Mark Skousen: Stocks are Better Than Gold Right Now

By on May 3, 2012

Mark Skousen - Forecasts and StrategiesLong-time newsletter (Forecasts and Strategies) writer Mark Skousen was interviewed on the Nightly Business Report last Friday. Skousen was optimistic on the stock market, while downplaying the prospects for gold.

Skousen said the gold market looks tired with technical indiators showing a topping out pattern. He sees the era of excessive government spending and borrowing gradually coming to an end, with politicians moving towards austerity, which is bad for gold.

Skousen said less government spending is good for the economy and indicated it shouldn’t be an important drag on GDP; as was extrapolated from the recent government report.

In the equity market, Skousen is observing a “sea change” with corporate profits being strong, along with cost cutting occurring.

When asked to comment on attractive stocks, Skousen mentioned Corning (GLW), which he considers a turnaround story. Skousen said the LCD market has been very weak, but GLW is diversifying and recently beat expectations. He added that GLW is a great play on Apple’s iPad and iPhone and they have a joint venture with Samsung.

Skousen also likes Methanex (MEOH), producer of methanol, the simplest of alcohol; wood alcohol. Skousen indicated it was still at a reasonable valuation after a strong move; selling at a PE of 9-10, with a strong balance sheet. Skousen added the company plans to pay off their debt in the future.  Skousen concluded MEOH was a great way to play cheap natural gas because natural gas is the main component where methanol comes from.

The interview continued with a review of Skousen’s previous recommendations SeaDrill (SDRL), up 12%; Enterprise Products Partners (EPD), up 14%; and American Eagle Outfitters (AEO), nearly 32 percent higher. Skousen said he still liked all three stocks while he considered AEO more risky than the two energy plays. He disclosed he only had positions in SDR and EPD, but would add the others after the show.

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