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FP
MONEY |
National
Post, Saturday, January 8, 2005 |
Ing's
junior gold picks have shined |
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| John Ing,
president and CEO of Maison Plcements Canada,
says on a recent visit to China, he wanted
to buy a three-ounce gold bar, but gave up
because the line of customers was to long. |
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Lunch Money, taking
time out fron the zesty seafood antipasto, notes
that gold's move over the past year has basically
been a hedge against the falling dollar, that
investors buying gold with Canadian dollars and
euros are not far ahead in terms of their own
currencies, which have soared against the greenback.
Wouldn't it help gold's case if it were not basically
a play on the dollar, if it could shine on its
own investment merits?
Ingcounters that gold is once again resuming its
traditional role as a "store of value,"
that it will become more valuable as inflation
stirs in response to higher prices for oil and
other commodities. Add to this witch's brew of
growing economicstress the Federal Reserve raising
interest rates, he says, and the stage is set
for gold's rise as investment demand begins to
outstrip supply. To him, it's looking like a replay
of the 1970's when gold had its greatest run to
more thanUS$850.
The recent launch of the Street-Tracks Gold Trust
exchange-traded fund on the New York Stock Exchange
helped stoke investment demand for gold, giving
investors an alternative and popularizing gold
by allowing pension funds, endowment funds and
trust groups, which previously could not hold
the physical metal, to own gold.
Ing, who has just returned from a gruelling business
trip to China, also believes investment demand
from Asia will fuel the price of gold as central
banks, institutions and individual savers - especially
in China - use gold to hedge against the collapse
of the U.S. dollar.
Ing says that when he was in China, he wanted
to buy a three-ounce gold bar being offered in
one city. He didn't because he "would have
to wait in line" for too long, such was the
demand for the bars. And speaking of bars and
the U.S. dollar, he says he wanted to tip a waitress
with dollars because he wasn't carrying any yuan,
but she simply declined to take the currency,
further indiccating the dollar's loss of power.
China's economy may slow down a bit this year,
he says, but not much. There's too much momentum
and too much optimism.
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A 'MARVELLOUS'
OPPORTUNITY TO BUY LAGGARD GOLD
Of
course, for Ing and other gold bugs, optismism
about gold is never in short supply, even
if momentum in the gold market flags. He
notes that gold stocks have failed to cash
in on gold's recent momentum. But he believes
that's about to change.
He says investors have been reluctant to
buy gold stocks because they're skeptical
that the current move up in the price of
the metal is sustainable. But once investors
Realize the gold train has left the station,
he adds, they will stampede into gold stocks
as they did with oil stocks when the price
of oil convincingly above US$40 a barrel.
At this point as we finish off our big bowl
of heavenly gnocchi pomodoro, we mentally
note that bullian's recent retreat from
US$455 probably hasn't helped the case for
gold stocks. But Ing, ever the bull, says
it's a "marvellous" oportunity
to buy these "laggard" stocks.
Maison Placements continues to recommend
Agnico-Eagle, Meridian and Kinross because
of their growth prospects and the likelihood
they'll be involved in mergers and acquisitions
this year. Among the majors, the favorites
are Newmont and Placer Dome. But he believes
the best opportunities are in the junior
producers, particularly Berma Gold, Campbell
Resources and Northgate Exploration. Meantime,
the timing is right for junior explorers
such as White Knight resources and Claude
Resources.
In the past, Maison has had great sucess
with it's junior picks, as detailed in previous
Lunch Moneys with Ing as our guest.
Today's lunch at Da gianni y Maria Trattoria
has been equal amounts of insight, food,
and fun, with Ing as bright as the metal
he champions, despite his jet-lag, and pleased
that we've enjoyed our time at a restaurant
he has also championed.
The bill, including two large bottles of
sparkling water, tax and tip, comes to a
reasonable $79. Maria has made a friendly
fuss of us and we leave feeling well-fed
and better for making such a long trip out
to the far reaches of St. Clair West.
Financial Post
whanley@nationalpost.com |
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Da
Gianni e Maria Trattoria is well off the beaten
track, occupying a double store-front space in a
non-descript section of St. Clair Avenue West far
from Bay Street and anything remotely fashionable
uptown. But John Ing, Chairman of investment dealer
Maison Placements Inc. and one of the Street's most
fervent champions of gold, says the journey is well
worth th effort, a nugget amongst the general neighbourhood
dross.
He's right, Maria
is a charming host and her husband, Gianni,
runs the kitchen serving up fine Italian fare that
mainly its hearty origins to Piedmont in the north.
Maria lets us know that everything is made fresh
every day. To start we order the antipasto di mare,
a seafood appetizer that's plenty enough for two.
Then Ing, who knows his way around the menu, goes
for the ravioli Piemontese, while we opt for the
gnocchi pomodoro. The food is simple and simply
delicios.
No wonder the restaurant does a thriving evening
trade, drawing diners from upscale Forest Hill,
which is not too far away, and beyond. |
And
then there's gold, which was well off the beaten
track for about 20 years but has been drawing investors
as it has climbed in the past few. More recently
though, it has lost some of itslustr after ascending
to a 16 year high of US$455 an once earlier in December.
Yet that doesn't faze true believers like John Ing,
who has been an unwavering gold bug for more than
30 years, "Gold always surprises one,"
he says. "When it looks like it's going to
go to the moon, you get these corrections, Everyone
jumps on the gold bandwagon and they quietly get
off."
Ing concedes he's
been calling for gold to hit US$510 an once "for
a long time now. But we're going to get US$510 -
probably in the first quarter." After that,
he says, it's going to US$700 - likely by the end
of the year.
His faith in that scenerio revolves mainly around
the general lack of faith in the U.S. dollar, Gold's
phoenix-like rise from the investment ashes has
come because of "the dollar, the dollar, the
dollar," which he believes could fall another
25% against the euro.
The main problem
for the dollar, he adds, is the staggering level
of U.S. government indebtedness, which is costing
the treasury roughly US$320-billion in interest
alone every year, and a trade deficit of chasm-like
dimensions. "We know that the only solution
is a lower dollar." |
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Da Gianni & Maria Trattoria
