Fred Hickey: Buy Gold, Short the Horsemen - Barron's

Barron's 2008 Roundtable participant Fred Hickey, editor of The High-Tech Strategist newsletter, weighs in with his picks for 2008. In a nutshell: Buy gold - sell horsemen:

• Horsemen [big-cap tech stocks] did spectacularly in 2007, leading to a 'spike' reminiscent of late '99. Specifically, Hickey says Research in Motion's (RIMM) sales are not sustainable, especially in the face of an upcoming glut of touch-screen cellphones. Salesmen are pushing the phone to retail buyers, but the company doesn't know the market. [Hickey suggests shorting using put options.]
• Hickey also suggests shorting Amazon.com (AMZN) - noting internet-based sales slowed dramatically over the holidays, and shipping costs are rising.
• streetTRACKS Gold Trust (GLD) - despite an eight-year bull market that saw gold jump 30% last year, the most exciting phase is yet to come. Dow-to-gold ratio has historically been about 10 to 1; now it's 15 to 1. Demand from ETFs is helping drive up prices, yet mine production remains weak.
• Agnico-Eagle Mines (AEM) - has five new mines coming online, leading to 200% growth in 2008, yet its costs are only $200/ounce.
• CurrencyShares Japanese Yen Trust (FXY) - the yen has a long way to go up. Hickey also suggests a reverse carry trade, long the yen and short the pound [editor: CurrencyShares British Pound ETF (FXB)].

Comments

[Toto-13]

These are some bold predictions.

Rob,
WallastonInvestments.c...