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Why Investors Should Still Own Gold: Strategist

Thursday, 20 Jan 2011 | 11:16 AM ET

Despite gold’s recent correction, investors should still look into ways to get into the precious metal as it will soon see a rally, said Doug Roberts, chief investment strategist at Channel Capital Research.

“If you look at the long-term trends with gold, when real interest rates are negative—that is, short-term interest rates are less than the rate of inflation—that’s where gold’s 'outperform' comes,” Roberts told CNBC.

With the Fed pumping money into the economy, Roberts said the value of the US dollarwill eventually decrease, which should lead to gold’s outperformance.

In the meantime, Mark Travis, CEO of Intrepid Capital Funds said he is in favor of companies that generate free cash-flow yields.

Recommendations:

Travis Likes:

CSG Systems —“It’s about a $600 million dollar market cap with $90 million in free cash flow and a nice balance sheet.”

Regis —“The company has a billion dollar market cap and $175 million in free cash flow,” he said. “They’ve got 13,000 salons.”

Potlatch

Roberts Likes:

SPDR Gold Trust

Gold COMEX (Feb)

Mkt Vectors Gold Miners

Mkt Vectors Junior Gold

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Scorecard—What They Said:

  • Roberts' Previous Appearance on CNBC (Jan. 3, 2011)
  • Travis' Previous Appearance on CNBC (Dec. 9, 2010)

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More Market Analysis & Advice:

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CNBC Slideshows—FYI:

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CNBC Data Pages:

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Disclosures:

Travis and family members own shares of CSGS, PCH and RGS via ownership of Intrepid Funds.

Roberts has ownership interests in GLD, GDX and GDXJ.

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Disclaimer

  Price   Change %Change
CSGS
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GD
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GLD
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PCH
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RGS
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MV J GLD MIN
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