Faber: Some Stocks Still Worth Buying

Friday, 19 Aug 2011 02:37 PM

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Perhaps surprisingly, consistently bearish Gloom, Boom & Doom Report editor and investor Marc Faber still advocates buying stocks.

 

“I happen to feel that somewhere in the world we can make 7 percent on equities for the next 10 years,” Faber tells MarketWatch. “I can buy you a portfolio of high-dividend stocks in Asia that would have a yield of 5-to-7 percent.”

 

“It would be very dangerous to say ‘I don’t trust stocks, gold, real estate, I want to keep my money in cash,’” says Faber. “That’s a way to end up losing a lot of money.”

 

Faber’s own stock portfolio is centered on dividend-paying Asian shares, particularly in Malaysia, Singapore, Thailand and Hong Kong. These include a variety of real estate investment trusts and utilities.

 

Faber is also positive on Japanese banks, brokerages and insurance companies.

 

“They have a better loan portfolio than the European banks,” he says about Japanese banks. “The banks in Asia are in a very solid position. All these are a play on the recovery in the stock market in Japan.”

 

Faber considers U.S. government bonds junk. “As long as they can print, they can pay the interest,” he says. “But another way to default is to pay the interest and principal in depreciating currency.”

 

For that reason, Faber advocates a wide basket of diversification out of dollar-based assets.

 

“The dollar may rally somewhat, but clearly in the long run the dollar and other paper currencies — the euro is not much better — will have a depreciating tendency vis-a-vis honest money: gold and silver,” says Faber.

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