Legendary investors Warren Buffett and George Soros are snapping up shares of companies at prices they perceive to be bargains. From The Hindu Business Line (India) earlier today:

In the midst of people selling their stocks as market values touch the nadir, legendary investors - Warren Buffett and George Soros - seem to be swimming against the tide and shopping for stakes in companies worldwide.

With the economic crisis ravaging global markets, the two billionaires are making investments in firms from America to Australia, which are expected to yield long term benefits.

The Indian publication detailed recent purchases by the two investing legends. From the piece:

The legendary investor [Buffett] had pumped in $5 billion to battered Wall Street giant Goldman Sachs and another $3 billion into diversified conglomerate General Electric.

According to reports, Soros snapped up a five per cent stake in Australian firm Sphere Investments. The company is reportedly looking to develop a multi-billion dollar iron ore mine in Mauritania. Moreover, in October, Soros had acquired over five percent in Australian mining firm Legend International.

The deal is pegged to be worth more than $8 million.

NEW VIDEO: Where is the bottom in Crude?

Yesterday, the Washington Business Journal’s Jeff Clabaugh wrote in the New Mexico Business Weekly about an acquisition by the “Oracle of Omaha.” According to his article:

CORT, an office furniture and corporate relocation services company acquired by Warren Buffett’s Berkshire Hathaway eight years ago, has acquired Aaron Rents Corporate Furnishings for $72 million.

CORT says the acquisition makes it the only national furniture rental company, with locations in more than 70 metropolitan areas. Aaron Rents operates rent-to-own furniture rental stores. Both companies have locations in Albuquerque.

Think the chairman and CEO of Berkshire Hathaway anticipates tough times ahead for American and British consumers? Clabaugh noted:

In January, Berkshire Hathaway (NYSE: BRK/A) acquired Roomservice Group, a furniture rental company in the U.K.

Sources:

“Buffett, Soros continue buying stake in cos”
The Hindu Business Line (India), November 7, 2008

“CORT acquires Aaron Rents division”
Jeff Clabaugh
New Mexico Business Weekly, November 6, 2008

Commodities guru Jim Rogers is predicting that “poor man’s gold” may outperform the real thing in the future. According to a Bloomberg piece that appeared on BusinessMirror (Philippines) yesterday:

Silver, down 35 percent this year, will outperform gold as investors turn to the metal as a hedge against inflation, investor Jim Rogers said.

“Silver will do better than gold,” Rogers, chairman of Singapore-based Rogers Holdings, said on Monday in an interview in New York. “It’s been beaten down horribly. If you put a gun to my head and said you have to buy one, I would buy silver rather than gold.”

Still, that doesn’t mean the former partner of George Soros is turning his back on the yellow metal. From the piece:

Gold may drop as central banks and the International Monetary Fund (IMF) sell the metal to raise cash, said Rogers, who correctly predicted in April 2006 that gold would reach $1,000 an ounce. The IMF in May ratified a plan that included proposals to sell 403.3 metric tons of gold to reduce a budget deficit.

“The IMF has gigantic amounts of gold,” said Rogers, a cofounder with George Soros of the Quantum Hedge Fund. “Maybe gold is going to go down for a while. If gold does go down, I’m going to buy more.”

Source:

“Silver likely to outperform gold as inflation hedge, Rogers says”
BusinessMirror (Philippines), November 4, 2008

Legendary investor Jim Rogers was in the Netherlands last week and stopped by ABN Amro Netherlands. RTL Z (Netherlands) was at ABN headquarters on Friday and got the chance to interview the CEO of Rogers Holdings. Notable excerpts from the interview included:

Obama or McCain?

Neither. I’ll vote the protest vote because neither one of them has a clue.

Inflation or Deflation (Near Future)?

We’re going to have serious inflation. Because governments around the world are printing money. Whenever you’ve had lots of money printed over the past few hundred years it’s always led to higher prices, it’s always led to inflation. I mean, these are simple things. Right now, everything is going down because there’s forced liquidation of everything. But in the end it’s going to be an inflationary nightmare.

Brazil or India?

Brazil. Brazil has got a lot of natural resources and is a reasonably well-run country. At the moment, India doesn’t have many resources, and even the resources they have, they manage badly. No, I would never want to put my money in a badly-managed country or company.

Mexico or Germany?

Germany… Germany’s a much better place, of those two, I’d rather be in Germany.

Iceland or United States?

I’m shorting the United States’ government bonds… I’m selling short the long-term government bond in the U.S. I’m not doing anything in Iceland.

Dollar or Yen?

Yen… I would not buy the dollar now, I’d buy the Yen.

Gold or Gold Mines?

Thousands, tens of thousands of gold mines have gone bankrupt over the past 150 years. Gold is still gold. I’d rather own the gold than the mines. I mean, if I happen to know the mine, and I knew the guy was a genius, then maybe I would buy the mine stock. But no, definitely buy the gold.

Commodities

Commodities are going to be in a bull market for another decade or two. Whether oil is selling at $45, or $145, it doesn’t really matter to me— today. Ask me in 10 years— it will matter… I don’t have any trouble sleeping, because I know we’re in a long-term bull market.

The segment runs a little over 14 minutes, but is definitely worth viewing.

RTL Interview Link

Source:

Jim Rogers Interview
RTL (Netherlands), October 31, 2008

The “Oracle of Oil,” T. Boone Pickens, Jr., appeared on CNBC this morning and talked about crude oil. From the CNBC website:

“We’re out of the market, and have been for several weeks,” Pickens told CNBC’s “Squawk Box.” “I want to see a little more (from) the market before we move back in again; we’re not going to be in any rush.”

According to the Chairman and CEO of BP Capital, the price of crude oil should recover next year. From the CNBC piece:

Pickens predicts that price will recover to about $100 per barrel during 2009.

“This is the worst credit crunch I’ve ever had,” he said, adding, “We’ve been through them before; you just work your way through it.”

He predicts consolidation as the oil industry struggles to cope with the price plunge.

“I guess I’m kind of anxious to see the first offer for a company,” he said. “We may be a few months away from it.”

He declined to name names.

Source:

“Pickens: I’m On Sidelines … $100 Oil in 2009”
CNBC, October 30, 2008

According to the Business Intelligence Middle East website today, Marc Faber likes gold so much these days— he would like to see the price fall even more than it already has so he can buy more if it. From the BI-ME staff:

Marc Faber, the former head of Drexel Burnham Lambert in Hong Kong and now, besides running private-client portfolios from his base in Thailand, editor of the widely respected Gloom, Boom & Doom Report still favours investing in gold as he believes governments will be left with no other option than printing money, leading to higher inflationary pressures.

Speaking to Bloomberg news Faber said, “I think physical gold will go down some more, but as an insurance policy I’d be very happy if it went down first, allowing us to buy more.”

Compared with industrial commodities, “Gold has held up relatively well,” says Faber “and it has held up relatively well compared with equities.”

Looking ahead, “I think that the governments in this world have no other option than to print money, and that will lead down the road to inflation.”

Source:

“As gold prices fall we will buy more to hedge against coming inflation, says Marc Faber”
BI-ME Staff
Business Intelligence Middle East, October 24, 2008

Earlier today, Jim Rogers talked to Bloomberg’s Nina de Roy in London about the outlook for global markets and his investment strategy for agriculture, gold, currencies and U.S. treasuries.

Investment Strategy

If you want to know what I’m doing now, I’ve been buying the yen, as I’ve talked about on Bloomberg before. I’ve been buying commodities, especially agriculture. I’m selling short the United States long-bond, the long-term government bond. Buying some Swiss francs. A little bit of China. A few Chinese shares, a few Taiwan shares. And I’m watching. It’s an interesting time.

Commodities Outlook

Historically, what comes out of periods like this, and lead the new market, will be the things where the fundamentals are unimpaired. The only things where the fundamentals are unimpaired right now are commodities. I mean, fundamentals for commodities are being improved by all of this… So if you want to make money, you buy the things where the fundamentals are still good and positive, and that’s how you make money…

The world’s certainly in recession, and there is a cyclical slowdown. But the secular supply is being damaged even more. Your not going to be able to get any— farmers cannot get loans to expand. Nobody’s going to give you money to open a zinc mine in the next decade. So when we come out of this cyclical decline, you’re going to have even less supply, and the bull market in commodities is going to resume, and that will be the best place to have money.

Gold

I have gold. If gold goes down, I’ll buy more. If it goes up, I’ll buy more. Gold is in a bull market, which has got years to go. But I expect to make more money in agriculture, Nina, than I do in gold. But I own it. Bought some yesterday, as a matter of fact.

You can view the 12 minute 44 second Bloomberg interview here.

Source:

Jim Rogers Interview
Bloomberg, October 24, 2008

Jim Rogers appeared on CNBC earlier today and emphasized that the credit crunch the global financial system is experiencing will contribute to the allure of commodities. From the CNBC website:

The fundamentals for commodities were not affected by government policies that are propagating inflation, Jim Rogers, CEO of Rogers Holdings, told CNBC Wednesday.

“I bought more agriculture this week,” Rogers told “Squawk Box Europe.” “What’s happening is that there will be less supply of everything if we ever come out of (the credit crunch). Nobody can get a loan for a zinc mine or, long term, increase crop production.”

If history is any guide, things to buy are things that are doing fine right now like water treatment companies in Asia or agriculture, Rogers added.

Rogers, who recently moved his young family to Singapore to take advantage of Asia’s bright prospects, also predicted that the Federal Reserve will be lowering interest rates. From CNBC:

Rogers also said that interest-rate cuts are coming.

“I know we are going to get aggressive rate cuts everywhere, that’s why I’m long short-term government bonds in the U.S., but shorting long-term government bonds because it’s not going to help, it’s going to add to inflation,” he said.

Source:

“In Times of ‘Zombie Banks,’ Buy Commodities: Jim Rogers”
CNBC, October 22, 2008

India’s Commodity Online talked to legendary commodities investor Jim Rogers recently about whether or not the bull market in hard assets was still alive. From their website Sunday:

Now that the world is gripped by recession fears, is the commodities bull market all over?

Not really. Jim Rogers, one of the best known global commodities investors, says the commodity bull market will last longer thanks to the global economic meltdown.

“We have had 8-9 periods of forced liquidation over the past 100-150 years wherein everything was liquidated without regard to fundamentals. This is such a period,” Rogers told Commodity Online in an exclusive e-mail interview…

“Historically the things which have come out best on the other side are things where the fundamental have been unimpaired. Commodities are the only thing I know with unimpaired fundamentals,” he said.

Rogers, who correctly called the commodities bull market back in 1999, thinks that the financial crisis will benefit hard asset prices. From the piece:

In fact, Rogers said, what is happening means there will be even less supply of everything in the future.

“The cyclical demand for commodities may slow, but the secular supply will be badly affected so the commodity bull market will last longer and go further in the end,” he added.

Source:

“Commodity bull market will last longer: Jim Rogers”
Commodity Online (India), October 19, 2008

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

The man who the media likes to call “Dr. Doom” is predicting a much higher price for gold in the future— but not before it languishes a bit more. Bloomberg’s Pham-Duy Nguyen wrote yesterday:

“As markets may recover from now to next March, the full sense of security will come back into the market, and people will not be that interested in gold,” Marc Faber, the managing director of Marc Faber Ltd. and the publisher of the Gloom, Boom & Doom report, said in an interview on Bloomberg Television.

In fact, the Swiss-born investor warned that the price of the yellow metal may drop even more from current levels— before taking off. From Moneycontrol.com (India) this morning:

On gold he said, “Gold price could easily drop to USD 700 per ounce before it enters into a rise but one will see much higher gold prices eventually because paper money is over time losing its purchasing powers in the world.

It’s very clear that every currency is losing its purchasing power in the world.”

For those looking to invest in gold, Dr. Faber, who is famous for advising clients to get out of the U.S. stock market one week before the October 1987 crash, is particular about how one should go about acquiring the metal. Newsmax’s Julie Crawshaw wrote yesterday:

Instead of stocks, Faber advises buying gold in physical form and storing it outside the United States.

Why outside the United States? Well, Faber told Tony Jones of the Australian Broadcasting Corporation the following on Monday:

I’m sure the US Government will eventually go bankrupt. Maybe not tomorrow, but as far as the eye can see, we will have deficits in the US Government, deficits of more than $1 trillion annually.

The Thailand-based investor has mentioned before that the U.S. government may stop American citizens from buying and owning the yellow metal sometime in the future.

Sources:

“Gold Prices Fall as Demand for Haven Drops Amid Equity Rally”
Pham-Duy Nguyen
Bloomberg, October 13, 2008

“End of global turmoil? Mark Faber, Mobius speak”
Moneycontrol.com (India), October 14, 2008

“Grantham: Don’t Get Back Into the Market Yet”
Julie Crawshaw
Newsmax.com, October 13, 2008

“Interview with Marc Faber”
Tony Jones
Australian Broadcasting Corporation, October 13, 2008