Barron's Ronudtable 6/15/2009

sds

Anybody interested in the recent Barrons Roundtable,  access for some reason is free:
http://online.barrons.com/article/SB124474397599607023.html

dividend_growth

这几年看下来Felix Zulauf和Marc Faber最厉害，他们多空的pick都赚钱。

Merryl Wittmer的股要么大发，要么一塌糊涂。

不能跟Fred Hickey，这家伙的timing太差，前几年跟他烧AAPL和RIMM的都死了好几回。

littletiger

这几年看下来Felix Zulauf和Marc Faber最厉害，他们多空的pick都赚钱。

Merryl Wittmer的股要么大发，要么一塌糊涂。

不能跟Fred Hickey，这家伙的timing太差，前几年跟他烧AAPL和RIMM的都死了好几回。
dividend_growth 发表于 2009-6-13 15:09

FELIX ZULAUF

Barron's: What is the view from Europe, Felix?

Zulauf: The structural forces in the global economy are unchanged from the past few quarters. A long-term imbalance remains between overspending in the U.S. and over-producing in China. The financial crisis was the start of a move to greater balance that implies lower growth for both sides. The deleveraging process also continues in many economies, with the exception of the U.K.. This process has only started. It will run for several years. We are shifting debt from the private sector to the government sector, which will lever up. These structural forces will continue to be a major restrictive factor in the world economy. In the cyclical arena, things look a little better, but not as good as you might think from the media reports.

So, fewer green shoots?

The green shoots are primarily the result of inventory restocking. Inventories have been cut around the world, and in Asia they have been cut to the bone. Now production is ramping up to get in line with demand. Inventories are being restocked in many industries. The process is far along in technology, but way behind in capital goods. The U.S. economy will look a little better in the next two to three quarters, due to inventory restocking and fiscal stimulus. But the improvement won't continue after mid-2010, when the economy turns bumpy again.

In Europe, Germany has structural problems, but virtually no cyclical imbalances. It is one-third of the European economy. The weaker parts of the Eurozone -- Portugal, Ireland, Greece and Spain -- are trapped in a Euro-denominated system and should devalue their currencies to help their economies. They can't, and therefore will deflate. They'll be the poor guys for the next 12 months. The U.K. hasn't even started to adjust. Consumers there continue to borrow and spend. In the next year they will go through the same thing U.S. consumers have gone through.

Felix Zulauf's Picks
    6/10/09  
Company  Ticker  Price  
EMERGING MARKETS*   
iShares MSCI Emerg Mkts Index  EEM $33.57
iShares MSCI Hong Kong Index  EWH 14.26
iShares MSCI Singapore Index  EWS 9.45
NATURAL RESOURCES*   
SPDR S&P Metals and Mining Idx.  XME 41.76
Oil Services HOLDRs  OIH 111.18
Energy Select Sector SPDR  XLE 52.97
Gold (per ounce)**   954.00

*Buy after 15% correction from current prices.
**Buy when price drops back to around $850.
Source: Bloomberg What about Asia?

Asia is the major beneficiary of the inventory-restocking cycle here. It will have the best production numbers, much as it had the worst declines before. The pick-up will run into the middle of next year. China is the big exception. It decided to breach the global economic slump by subsidizing production and employment. It is playing a dangerous game.

The real danger comes from mid-2010 through 2011. This won't be a conventional business-cycle expansion, but a bumpy road. The economy will look like a square-root sign followed by corrugated sheet iron. The good news is the potential collapse of the system has been avoided. It was an open question for a while.

What does a corrugated-sheet-iron economy mean for the markets?

Governments and central banks will continue to support the economy. Short-term interest rates will stay low. Government-bond yields are rising for cyclical reasons. Around the start of this year, 10-year Treasuries were yielding 2.25%. Now yields have risen to 3.94% and could go to 4.5%. They won't go beyond that because the economy won't be robust. The bond market is normalizing after the threat of systemic collapse. Bonds aren't attractive.

Investors are underinvested in equities. Money-market funds are bigger than ever when expressed as a percentage of global equity capitalization. That money is yielding virtually nothing, and a lot of it is in the hands of professional portfolio managers who have to perform. Eventually it will get redeployed into equities, which means economic and market developments for a time will move far apart. The market undershot into March, and will probably overshoot in the first half of next year. The first rally is just about done. The market might climb into July, but it will correct in the fall, with stocks retracing maybe 50% of the recent advance. That will provide an opportunity to buy for a rally next spring or summer. That's the whole mini-bull market. Economic conditions won't support more than that.

Are you still looking for a low in 2011 or 2012?

Yes. We'll enter another bear-market cycle. I don't know how low it will go. In March the market made a cyclical low in valuation, but it wasn't a secular low. When the market makes a secular low, lack of interest in equities will be high.

Previously I advised buying financials and metals. Now the financials are done, perhaps for a couple of years. Bank balance sheets aren't repaired. It's just camouflage. Today I like emerging markets and natural resources -- after a correction of 15%. Investors believe in the long-term prospects for emerging markets, due to demographics and structural issues. That's where the money will go that is on the sidelines. Among ETFs I like the iShares MSCI Emerging Markets Index, the iShares MSCI Hong Kong Index and the iShares MSCI Singapore Index. In energy I like the SPDR S&P Metals and Mining Index, and in oil services, the Oil Services HOLDRs and the Energy Select Sector SPDR . Again, buy on corrections. Also, you have to own gold because governments have no solution but to reflate. Currencies will be debased, and gold will go higher. But don't buy bullion until it drops to around $850 an ounce. It is $950 now.

littletiger

MARC FABER

Barron's: What a rally, Marc. Are stocks due for a rest?

Faber: The S&P 500 has risen more than 40% from its March 6 low of 666. It could correct soon, maybe from higher levels. If it rallies to 1,000-1,050 by July, that could be the high for the year because the index is not inexpensive. But we don't see new lows. The 666 low is likely to hold, as is the Nov. 21, 2008, low of 741. The market won't fall below 800 for the time being.

It is hard to know what happens in the next year because so much economic and financial volatility has been created by huge fiscal deficits and expansionary monetary policies. Governments can support economic activity through fiscal deficits. What concerns me down the line is the likelihood of much greater inflation because of all this stimulus. At some point the Federal Reserve will have to increase interest rates to combat inflation, and it will be very reluctant to do so.

But that's not today's problem.

Today the economy looks to be stabilizing after falling off a cliff. It probably troughed in February or March. Replacement demand is kicking in, but we won't return to the peak activity of 2006 any time soon.

If things deteriorate, the Fed will print more money. Mr. Bernanke talked a few years ago about dropping dollars from helicopters to stimulate the economy. It would be wrong not to take this statement seriously because that is the thinking among policymakers in the U.S. It is a disastrous policy but it can really make stocks go up -- commodities, too. Since the lows in December, oil is up more than 100%. A lot of liquidity has flowed into commodities, which is a sign investors are concerned about the value of paper money.

Emerging markets have been especially strong. Are the gains justified?

The opportunities are far better than in the U.S. When hedge funds and funds of funds had massive liquidations last fall, Asian markets such as Taiwan, South Korea and Japan fell to generational lows. Investors should use setbacks in these markets to accumulate shares. Many stocks are yielding between 6% and 10%. Secondly, the world is undergoing a major shift in consumption. In March car sales in emerging economies began to exceed those in developed countries. China, Brazil and India have become important simply because of the size and growth of their populations.

Marc Faber's Picks
   6/10/09  
EMERGING MARKETS  Ticker  Price  
SINGAPORE  
Parkway Life REIT  PREIT.Singapore S$0.96
ARA Asset Mgmt  ARA.Singapore 0.60
Hyflux Water Trust  HYFT.Singapore 0.52
Raffles Education  RLS.Singapore 0.68
Kingsmen Creatives  KMEN.Singapore 0.43
THAILAND      
MCOT  MCOT.Thailand 18.50 baht
Dynasty Ceramic  DCC.Thailand 17.90
Airports of Thailand  AOT.Thailand 27.75
Thai Airways Int'l.  THAI.Thailand 14.00
JAPAN      
Mitsubishi UFJ Fincl  8306.Japan ¥640
iShares MSCI Japan  EWJ $9.42
RESOURCE    6/10/09
COMPANIES  Ticker  Price  
Xstrata  XTA.Switzerland 13.60 CHF
NovaGold Resources  NG $4.66
Natural Gas (per MMBTU)  3.71
   6/10/09
SHORT    Yield
10-Year U.S. Treasury notes,
when the yield falls to 2.8%-3%    3.94%
  

Source: Bloomberg There has been renewed interest in asset plays of all types. Stocks like Newmont Mining [NEM] and Freeport-McMoRan Copper & Gold [FCX] have soared. Along the same lines, there is renewed interest in Asian real estate, which isn't expensive. Prices are lower than they were in 1997. I like Asian REITs [real-estate investment trusts] such as Parkway Life in Singapore and ARA Asset Management, a Singapore property-management company. Hong Kong and Singapore will benefit from greater regulation of the financial markets in the U.S. and Europe. Also, the U.S. has large and highly sophisticated military installations in Singapore, and it doesn't want to antagonize Singapore.

That should bode well for Singapore-based companies.

Demand for water is a big theme in Asia. Singapore's Hyflux Water Trust pays out income earned from operating water-treatment plants. Education is a growth industry, as well, and Raffles Education should benefit. Also in Singapore, I like Kingsmen Creatives, a marketing and communications-design company. In Thailand I like MCOT, a media conglomerate, and Dynasty Ceramic, which makes floor tile, as well as two airline-related companies -- Airports of Thailand and Thai Airways International. In Japan I like Mitsubishi UFJ Financial and the iShares MSCI Japan fund.

You've been a big fan of resource companies. Are you still?

Mining companies such as Switzerland's Xstrata are good trades. The company got hit hard last year because it operates on leverage, but the concern was overblown. I like NovaGold Resources . Barrick Gold [ABX] tried to buy them for about $15 a share a year ago. There was no deal and NovaGold fell below 2, although it has rebounded to 5.50. NovaGold has enlarged its asset base significantly. Today it is even more valuable than $15. Natural gas is a buy here. It is extremely depressed and at a record low compared to oil.

I would short U.S. Treasury bonds when the yield declines to 2.8% to 3% on 10-year notes.

reffo

dividend_growth

在通涨情况下，新兴市场，商品期货，小型成长股都会表现良好的；

存款，债券，美国的大型老太太股都没戏。

trueself

在通涨情况下，新兴市场，商品期货，小型成长股都会表现良好的；

存款，债券，美国的大型老太太股都没戏。
dividend_growth 发表于 2009-6-14 14:44

yuelm2008

good

janez

many thanks for posting.

ppjeep

ding