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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (45977)	12/16/2009 12:14:30 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 71120

"I'm So Bored of Gold," James Altucher Says, Offering Some Alternatives Posted Dec 16, 2009 10:07am EST by Aaron Task in Investing, Commodities Related: CSH, NZT, GLD, GDX, NEM, SLV, ^HUI Gold captured the attention of investors around the world in 2009 as it soared past $1200 before dipping recently. Heading into 2010, gold remains a favored "alternative" asset for individuals, institutions and central bankers alike who are looking to hedge against further weakness in the dollar, or a revival of the credit crisis. But James Altucher, managing partner of Formula Capital, says you should be looking at alternatives to the alternative. "I'm so bored of gold already - it's just a rock," Altucher says in the accompanying video. "I don't like betting on things where there's just one premise - ‘everybody's going to panic so let's buy gold'." Instead, Altucher recommends stocks that are both correlated to the price of gold and have upside potential based on their own fundamentals. His favorites: Cash America: Pawn shops enjoy the "best business model on the planet" - charging borrowers high rates and holding onto their collateral, Altucher says. These days, that collateral is often gold, which the pawn shop acquires at levels far below spot market prices and then can sell if (and when) the original owners fail to make debt payments. "As gold goes up so does the asset value in [Cash America's] safe," he says, noting the company trades at a P/E of less-than 10 times expected 2010 earnings. Telecom Corp. of New Zealand: What does a New Zealand phone company have to do with the price of gold? Well, the New Zealand kiwi is the currency most closely correlated to the price of gold, Altucher says, in part because of the country's proximity to Australia, a major gold producer. What's good for gold is good for Australia, which is good for New Zealand and its primary telephone company. Telecom Corp. of New Zealand also boasts a 10% dividend and a P/E of 7. "It's just dirt cheap," Altucher says. Altucher owns Cash America but has no stake in Telecom Corp. of New Zealand. Both companies, he says, give you an indirect exposure to more upside in gold prices and much more. "Gold you buy when you're depressed or anxious," he says. "Go to a therapist and buy stocks that could have real economic value that are correlated to the price of gold and could simply go up if the economy improves, which is what you want."