Best Stocks for 2008: Timing expert goes for US Dollar Index Bullish (UUP)

Posted Dec 27th 2007 1:00PM by Steven Halpern
Filed under: Major Movement, Indices, Newsletters, Mutual Funds, Stocks to Buy, Housing, Best Stocks for 2008

For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"My top pick for 2008 is the PowerShares U.S. Dollar Index Bullish (ASE: UUP)," says seasonal timing expert Sy Harding in his Street Smart Investor.

"The US dollar has been in a frightful decline against most global currencies for six years now. Its decline has served the US economy well. Among other positives, the weaker dollar made US exports less expensive for foreign consumers, while making imports more expensive for US consumers.

"That has been a win-win situation for US manufacturers in a period when US manufacturing has been a struggling sector of the economy.

"The weaker dollar has made travel to the US, and shopping here, a happy experience for foreign travelers. Without purchases of second homes by foreign buyers, the plunge in the housing market would have been even more severe.

"Throughout its decline Washington has claimed that a strong dollar would be in the best interests of the US. But of course it would not have been, so Washington did nothing about the dollar's decline.

"However, at this point the decline has gone too far. Its negatives have begun to offset its positives. Foreign countries have been holding much of their capital reserves in US dollars for decades, but have been making noises, even threats, to shift some of those reserves to other currencies.

"Oil is priced in US dollars, and the relentless decline in the value of the dollar has oil-producing countries threatening to switch oil pricing to euros or some other currency. Such events are the last thing the US needs at this point in its struggles to maintain its influence in global economics.

"Technically, the dollar is very oversold on the charts, and investor sentiment for the dollar is at rock bottom. Those are conditions that are usually in place at important lows in any market.

"I expect the dollar to rally substantially in 2008, boosted by positive actions by Washington and global central banks, accelerated by dramatic reversals of short-selling and other bets against the dollar by hedge funds and international currency traders."

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Reader Comments (Page 1 of 1)

2-02-2008 @ 6:10AM

Richard Wicks said...

You know, I find somebody I NEVER heard of pumping some piece of crap fund or stock, the fund or stock plumets, I never hear of him again.

Anybody watching UUP?

Freaking "free media", you get what you pay for. In this case, you're getting paid to read a bunch of propaganda.

3-12-2008 @ 10:24PM

Andy said...

Funny I just found this article. What a complete bunch of BS propaganda this article is, unless the unfortunate soul who wrote it actually believes what he is saying. In which case he is a fool.

Wake up folks! The "Greatest Generation" sacrificed bravely for their children, the "Boomer Generation" and gave them the greatest industrial and military power in the world.

What have the Boomer Generation done with this gift for their children and all future generations?

They have squandered it!! They hollowed out the industrial base that was the engine of our economy and replaced it with a ponzi scheme of shadow banking and "services" that produce nothing of real value. The day of reckoning is fast approaching, and many future generations will pay for their short-sighted greed.

12-18-2007 @ 8:16AM

Brad said...

I think it is a long stretch to say that the recent decline in the dollar has helped the U.S. economy. The first principal in any successful business is to buy low and sell high. This directly conflicts your statement that the decline in the dollar has served the U.S. economy well. How are we supposed to flourish in our economy if we are paying more for imports and recieving less compensation for exports than ever before? Furthermore where does the national debt factor into your theory of how decline in the dollar has helped the U.S. economy?

1-29-2008 @ 6:37PM

Peter Duke said...

If I may offer my view of the issues you bring up Brad, the declining dollar does indeed help our economy in several ways. I know you bring up the fact that imports will cost us more, but the positives are substantial. We will export more of our goods which are cheaper in terms of our trading partner's currencies and we will import less which helps reduce our huge trade deficit. As for the national debt, the falling dollar is great for a debtor nation such as ours, for it makes the debts we incurred (in pre-2008 dollars) cheaper to pay off in depreciated dollars. If the situation persists much longer however, than costs of credit will rise and rising inflation will become the greater threat.

2-02-2008 @ 6:13AM

Richard Wicks said...

Peter, I just would like to hear you explain what the United States produces, now that the boomer generation destroyed our manufacturing base for a quick buck, and how this is good for a nation of professionals and service laborers, which is all that is left?