J. Christoph Amberger: You mentioned the U.S. dollar. We have also seen the U.S. dollar decline from $1.60 against the euro, down to I believe it was $1.46 yesterday. Do you see this continuing?

We just saw Germany, France, Italy report shrinkage in GDP for the last month, if not quarter. Canadian GDP growth is down into the negative numbers. Japan is seeing economic contraction. China even is seeing a shifting in the trade balance. How is this going to play out in regard to the U.S. dollar?

Rick Pendergraft: Andy made a good point about the oil and the impact that the dollar had. One of the things I want to point out is back on July 15th, the SEC had the mandate of not naked short selling; never mind the fact that it’s illegal anywhere. They really mandated that you can’t touch Fannie Mae, you can’t touch Freddie Mac, and these 17 other financial institutions.

When they did that, they manufactured a rally in the dollar. The dollar rallied, but it rallied right back up into a downward slope trend line from a technical perspective. It hasn’t broken through that yet. That was a temporary low for the dollar. It was the high for oil, a high for gold. It was a low for airlines and financials.

So this one move to protect the financials spurred several different rallies and declines across the board. Manufactured rallies don’t tend to work out for very long and until we are in a strong enough economic position for the fed to start raising interest rates, I don’t look for the dollar to break out above its downward trend and to get out of this downward trend that it’s in.

Until that happens I think oil probably maintains that $100 level. Once the dollar starts rallying and can get out of the down trend, then you may see oil pull back below the $100 level. That’s my long-term take on it.

J. Christoph Amberger: How does an investor take advantage of your projection? What would be the stock to buy right now or within the next weeks to leverage this? Is it still good to be in energy stocks?

Andrew Gordon: I don’t think it’s a great idea to invest in the oil majors. The oil majors, in their most recent quarterly reports, had record profits on the back of record oil prices. Not on the back of rising production. In fact, oil production has fallen. So if you take falling oil production with falling oil prices, it translates to flat profits or falling profits.

Until oil companies can figure out a way to raise production rather than just to see the oil production go down a little bit from quarter to quarter and the reserves are, too. I’m very bearish on oil majors. But they realize this, they know this. They’re desperately looking for oil and that means that they desperately need oil rigs and rig contracting companies to help them find oil.

So, the oil rig contractors really have oil companies by the toes. They’re really charging top price for oil rigs. Their day rates are at record highs. I like both the offshore and onshore oil rig contractors. In addition to some of the smaller plays in oil, I like the mid-sized integrated oil company from South Africa, called Sasol (NYSE:SSL). Simply because they are raising oil production and they have the best liquid faction technology in the world.

Also, I think all the countries are looking for alternative to oil because oil simply won’t be able to keep up with energy demand as we go forward. The nuclear industry one of these days is going to see rising prices. Nuclear power plant construction schedules in some of these countries, like China, Russia, South Africa have very ambitious plans. They have to cutback on their plans because of this hiccup in global growth. They’re going forward.

So I think we’re going to see the uranium junior exploration companies and the major producers rise, like Cameco Corporation (NYSE:CCJ). Look at their prices. They’re very, very depressed. This is a great time to go in and make some investments in these companies.

J. Christoph Amberger: Rick, your favorite stock?

Rick Pendergraft: I’m looking at it from two different perspectives. From a short-term trading perspective, I actually recommended calls yesterday on the energy select spider, the Energy Select Sector SPDR ETF (NYSE:XLE). I think we see the bounce in oil that I’m looking for over the next month or two. I don’t look for it to be a long-term; maybe a month or two out.

For the long-term, I think as long as we’re in this recessionary period or slow down economically — it’s still up for debate whether we are officially in a recession –you’ve got to look at companies that are going to see their demand remain the same.

One of my favorites that I’ve been mentioning all year has been American Ecology Corporation (NASDAQ:ECOL). It’s a bio-hazardous waste management company. Regardless of what happens with the economy, the demand for their product and their service is still going to be there and they have a monopoly power in about ten states out west. So that’s the kind of companies I’m looking for in this environment.

J. Christoph Amberger: Rick and Andrew, thank you very much for joining us here today.

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P.S. TFN Financial Roundtable host J. Christoph Amberger is executive editor of Hot Stock Confidential. After taking 42% gains on Nymox Pharmaceutical Corp…. 23% on Emergent BioSolutions Inc… 38% on the first half of his position in this U.S. refiner… and 26.68% on Synta Pharmaceuticals… for an average gain of 32% in August alone, he has just released his current Hot Stock Pick.

Source: TFN Financial Roundtable: Four stocks to buy now!

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