Faber
February-03
Recommended Asian Stocks for 2003
Marc Faber
Below is a lengthy list of equities, which I believe could perform well in 2003. Individuals may do better by having a fund manager looking after their investments because diversification is important in order to reduce the risk. Moreover, the timing of the purchases ought to be considered as well. The themes are, as explained in earlier letters, rising commodity prices, further strong growth in China, India, and Vietnam, and moderate growth of about 4-5% around the Asian region. In particular, as prices for manufactured products and services continue to decline, the consumer markets in Asia will continue to expand rapidly as goods and services become affordable to a larger and larger segment of the population. In turn, this will fuel an increased demand for industrial commodities, which will lift commodity prices and also benefit the stocks of basic industries. In terms of services, which will continue to thrive thanks to their cost advantages and affordability, I am thinking in particular of the Indian software industry and the tourism industry in Asia. Chinese outbound tourists increased last year by 25% to more than 12.5 million travellers and cushioned somewhat the impact from fewer arrivals from the US and Europe, due to fears of terrorism.
As our regular readers will know, I am not particularly optimistic about the US economy, its stock and bond market, and the US dollar. Still, on a relative basis, I like some basic and resource stocks, which are likely to outperform the indexes in the next two to three years. Resource, and especially basic, stocks have under-performed the major indexes until 2000 but have recently begun to outperform. I believe that we are at the beginning of a better relative performance, which could last for several years. In this spirit, I recommend the accumulation of oil servicing and drilling companies such as Schlumberger (SLB), Diamond Offshore Drilling (DO), and IMC Global (IGL), a fertilizer company. In the mining sector, stocks such as Harmony Gold (HMY), Newmont Mining (NEM), Glamis Gold (GLG), Durban Roodepoort (DROOY), Pan American Silver (PAAS), Apex Silver (SIL), and Coeur d’Alene (CDE) should be part of a portfolio. I have to point out that, in the near term, mining stocks may not perform particularly well and may decline 20-30%. Considering the strong performance of gold, these shares haven’t acted well recently and failed to exceed their highs in 2002. This technical non-confirmation raises a warning flag. As a play on rising grain prices, the Argentine company Cresud (CRESY) - could be used, as well as global agribusiness and food company Bunge (BG).
gloomboomdoom.com
I placed a sell at 2.52 it spiked back there but my trade didn't go over. I also tried to sell at 2.5, 2.46, and 2.43! I think gold might eke up a buck tonight for a shot in the morning. |
