"Market Monitor"-Douglas Jimerson,, Editor and Publisher of "National Trendlines."
Friday, October 26, 2007
PAUL KANGAS: My guest market monitor this week is Douglas Jimerson, editor and publisher of "National Trendlines." And welcome back to NIGHTLY BUSINESS REPORT, Doug, good to see you.
DOUGLAS JIMERSON, EDITOR & PUBLISHER, NATIONAL TRENDLINES: Thank you, Paul. It's great to be back.
KANGAS: As we know, the big question on Wall Street for some time has been is the worst of the housing slump over or will it linger still longer?
JIMERSON: I fear it has much farther to go and we've been talking about this for several years, but I think that real estate is, is the type of industry that takes many years to work through its cycles. So we're probably looking at the slowdown into 2009.
KANGAS: And will continue to affect the stock market over here?
JIMERSON: I think so. (INAUDIBLE) It puts us in a trading range type of market, most likely.
KANGAS: In your latest market letter, you advise your conservative investment subscribers to allocate 20 percent of their assets in government bonds and the other 80 percent in cash. That sounds like you're awfully bearish on our market.
JIMERSON: We have just taken the money out of the NASDAQ. I think when we have the big news like we had today for Microsoft, the stock jumps 9 percent, that's time to take the money off the table and wait for an opportunity.
KANGAS: During your last visit with us in May you made two great calls. First you said the tech stocks were starting to look awfully good and it turned out to be an excellent call. And you also said take some profits in the energy group and they got hit pretty good there during the summer. So I congratulate you on those two good calls.
JIMERSON: Thanks.
KANGAS: On that last visit with us, you gave our viewers three "buy" recommendations. Let's see how they've done since then. Dennison Mining (DNN), that's a uranium mining company, right?
JIMERSON: Yes, it is.
KANGAS: Down 9.3 percent and still having a tough time convincing the nation to go nuclear.
JIMERSON: Well, but we have our first licensing since '73 of a nuclear plant. So I think the time has come. Now, this is a long-term opportunity so I would stay with it.
KANGAS: Look at the winner you've got, Fidelity China Region (FHKCX) up 57.3 percent. This is where you would put your funds over in Asia now?
JIMERSON: Absolutely. And that represents the whole country and that whole region. So there's an opportunity to be diversified, focused on China, which is like the U.S. of the 1960s.
KANGAS: OK. There was a third recommendation you made back in May, RYDEX Series Trust - OTC (RYDCX), this is a NASDAQ high-tech sector, basically, right?
JIMERSON: Correct. And that was a great buy during the summer. Now it's time to stand aside.
KANGAS: Oh, so now you're out of that?
JIMERSON: Yes.
KANGAS: How about some new recommendations, Doug?
JIMERSON: Well, I think right now the buy is China. So go with that Fidelity China Fund.
KANGAS: The same one that you recommended back in May?
JIMERSON: Absolutely. Look at the momentum.
KANGAS: I know, but you're not afraid of that huge, massive run up?
JIMERSON: There are going to be setbacks. It's going to be volatile. That is a volatile fund but I would stay with it because that's a real, a story of an economy that is really growing.
KANGAS: OK, let's move on to another recommendation.
JIMERSON: And then as we look to Asia, we see that Japan has been lagging for quite some time.
KANGAS: Pretty choppy performance in this fund (FJPNX - Fidelity Japan).
JIMERSON: Correct. And that's why this is an opportunity because I, I think that Japan is undervalued. I think we'll see the yen continue to strengthen. I think that's an opportunity for investors for the long term.
KANGAS: All right. How about a third recommendation?
JIMERSON: Thirdly, we like Bucyrus (BUCY) which is a mining equipment manufacturer. It goes along with that Dennison theme. And what we're doing here is investing in a company that is supplying these mines in countries like China and Australia, that are rich in natural resources.
KANGAS: So Bucyrus is based in the U.S., but does a lot of international --
JIMERSON: .prospering from the international business as we see.
KANGAS: OK. We have a minute left. Any further thoughts you'd like to impart to our viewers?
JIMERSON: I think we have to remember that just as we think in real estate, location, location, location, think in those terms in today's investment environment in the way you invest. The U.S. is not the location to be right now. Real estate is weak here. That's going to continue to drag on our economy.
KANGAS: How about Europe?
JIMERSON: Europe is beginning to slow. And it is more tied to what our growth is. So I think we need to look to Asia. And at the same time, I think we need to be very careful about the areas that have had big runs.
KANGAS: And diversify widely in Asian investments.
JIMERSON: Correct.
KANGAS: Do you personally own any of the securities we mentioned earlier or have any other disclosure about them to make?
JIMERSON: No, I do not.
KANGAS: OK. All right, very interesting things that you've had to say to us this evening. It's always good to have you with us, Doug.
JIMERSON: Thanks a lot, Paul.
KANGAS: My guest, Doug Jimerson of "National Trendlines."