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Sunday, December 1, 2013

The Aden Sisters on Gold, Commodities and Near-Term Market Prospects

Published by The Daily Bell - December 01 2013

the Aden Sisters

the Aden Sisters

the Aden Sisters
Introduction: Mary Anne Aden and Pamela Aden are the co-editors and publishers of The Aden Forecast, a monthly investment newsletter published since 1982 and the Directors of Aden Research. 

Their analysis, which is used by individual and institutional investors around the world, specializes in the US and global stock markets, precious metals and foreign exchange markets, as well as the US and international interest rates and bonds. The Adens have authored dozens of reports and articles, and are speakers at investment seminars around the world. Their work has been featured in newspapers in several countries, in such publications as The Wall Street Journal, Barron's, The London Financial Times, Business Week, Smart Money, as well as CNBC and the international television documentary, Women of the World. Due to their consistent long-term track record, The Aden Forecast was named Letter of the Year in 2010 by MarketWatch. The Adens are sisters, born in California. For nearly 40 years, they have followed the world financial markets daily from their Costa Rican base.

Daily Bell: Hello, there. We spoke some two years ago. Since then, gold's gone down a lot. Did your portfolios suffer?

Pamela and Mary Anne Aden: Hello. Thank you. It's great to be with you again. Our positions are down but we've been buying since 2002 and the price is still much higher.

Daily Bell: Why the big trek to $1300? Manipulation?

Pamela and Mary Anne Aden: Gold turned bearish this year during the second quarter collapse from the $1600 level to the $1200 area. Gold ETFs were dumped at the time. And yes, we believe the market has been manipulated just like the stock market has been.

Daily Bell: You didn't see gold and silver in a bubble last time we spoke. Any follow-up thoughts?

Pamela and Mary Anne Aden: Gold had a good 660% rise for 12 years, but a bubble top has yet to occur. We feel it's still to come.

Daily Bell: At the time we spoke in 2011, we agreed with you that gold had another four years to run. Have you revised that timeline?

Pamela and Mary Anne Aden: All things considered, it looks like we could see a down to lackluster market for the coming year, but then those four years could take over in a big way.

Daily Bell: Is gold going back up? How about silver? Are the two metals still tracking each other?

Pamela and Mary Anne Aden: Yes, gold's fundamentals remain bullish. Demand, for instance, continues growing, especially out of China. And yes, gold and silver are still tracking each other. Even though these markets are very bombed out, they could still fall further before they head higher.

Daily Bell: Is silver a better buy than gold?

Pamela and Mary Anne Aden: Yes. Once the metals get going on the upside, silver will likely outperform gold.

Daily Bell: What about real estate or farmland?

Pamela and Mary Anne Aden: It's generally doing well, thanks to QE. Real estate has become a better investment, depending of course on location. It's a selective market.

Daily Bell: Where are we in the business cycle? If this were the 1970s, we'd guess about 1976. Your thoughts?

Pamela and Mary Anne Aden: It's interesting you say this. We recently showed the similarities in our newsletter between the action in 1976 and today's action. It's very impressive.

Daily Bell: In 2008, your model was 55% cash. Are you in cash now? Equities?

Pamela and Mary Anne Aden: Yes, we're keeping 30% in cash in selective currencies to use as good opportunities arise. We've been invested in equities since 2009. Our current allocation is 50% in equities.

Daily Bell: What are the technicals telling you about the stock market? Is it headed up? How about commodities generally?

Pamela and Mary Anne Aden: The technicals show the stock market could still rise a lot further. Ongoing QE essentially reassures this. Commodities, however, remain under downward pressure, especially agriculture.

Daily Bell: What's your take on Janet Yellen? Is she really going to be dovish as Fed head?

Pamela and Mary Anne Aden: Yes. She has already said so. Plus, she was one of the main designers of the Fed's QE stimulus program and she's determined to boost jobs. So Yellen will not be quick to cut back or taper the Fed's bond buying. On the contrary, the easy money will keep flowing.

Daily Bell: Rand Paul has put a hold on her nomination. Will she make it in?

Pamela and Mary Anne Aden: We're nearly certain she will.

Daily Bell: Is the Fed going to be audited, as Rand Paul wants? Should it be?

Pamela and Mary Anne Aden: It's unlikely but yes, it should be.

Daily Bell: Are you refining your technical analysis at this point? Using any other methodologies? Take us through your analysis and what you're recommending -- individual stocks, or is the market already too pricey for you?

Pamela and Mary Anne Aden: We are always refining our technical tools. We combine these with the fundamentals and it usually works out well. A sample of some of the stocks we're currently recommending are iShares Glbl Telecom(IXP), Mkt Vect Retail (RTH), Nasdaq (QQQ) and iShares Transports (IYT).

Daily Bell: What about overseas recommendations? Any hot spots -- Africa? Asia?

Pamela and Mary Anne Aden: Not yet. The global markets have generally been lagging behind the US market. One big exception is Germany (EWG), which has been very strong, and we've had this in our stable.

Daily Bell: What are some major investment trends these days, in your view?

Pamela and Mary Anne Aden: Stocks are bullish and bonds are bearish. The US dollar is resuming its bear market decline and the global currencies are headed higher. The metals and their shares are bombed out, still vulnerable and near their lows, and commodities are bearish.

Daily Bell: Any more details?

Pamela and Mary Anne Aden: We are invested in the stock market, the gold sector and some currencies. Our favorite sectors have been telecom, retail, technology and transportation. Our country favorite has been Germany. We also like some resource and energy.

It now looks like we're in extreme situations for the time being. That is, gold, silver and gold shares could bounce up while stocks take a breather.

We don't trade in and out, but we do in our trading service. Our stock market recommendations have been our best performers this year.

Daily Bell: What's going on in the Middle East? Why is Syria being destabilized? Finish reading interviewà