the table, but it looks to us as if there finally might be the beginning of a gold shift to the upside." Gold mining shares earlier this year were among the stock market's biggest gainers, then fell sharply when bullion fell back toward $305 an ounce during the summer. The spot gold price Wednesday morning was rising 40 cents to $319. Gold mining stocks "may be ready to make their next move up," Dines told me in a telephone interview. He points to shares of South Africa's Anglogold (AU), silver miner Coeur d'Alene (CDE), Freeport-McMoran Copper and Gold (FCX), Canada's Iamgold (IMG) and South Africa's Randgold Exploration (RANGY) as mining stocks that bear watching in coming days and weeks. On Friday, Dines will be featured on Paul Kangas' Nightly Business Report on PBS stations across the United States.