Marc Faber's always interesting (and highly recommended, but rather expensive) "The Gloom, Boom & Doom Report" of January 2013 starts with a common subject, how bad economists have performed:
"Too much time has been spent on constructing econometric models and too little on thinking about how the economy works".
Another favourite subject, the huge decline in purchasing power of the USD against gold. Between 1800 and 1933 the price was quite stable, around USD 20 per ounce, then until 1970 about USD 35, after which the price exploded (after leaving the gold standard) to now around USD 1,800 per ounce.
Another observation: the extremely low current yield on USD Long-Term treasuries, the last time that happened was in 1946 (2.1%), in 1980 they were 14%.
Faber is bullish about stocks from Vietnam and China since they have lagged the other markets, the latter one through Hong Kong listed shares. Some examples are Hang Seng Bank (0011), Swire Pacific (0019), Sun Hun Kai (0016).
In Singapore Faber owns a host of REIT's: Ascendas, Ascott, CapitaCommercial, CapitaMall, CDL Hospitality, First, K, Fraser Centerpoint, Mapletree Logistic, Parkway Life and Suntec.
In Malaysia he prefers: Fraser & Neave, Berjaya Sports, BAT, Guinness, Carlsberg, JTI, PB Bank, SP Setia and Hektar Reit.
This is more meant as a shotgun approach, buying a large basket of holdings in SE-Asian stocks, readers should do their own homework, as usual.
Last year was a wonderful year for investors who were long equities. The S&P 500 is up by 12%, many Asian markets are up by 20 to 30%. Bond investors also achieved gains of 10 to 15%. Agricultural commodities are up by 25%. Faber doesn't see similar gains for 2013 and recommends a defensive strategy.
In its latest property sector report, Maybank Kim Eng named its top picks as CapitaLand, CMA and Keppel Land "for their diversified business models with China exposure" as well as Wing Tai and Ho Bee "for their exposure to Singapore’s high-end residential segment."
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