Investment trend ‘reversing’

 

After plunging since 2011, all commodities – especially agricultural commodities – that don’t depend on industrial production and capital spending will increase in value. 

Prices of precious metal – from gold to silver and platinum – will also increase in value relative to paper currencies.

“Since an ‘inflationary depression’ would occur simultaneously with an increase in interest rates, financial asset prices will decline in value,” he said.

Faber is the publisher of the “Gloom Boom & Doom Report” newsletter and director of Marc Faber Ltd, which acts as an investment adviser and fund manager. He believes the concerted acts of central banks around the world – which have printed money that has inflated asset prices and benefited the rich at the expense of the poor and salaried workers, whose incomes in real terms have actually declined – are not sustainable.

Faber is keen on the Singaporean and Russian stock markets, as well as some gold-mining shares, and Macau gaming stocks, all of which have plummeted in value recently.

“For Thailand, there is nothing to be bullish about. You can’t be very optimistic” about Thailand, he said with a grin. “But what investors have realised is that Thai stocks are reasonably priced. 

“Second, what many investors have not realised is that Thailand sits on foreign reserves that in percentage of the population are larger than China’s,” he said.

Thai infrastructure funds and Thai agriculture and food stocks are interesting, since commodity prices have bottomed out and a lot of consolidation will occur in the industry. 

Likewise, the Thai private-hospital industry is likely to consolidate further to eventually only three major chains.

“I don’t think they [Thai stocks] will go up a lot, but downside risks aren’t high, because Thai companies are paying good dividends,” he said.

However, Thai companies, especially in the retail industry, are not internationally competitive and will be “killed” if Chinese or other foreign companies are allowed to come in on an equal footing.

Investors should split their investment equally in real estate, cash and bonds, precious metals like gold and platinum, and stocks. 

Oil will stabilise at US$35-$60 a barrel and will not fall to $10-$20, he predicted.