Gold captured the attention of investors around the world in 2009 as it soared past $1200 before dipping recently. Heading into 2010, gold remains a favored "alternative" asset for individuals, institutions and central bankers alike who are looking to hedge against further weakness in the dollar, or a revival of the credit crisis.

But James Altucher, managing partner of Formula Capital, says you should be looking at alternatives to the alternative.

"I'm so bored of gold already - it's just a rock," Altucher says in the accompanying video. "I don't like betting on things where there's just one premise - ‘everybody's going to panic so let's buy gold'."

Instead, Altucher recommends stocks that are both correlated to the price of gold and have upside potential based on their own fundamentals. His favorites:

• Cash America: Pawn shops enjoy the "best business model on the planet" - charging borrowers high rates and holding onto their collateral, Altucher says. These days, that collateral is often gold, which the pawn shop acquires at levels far below spot market prices and then can sell if (and when) the original owners fail to make debt payments. "As gold goes up so does the asset value in [Cash America's] safe," he says, noting the company trades at a P/E of less-than 10 times expected 2010 earnings.
• Telecom Corp. of New Zealand: What does a New Zealand phone company have to do with the price of gold? Well, the New Zealand kiwi is the currency most closely correlated to the price of gold, Altucher says, in part because of the country's proximity to Australia, a major gold producer. What's good for gold is good for Australia, which is good for New Zealand and its primary telephone company. Telecom Corp. of New Zealand also boasts a 10% dividend and a P/E of 7. "It's just dirt cheap," Altucher says.

Both companies, he says, give you an indirect exposure to more upside in gold prices and much more...

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With markets still rallying from March lows, it's easy to wonder if the window is closed for investors who've been waiting on the sidelines.

Not so says our guest, Lynn Tilton, founder and CEO of Patriarch Partners, a private equity fund with more than $7 billion under management. The fund focuses on distressed assets. With the recession in full swing, there are plenty of businesses and name brands available at affordable prices.

 "We're seeing a tremendous opportunity in companies that have got beaten down," Tilton tells Aaron. "Buy for the long term." 

For example, Patriarch recently acquired a majority stake in Dura Automotive. Beyond the auto-parts sector, she's interested in beauty products and boat companies.

"I figure if I can add up all the boys' toys before I die, I win," Tilton says.

She's also bullish on gold, which she began buying in the summer of 2007. Unsure if the banking sector was going survive the crisis, Tilton says she hoarded gold to ensure she could pay her employees.

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From The Business Insider, Dec. 14, 2009:

Nouriel Roubini's nickname is "Dr. Doom," but unlike other noted doomsayers who warn about massive debt and deflation, he's a Keynesian. So his views are more in line with the likes of Paul Krugman -- more spending, please -- than many of the uber-bears with whome he's frequtnly lumped in.

And like other Keynesians he's not a gold bull. Remember, Keynesians believe in the curative power of paper money.

On Friday he dropped a roundhouse kick on the gold bulls with a post at Roubini.com about "The New Bubble in the Barbous Relic that is gold."

Via ZeroHedge, here are his five reasons why gold is toast:

First, the dollar carry trade may at some point unravel, popping the global asset bubble that this carry trade has fueled.

Second, central banks will eventually need to exit quantitative easing and effectively zero policy rates, which will put downward pressure on risky assets including commodities.

Third, bouts of global risk aversion may occur as the global recovery may turn fragile, anemic and subpar, thus leading to a rise in the U.S. dollar that would drive down prices of commodities and gold in dollar terms.

Fourth, since the carry trade and the wall of liquidity are causing a global asset bubble, some of the recent rise of gold is also bubble driven by herding behavior and momentum trading, pushing gold higher and higher. But all bubbles eventually crash and the bigger the bubble the bigger the eventual crash.

Fifth, the effect of rising sovereign risk on gold prices is ambiguous, as the events of recent weeks suggest. A risk in such risk could...

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Stocks soared Friday morning following the release of a much stronger-than-expected November jobs report, with the Dow trading as high as 10,516 intraday. But the rally soon reversed and major averages closed well off their highs of the day after spending some time in negative territory midafternoon.

The Dow Jones industrial average, up more than 150 points at its intraday high, ended up 22.75 points to 10,388.90. The Nasdaq Composite Index rose 21.21 points to 2,194.35.

The jobs data spurred strength in the dollar and accompanying fears of a Fed rate hike sooner vs. later, which many cited for the stock market's decline, as well as a huge swoon in gold, which tumbled more than $60, or 5%, to $1156.60 per ounce.

Bernie Schaeffer, chairman of Schaeffer's Investment Research, says it's way premature to start worrying about a Fed rate hike and sees "no fundamental reason" for the dollar to keep rallying. As a result, he believes the rallies in both equities and gold will resume in the not-too-distant future, while noting there's important short-term technical resistance at 1200 on the S&P and 600 on the Russell 2000.

"I would be a buyer," Schaeffer says, expressing particular favor for retail stocks. He recommends...

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While Wall Street was in ruin last year, John Paulson was laughing all the way to the bank thanks to his $20 billion bet against subprime and banks. Almost instantly, Paulson, who was something of a Wall Street unknown, became one of the richest men in hedge fund history.

Today, he continues to bet big. However, in a strategy shift he's actually buying banks now. Paulson this year has bought a significant stake in banks, including Bank of America, which he expects to nearly double by 2011, as well as Citigroup.

Paulson's other big gamble is less contrarian than those in the recent past. Even with gold reaching new highs on a daily basis, Paulson plans to open a gold fund in January 2010 and invest up to $250 million of his own fortune in it, as detailed in a recent Wall Street Journal article.

Already a major shareholder in miners AngloGold Ashanti and Kinross Gold, Paulson thinks there's plenty more money to be made in gold, according to our guest Gregory Zuckerman, author of “The Greatest Trade Ever”.

Zuckerman notes two primary reasons for Paulson's confidence in the trade...

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Emerging markets and commodities were among the biggest ETF winners this year. Problem is, many investors are still spooked by the market's upheaval in 2008 and early 2009, and sitting on the sidelines, despite the run up since March.

"Right now, the average investor doesn't feel real good about the markets here in the States and don’t even know a lot about the markets overseas," says our guest, Tom Lydon, president of Global Trends Investments, and editor of ETF Trends.  "The sad thing is most investors here in the States don’t have enough exposure to emerging markets."

That's true, Lydon says, even though the iShares MSCI Emerging Markets Index (EEM) and Vanguard Emerging Markets ETF (VWO) are each up about 100% since March 9. 

The concern is ETF inflows will mirror mutual fund flows -- with investors chasing performance and ultimately riding down the once "hot" assets. "Most investors buy when they feel real good about it," Lydon cautions.

So is the emerging market bubble about to burst? ...

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From The Business Insider, Dec. 1, 2009:

Gold has finally surpassed the $1200/oz mark.

But it may be going much higher. China is going to increase its holdings signficantly, according to Breakfast With Dave, Gluskin Sheff's analyst newsletter with David Rosenberg.

So significantly, in fact, that gold could hit $2623/oz in the near future.

From Breakfast With Dave:

Gold just capped off its best month in a year — up 14% in November and 34% so far in 2009. Not even the S&P 500 can compete with that. Helping drive the latest gains was the news out of the China Gold Association that the country’s gold demand is on pace this year to exceed 450 metric tonnes, a 14% increase over the 395.6 tonnes in 2008. (In contrast to India, jewelry sales are up double-digits in China so far this year.) By way of comparison, China, which recently surpassed South Africa as the world’s largest producer, is on its way to 310 tons of newly mined output this year, or more than 30% below its level of demand.

It’s not just the middle-class in China that is starting to buy gold...

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Gold soared to yet another new record overnight as the dollar slumped again after Tuesday's release of the minutes of the Fed's Nov. 3-4 meeting.

While FOMC members raised concerns about "negative side effects" from a zero rate policy -- including (duh) "excessive risk-taking in financial markets" -- the bottom line is the central bank's pledge to keep rates low "for an extended period" is giving a green light to speculators to short the dollar and invest in "risk assets."

Those assets include commodities like gold, which broke above $1180 per ounce Wednesday morning, and global stocks. After a big rally in Asia overnight and more modest gains in Europe, major U.S. averages opened higher before flattening out in light, pre-holiday trading.

Heading into the Thanksgiving weekend, there's a general sense that a combination of excessive government stimulus and money managers' "performance anxiety" will keep the rally going into year-end, at least.

But as Henry Blodget notes in the accompanying clip...

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As the stock market continues its winning streak from March levels, cries against the evil speculators and short sellers have subsided -- for now. If any cracks in the recovery story emerge, beware of attacks against short sellers, says Robert Sloan, managing partner at S3 Partners. The firm offers outside financing for hedge funds and manages about $53 billion in assets.

Blaming shorts during bad financial markets is "a convenient way to take a very complex problem and isolate it," says Sloan, author of a new book, Don't Blame the Shorts: Why Short Sellers Are Always Blamed for Market Crashes and How History Is Repeating Itself. "It becomes very easy to encapsulate all our ills into one financial instrument and it just so happens that since the Depression it has been short selling that's been the repository of that blame."

Part finance book, part history lesson, "Don't Blame the Shorts" offers historical perspective on the controversial trading practice, and shows how America's distaste for speculators dates back to the Founding Fathers. (In short selling, investors sell securities or futures they don't own, but hope to buy back later at lower prices.)

During the 1930s, for example...

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From The Business Insider, Nov. 10, 2009:

According to an interview with Hard Assets Investor (HAI), Peter Schiff doesn't want the U.S. dollar to be a reserve currency, and doesn't want any other paper currency to replace it either.

Thus the discussion about which currency might replace the dollar is moot.

Even a basket of currencies managed by a global organization is out of the question since as a staunch libertarian Mr. Schiff is against most organizations which aren't motivated by profit.

Thus he reiterates his support for a gold standard.

HAI:Schiff: Well, the gold standard works. What we have now does not...

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Read the full HAI interview here.

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