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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerThis article is part of a 20 article special report on "Metals, miners and money".
"The Fed's bailout of the mortgage markets has reignited fears of inflation and of a slow-motion meltdown of the dollar," says Mark Skousen, editor of Forecasts & Strategies.
"That makes now a good time to own mining stocks, particularly Freeport-McMoRan Copper & Gold (NYSE: FCX), which made a very smart move in March when it bought Phelps Dodge for $26 billion. The purchase made Freeport the world's largest publicly-traded copper company.
"It now has a huge, long-lived, geographically diverse portfolio of mining assets. And the acquisition of Phelps is producing tens of millions of dollars in unexpected savings. The buy will result in an immediate 30% spike in Freeport's annual sales.
"With Freeport opening a new copper mine in Arizona ahead of schedule this year -- one that will produce at least 240 million pounds of copper per annum -- and the new company enjoying huge new economies of scale, expect this stock to continue its rapid run."
In his specialty newsletter, The Turnaround Trader, Skousen notes, "Most gold stocks have benefited from the rise in gold, but Harmony Gold Mining (NYSE: HMY) has underperformed. It still is down 25% from its high a year ago.
"Harmony is a leveraged South African mining company with additional mines in Australia and New Guinea. With proven gold reserves of 56 million ounces, and given sharply higher gold prices, Harmony could have a significant run up.
"South Africa is a high-cost mining region, so higher gold prices help to grow profits, or in the case of Harmony, create profits for the first time in several years. There's also the possibility that Goldfields or some other major mining outfit will buy out Harmony. Let's take advantage of this undervalued gold play and buy the shares."
Each day, Steven Halpern's TheStockAdvisors.com website features the latest investment commentary and favorite stock picks of the nation's leading financial newsletter advisors.
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