Legendary investor Marc Faber told Bloomberg Television viewers yesterday where he’s putting his money these days. Bloomberg’s Eric Martin and Rhonda Schaffler wrote Monday:

Faber said he is holding gold, cash and short-term bonds because inflation will increase as the U.S. government lowers interest rates to stave off an economic slowdown. Gold climbed 5.8 percent from Sept. 11 through yesterday and yields on three-month Treasury bills fell 51 percent over the period.

“The governments in this world have no other option but to print money. That will lead down the road to inflation,” Faber said. “You don’t need to be an economist graduated from Harvard to know we’re already in a recession. They will just put white paint on a crumbling building.”

Faber, the Gloom, Boom & Doom report publisher, said stocks make up 7 or 8 percent of his holdings, with cash, bonds and gold, his biggest position, accounting for the rest.

Martin and Schaffler also reported on Dr. Faber’s stock picks. They wrote:

Faber recommended buying stocks in Singapore because they are inexpensive relative to company assets. He said this is true particularly for the nation’s real-estate investment trusts and banks.

Singapore’s Straits Times Index has fallen 49 percent from a record one year ago.

“You should just buy the whole of Singapore,” Faber said. He also recommended stocks in Turkey.

Source:

“Faber Says Stocks May Rally, Won’t Reach Records (Update1)”
Eric Martin, Rhonda Schaffler
Bloomberg, October 20, 2008

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