Richard Russell: Avoid Stocks - Except Gold Miners

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 |  Includes: ABX, AEM, AUY, EGO, GDX, GG, KGC, NEM, NG, NGD
by: Henrique Simoes

Richard Russell is advising his clients not to buy stocks because the bear market will torture investors but he sees great returns in gold stocks (from Richard Russell, Dow Theory Newsletter):

The bear keeps torturing the majority. If only the authorities could straighten out the oil problem, the housing problem and the unemployment problem, everything would be fine. But the market is not interested in current problems, it is looking ahead to the disaster that we will see in late 2010... Holding stocks here is a sure ticket to a smaller bank account. People cannot take it into their psyches that this is the resumption of one of [history's] great bear markets. Our salvation is bullion gold. The gold mining stocks are also doing beautifully.

Gold stocks surged on Friday with many of the large caps rallying over 3%. For example, Newmont Mining surged 4.6%, and made a new 15 years high. The path of least resistance is up on gold stocks and some of the large cap names you may consider buying are Kinross Gold Corporation (USA) (NYSE:KGC), Agnico-Eagle Mines Limited (USA) (NYSE:AEM), Newmont Mining Corporation (NYSE:NEM), Barrick Gold Corporation (USA) (NYSE:ABX), and Goldcorp Inc. (USA) (NYSE:GG).

If you want more risky small and medium cap bets, Fronteer Gold Inc. (FRG), Eldorado Gold Corporation (USA) (NYSE:EGO), New Gold Inc. (USA) (NYSEMKT:NGD), NovaGold Resources Inc. (USA) (NYSEMKT:NG), Yamana Gold Inc. (USA) (NYSE:AUY), are names to study further.

Disclosure: No positions