O'Neill:"the country is on the edge of a golden age of prosperity"

verfasst von BossCube, 27.06.2001, 10:06

OUTSTANDING INVESTMENTS E-ALERT
Jive Talking
June 26, 2001


Dear Outstanding Investments Reader,

"The lady doth protest too much, methinks," wrote
Shakespeare. So too does Treasury Secretary Paul O'Neill.

This past Sunday on ABC's"This Week", O'Neill pronounced
that the current economic slowdown is an"adjustment
period." But O'Neill also said that the country is"on
the edge of a golden age of prosperity," and added,"we're
not doing badly for the kind of correction that we're in
right now."

It always makes me nervous when people tell me not to be
nervous. Imagine yourself flying across the Atlantic and
you hit some turbulence. As you are bumping along trying
to keep your food atop those crummy little trays, the pilot
comes over the intercom and says:"Everybody be calm. The
plane is holding up well considering the conditions."

Most disconcerting is that past stock markets have
unraveled on the heels of public assurances. In early
1929, after the markets had gone through a choppy period
and just months before the worst stock market crash of the
20th century, Bernard Baruch said the following to an
interviewer for American Magazine:

"For the first time in history, we have sound reason to
hope for a long period of peace. For the first time, the
business men of all nations are supplied with statistical
information, together with some understanding of the laws
of economics. For the first time, we have sound
centralized banking systems in all the countries and closer
cooperation between those systems internationally. Because
all these factors are favorable, and because of the
universal stirrings of desire and ambition... I believe in
the industrial renaissance."

Knowing that Baruch, one of the great speculators of his
time, was already shorting stocks during that period, I
began to wonder about this quote. Lynn Carpenter, editor
of The Fleet Street Letter, explained it to me.

"At one point," says Lynn,"the government supposedly
asked Baruch to talk up the economy."

And you don't have to go all the way back to '29 to find
examples of talking up the market or the economy. In the
late-'80s I had some inside information that the Savings
and Loans were on the brink of collapse. Yet you could
hardly go a day without some S&L executive or Bush cabinet
member announcing that the thrift system was rock solid.


* * * * * * * * * * * * * * * * * * * * * * * * * * *

I have received some letters from loyal subscribers
wondering why several of our winning energy stocks have
corrected. The truth is, nothing goes straight up. In
fact, I've been expecting this correction. That is why I
always advise profit taking whenever possible, like I
suggested with some of our picks just recently -- Fox
Energy (FEC: CDNX, C$0.64), Wheaton River Minerals (WRM:
TSE, C$0.79) and Metallica Resources (METLF: OTC BB, $0.79;
MR: TSE, C$1.15) just to name a few.

Remember the biggest bull markets always face setbacks.
Richard Russell calls it climbing a wall of worry. Every
once in a while there is a slip. It happened to gold in
the '70s, blue chips in the '80s and tech stocks in the
'90s. The bottom line is that the fundamentals for hard
assets remain rod iron strong. So, don't fret. The money
supply numbers continue to stoke the flames of future
inflation while summer demand for energy will soon kick in.


And the specific stocks we've examined in Outstanding
Investments are no less attractive for being a little bit
cheaper. To the contrary, savvy investors may want to take
advantage of the"discount pricing" to add to their
positions. Clearly, the"smart money" sees unique value
among hard asset stocks.

On Monday, for example, Barrick Gold Corp. agreed to buy
Homestake Mining Co. in a $2.3 billion stock deal. The
purchase of Homestake will make Barrick the world's
second-largest gold producer. According to Barrick CEO
Randall Oliphant, the merger will save the company millions
of dollars in the taxes and exploration costs. This is just
the latest takeover in the exciting mergers and
acquisitions wave that is sweeping across the resource
stock sector.


Your humble correspondent,

John Myers

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• O'Neill:"the country is on the edge of a golden age of prosperity" - BossCube, 27.06.2001, 10:06