Marc Faber on Gold, Stocks & QE3 - Beacon Equity Research

As the global financial crisis accelerates in the fourth quarter following revised economic data revealing a high probability of another recession in Europe and the United States (see BER article of Nov. 7) on the horizon, the ever-entertaining publisher of the Gloom Boom Doom
Report Marc Faber stated Wednesday that he’s convinced that governments across the globe will print money to prevent a collapse of the financial system.
Japan, the UK and EU continue to relentlessly debase their respective currencies in a fight to retain a piece of shrinking global demand, simultaneously reducing crushing debt obligations in real terms priced in their respective currencies—a kill-two-birds-with-one-stone monetary policy salvos fiercely unleashed anew in the recent wake of horrendous drops in global export data for October.

In the case of Europe, imminent debt defaults merely add to the urgency for more money printing by the ECB—whose new U.S.-centric central banker from Italy, Mario Draghi, has taken the helm as the next step toward flushing out the ultimate intentions of Germany regarding the euro.

China apologetically lurches back onto the dollar peg, and it’s now the turn of the U.S. to fight back with its own strategic weapon—the dollar—in the race to devaluations.

“A third wave of quantitative easing by the U.S. Federal Reserve is just a matter of time,” Faber said in a speech in Taipei, according to Taiwan’s Taipei Times.

Faber also points out that, while the world’s industrialized countries wage a full-blown global currency war, the victims of said war won’t include the rich; it will be the masses who take on the traditional role of cannon fodder for the bankers and politicians.

“Some people will benefit from money printing that deflates the purchasing power of currency . . . but the middle and lower—income classes are being hurt,” said Faber, who has repeated on many occasions throughout the global financial crisis his disdain for central bankers and the financial pain they inflict on innocent people.

Faber recommends eschewing bonds in favor of stocks, Asia real estate and physical gold—especially gold, an asset he colorfully referred to in an interview with Newsmax in September, “I own my gold and I will never sell it, especially when I see clowns like Ben Bernanke, Larry Summers, Tim Geithner.”

On the growing debate regarding China’s economy, according to Faber, it’s in a bubble; but the Chinese bubble can last longer than many expect; it could pop in three months or three years, he said.

It should be noted that the notion of a potential Japanese-style collapse in China has gathered steam lately—and was first suggested by famed hedge fund manager Hugh Hendry of Eclectica Asset Management, who said at an investment forum in Russia last year regarding China’s successive string of high GDP rates which appeared to him to be driven by too much capital spending, “Confucius say: thou shall not invest in overcapacity.”

Faber also touched upon the escalating geopolitical tensions between the West and the Middle East/Central Asia region.  To contain China’s rise as a bona fide superpower, the West must secure oil supplies for themselves at the expense of China, he said.

But no matter how the struggle for oil supplies between the West and China plays out, or whether China’s economy heads south, or not, Faber wittily said, if need be, “Chinese invented paper. They know how to print money.”

According to Faber, at some point, the global reflation trade is all but certain.

Peter Schiff's Boldest Call Ever - Beacon Equity Research

Sentiment for a euro swan dive must stand at a record; it must dwarf any negative reading the U.S. dollar ever had. No fresh data are available on the sentiment for the USD:euro cross, but the chatter everywhere about the imminent demise of the EU is truly deafening.

The Mr. Magoo of Wall Street, Euro Pacific Capital’s Peter Schiff appears to have not noticed.  As the crowd runs from talking nice things about the euro, he just muddles along with his prediction of a renewed U.S. dollar weakness against the euro—and sterling, yen, Swiss franc and the other small-weighted currencies making up the UDX. Sign-up for my 100% FREE Alerts!

“Our short-term target for the euro, maybe by year end, will be up near 1.48,” Schiff told KWN on Oct. 25.  “I think that’s going to catch a lot of people off guard who were writing the obituaries for the euro, to see the euro approaching the 1.50 level.  The dollar index should be headed back down to the 72 level.”

Schiff appears to be completely alone with that call.  Even Jim Rogers and Marc Faber cannot be quoted about the overly negative sentiment in the euro.

That should trouble contrarian investors; it reminds us of similar negatve sentiment of the U.S. dollar prior to Lehman’s death.  At that time, the USDX hovered at an all-time low of 72 in March 2008, scaring the bejesus out of the financial media of an imminent collapse of the dollar.

And like magic, the USDX soared approximately 24 percent to 89 by March 2009—a year latter, amid the Lehman Armageddon and talk of ‘deflation’ of 2009.  Jim Rogers and Marc Faber were among the handful of market savvy observers who warned of too many traders on one side of the boat before Lehman.  Not so today.

So, fast forward to today; it’s the euro’s turn.  And like clockwork, the media’s favorite apologist for the dollar among the gold community, Dennis Gartman, told Bloomberg News on Nov. 4, “The driving force in the gold market is the problems in the euro,” Gartman said in a telephone interview. “Central banks in Europe and individuals will want to lower their euro holdings and buy gold since no one knows what is happening to the euro. The euro is heading towards parity once again.”

The drama in Europe has been prime time media coverage since March 2010 with the trouble in Greece.  If Hugh Hendry was around, he’d laugh at Gartman for his much-too-obvious recommendation.

Side note: Why Gartman talks about gold in euro terms when nearly three of four visitors to his Web site are from either Columbia or Canada is as strange as his persona.  The chart from Alexa.com, below, indicates that most of the traffic to the Gartman Letter Web site originates from the country of Columbia.

Maybe the underground in South America needs to know which currency to counterfeit (tin-foil hat translation: for the ‘good guys’ to spend?).  Shouldn’t Gartman forecast gold in terms of the Columbia pesos, then?

Contrast Gartman’s latest assessment to Schiff’s call.  Schiff added to his Oct. 25 interview with KWN that the gold price could possibly trading at $2,000 by year end.  In U.S. dollars!

“I think we will come pretty close to hitting $2,000 on gold this year,” Schiff predicted.  “It would be hard for gold not to be above $2,000 in 2012.  I really think it would be unlikely that we wouldn’t see prices north of $2,000 next year.”

He continued, “The dollar is headed right back to the lows and I think it will take out the lows.  If it does break to new lows, that’s when we might see another crisis because then we might start to see the world questioning the viability of the U.S. economy….”

From the chart, above, the USDX has traded below its 20-month moving average (a metric which famed author of The Dow Theory Letters
, Richard Russell, likes to use as a guide for major turns) since November of 2010.  And with so much hype for a euro collapse in the face of the USDX trading below its 20-month moving average may not tell us where the euro is going from here, but this phenomenon should not be taken lightly, nor should Peter Schiff’s call for a lower dollar and higher gold prices—in U.S. dollars! and euros . . . and Columbian pesos.

CNBC Hobbs Ambushes Marc Faber - Beacon Equity Research

By Dominique de Kevelioc de Bailleul
In a more sober manner from his appearances in Montreal and London, speaking from Zurich, a few hours prior to a formal announcement to the conclusion of the latest and endless emergency EU summits, Marc Faber told CNBC Thusday he expects the ECB and the Fed to make inflation a permanent feature of monetary policy in response to the global financial crisis.
“. . . What I think will happen eventually . . . the same will happen as in the United States, the ECB will print money one way or the other,” he told CNBC's Carl Quintanilla. “And, the debts that should be essentially written down to realistic value will continue to be carried on the books of banks at unrealistic values.”
“So the end crisis will be postponed until the sovereigns go bankrupt,” he said with Cheshire Cat smile.
And, of course, Faber, was right when the matter comes to a push-and-shove. Hours later, Associated Press
release the following headline: EU official: Eurozone reaches deal for private creditors to take 50 pct cut on Greek bonds
When CNBC's David Faber asked Marc Faber (no relation) to elaborate, he said, “Well, before they [sovereigns] go bankrupt they'll print money, and they can print endless money, and as long as we have Ben Bernanke and Janet Yellen at the Fed, they will also print money, and they can postpone the endgame endlessly, endlessly not, but say for another five to 10 years.”
And of course, money printing translates to higher food and energy costs, as the result of the EU agreement prompted monstrous moves in oil, precious metals (especially the silver price) along with stocks on all global exchanges—with bank stocks soaring across the board somewhere in the five percent bracket. Oil was up more than $3 per barrel, while silver nearly rose $2.
In response to David Faber, Marc Faber noted an article he just read that indicated that education costs in the US rose 8 percent this year, serving as an example of the “unintended consequences” of money printing at the Fed and ECB. If central banks continue layering debt onto debt, the average American household won't be able to service the debt, he said.
That's when the “hour of truth” approaches, Faber added, bumbling another metaphor on top of a previous misstated metaphor, “the closets are bare”, a few years back in another CNBC interview. It's all in good fun and is half the reason for catching a Faber interview. But CNBC's Simon Hobbs was in one of his nasty moods as he reminded Faber of his 'Faber Shocker' at the World Commodities Conference in London on Tuesday, when the Swiss money manager end his presentation with another 'Faber Shocker', as reported by the Wall Street Journal
:
“You should not only diversify your asset holdings, but also diversify where you hold those assets, in case they’re seized by politicians as the welfare state enters its death throes. The governments, they’re going to f— you all, that’s for sure.”
Hobbs asked Faber in a his characteristic stoic posture, “That's quite an negative view, don't you think?” Faber, still laughing from hearing his quote read back to him, said, “I said it differently.” How disappointing, if true.
Faber went on to explain that the US and EU governments are not looking out for its constituencies, but, instead, politicians are increasingly only looking out for themselves.
Hobbs then issued the zinger question to the Gloom Boom Doom
publisher, turning the interview into the subject of Marc Faber.
“In Steve Jobs' new autobiography, Walt Isaacson talks about a conversation he had with Rupert Murdoch, and Steve Jobs says, 'For commentary and analysis today, the axis today is not liberal or conservative, the axis now is constructive versus destructive.' Which side of that line do you think you fall on?” asked the steely-eyed Hobbs.
“Well, I think I'm very constructive and I'm a great optimist in life, otherwise I would commit suicide in view of the kinds of governments we have now-a-days,” Faber retorted. “Because, for sure, they will take wealth away from the well-to-do people one way or the other, and from the middle class, they will take it away through inflating the economy and lowering the standard of living.”
In that environment, Marc Faber added, “I rather own equities than government bonds for the next 10 years,”
Carl Quintanilla, then, wraps up the interview by thanking Faber for his appearance. Faber responds, “It's my pleasure. It's my pleasure to be so optimistic
,” beaming for having the last word with the sourpuss Hobbs.

Goldmoney's James Turk, $11000 Gold Price - Beacon Equity Research

By Dominique de Kevelioc de Bailleul
The result is in! At the end of the rainbow, the world will see a five-digit gold price, $11,000 per ounce as the 'fair value' of gold—for now—as the printing presses have yet to stop, in which case, more money printing translates to even a higher gold price down the road, according to Goldmoney President James Turk.
“Having filled the role of international money for 5,000 years, gold has been supplanted by fiat currency for the past 40 years because of government force,” Turk stated in an exclusive KWN report. “However, this nascent experiment with fiat currencies is not going well, as evidenced by growing global imbalances, unchecked increases in debt and financial derivatives, ongoing debasement of currency purchasing power and worsening monetary turmoil.”
So how does Turk assess a 'fair value' of $11,000 per ounce for gold, an asset which pays no dividends or interest?

Turk released his much-referenced 'Gold Money Index' calculation, a simple formula, really, in response to inquiries from his followers who'd like to follow his Index for estimating fair value of gold for themselves.

Turk demonstrates that by graphing the result of dividing total central bank foreign exchange reserves by total gold holdings of said central banks yields a trend line 'fair prices' versus the market prices for gold plotted over time.

Between the years 1971 and 1984, the correlation between the 'fair price' and actual market price appears uncannily close to 1.0, according to his graph. In other words, as central banks increased fiat foreign reserves, the market adjusted the gold price up to reflect the increased monetary level during that 16-year period.

For those who remember, back in the 1970s and for much of the early 1980s, the most watched statistic besides the BLS employment report and US Commerce Department's CPI and PPI, was the Fed's release of money supplies M1, M2 and M3, released each Thursday. Back then, everyone was tuned into the connection between money supply and gold.

Since 1984, however, Turk's chart shows the gold price in relation to money supply leveling off as sharply declining CPI numbers and interest rates set off the end of the 15-year bear market in stocks. The demand for stocks was greatly enhanced and encouraged by the passage of the tax code 401(k) in 1978 by Congress, which didn't go into effect until Jan. 1, 1980, further fueling stocks as most plans offered only stocks as a means for investing for retirement. Stocks were in, and gold was out of favor!

Early on, only eight million taxpayers utilized the tax-deferred law more commonly referred to as just 401k. But by 2005, more than 70 million participated in the government sanctioned plan as a way to defer taxes on earned income until after retirement, which ignited steady and voluminous amounts of cash into stocks—the gas tank, if you will, for the bull market in stocks. Few plans offered gold as an option throughout that time period, and may explain a good part of the divergence of retirement money going into stocks and away from gold on a relative basis during the stock bull market of 1984 through 1999.

As if on queue, the gold price took an additional beating from another method by which the spread between the price of gold and its fair value widened. UK's Chancellor of the Exchequer Gordon Brown's infamous sale of 60 percent of Britain's gold, unloaded at the very bottom of the market between the years 1999 and 2002, put additional pressure on the gold price for another three years. From its peak of approximately $850, set in Jan. 1980, the gold price reached a low of $255 in 1999.

But since the year 2002, the gold price has mirrored central bank holdings of foreign reserves, but the level at which the yellow metal started to mirror those reserves began at a much lower level than it otherwise would have, thanks to Brown's absolute bottom prices received for so much of UK gold reserves—a truly disastrous trade by the former superpower.

“Despite this remarkable rise in the gold price, it is clear from the above chart that gold’s undervaluation has barely budged for more than a decade,” Turk explained. “The reason of course is the growth in the quantity of national currencies held by central banks (the numerator in the Gold Money Index) is rising about the same rate as the weight of gold held by central banks (the denominator in the Gold Money Index). So gold remains tremendously undervalued.”

Turk's analysis dovetails quite nicely with another studied man of the markets, Swiss money manager Marc Faber of the Gloom Boom Doom Report
, who told NewsMax in mid-September that, though the gold price has risen to above $1,800 per ounce (at that time), it still remained grossly undervalued within the context of historical relationships with similar and other metrics used by Turk.
“In fact, I could make an analysis to show that the price of gold today is probably cheaper than when it was $300 per ounce based on the increase in government debt, based on the increase in monetary base in the United States and based on the expansion of wealth in Asia,” said Faber when ask of his opinion regarding the gold price.

Mr. Gold Jim Sinclair, 20-year veteran bond trader Paul Brodsky, Sprott Asset Mangement's Eric Sprott, prolific financial author Steven Leeb, and former Head of Princeton Economics Limited, Martin Armstrong, to name just several, all hold price targets of $10,000, or above, for the price of gold when the day that all fiat money finally squares itself with central bank reserve levels. Sounds preposterous?

Sinclair was laughed at by outsiders of the gold community in 1999 following his prediction of $1,650 for gold by 2010. Fewer pundits dare belittle him today for his $12,500 gold price forecast.

Especially after the gold price broke $1,000 per ounce in Mar. 2008, many pieces offering methods of value for an ounce of real money have littered the web, with all, save a few, calculating the long-term gold price to five-digits—at least! So far, Richard Russell won't budge from his call for $6,000 for the yellow metal. But more time is all the 50-year veteran of the markets may need to come around to the thinking of Turk and the gang.

A final note about the Goldmoney president, James Turk: it can safely be said that Turk is a cautious, conservative and measured communicator with with his wide audience. He neither gets too excited nor despondent during the volatile moves in the gold price.

Of all people, if James Turk can demonstrate a $11,000 value to gold and confidently make the call, that estimate could turn out to be a bare minimum appraisal. But from time to time, he'll be out with another adjustment to his target price as he's done on several occasion already during this bull market.

Another Marc Faber Shocker - Beacon Equity Research

The always-entertaining Marc Faber has done it again.  Speaking with CNBC’s Joe Kernen yesterday, the eclectic Swiss-born money manager from Chiang Mai, Thailand, blasted the American people for its whining, tantrums and bellyaching now that six decades of dollar hegemony has left a tab too enormous to pay.

The message to Americans who saw his appearance on CNBC, which, by the way, has quickly spread throughout the Web is: “Listen you lazy bugger, you need to tighten your belts, you need to save more, you need to work more for lower salaries.” A truly vintage Faber shocker.

Another guest, who was in studio, chimed in following the Faber rant, “Well, that’s essentially what David Cameron is saying in the United Kingdom and it doesn’t seem to be working too well, so far.”

“Yes, because no one wants to work in the UK,” Faber chuckled.

Looking a tad puffy in the eyes, Faber originally began the Kernen interview by noting that he had just been chatting with some “chums” with his “blonde” in Montreal, where he was telecast for the early-morning appearance at CNBC’s studio in New York.  So those familiar with Faber’s moods just knew several more quotable Faberisms were in the offing.

In between the colorful rhetoric, Faber said the present gyrations in the markets can be traced to a tightening of global liquidity brought about by European banks front-running the scheduled debt maturities time bombs in Greece and Italy (among other countries not evident on the radar due to transparency issues, bogus accounting and stress tests).  And when liquidity becomes tight, as happened in 2008, the risk-on trade comes off and the dollar trade comes back on—the knee-jerk reaction among traders that commodities guru Jim Rogers alluded to in his interview with Russia Today
on Oct. 4.
“As far the dollar is concerned, the reason I’m actually quite positive is that global liquidity, despite of the fact that the ECB and the European governments will flood the market with liquidity to pay the sales out, that global liquidity is tightening,” said Faber.  “And whenever global liquidity is tightening, it’s bad for asset prices but good for the U.S. dollar as was the case in 2008.”

Faber blames policymakers and lobbyists for U.S. debt woes, suggesting to Occupy Wall Street
protesters, without mentioning them by name, that attacking the free market system is misguided, but going after the architects of a failed crony capitalism system, instead, is understandable.
“As to that huge level of debts, I don’t see how the Western world, including the U.S., Japan and Western Europe can actually grow,” Faber explained.  “They’re going to stagnate. And when you have stagnation over a longer period of time, people start to ask questions and then they go after minorities. And Wall Street is a minority – they are a minority and anyone else would have done the same. They use the system. But they didn’t create the system. The system was created by the lobbyists and by Washington. So they should actually go to Washington and also occupy the Federal Reserve on the way.”

What the U.S. really lacks, according to Faber, is an iron-fisted ‘leader’ such as Singapore’s first prime minister, Lee Kwan Yew—the man who believed public caning was appropriate punishment for 40-listed criminal offenses.

“I’ll tell you what the U.S. needs,” Faber began to rant, as only he can.  “The U.S. needs a Lee Kwan Yew who stands in front of the U.S. and tells them, ‘Listen you lazy bugger, you need to tighten your belts, you need to save more, you need to work more for lower salaries’”

Marc Faber releases Gloom Boom Doom Report - Beacon Equity Research

Hold onto your seats, says Swiss money manager and publisher of the Gloom Boom Doom Report,
Marc Faber; it’s going to be a rough ride ahead for investors.
In his latest view on the markets, the quintessential contrarian suggested in his October edition of the Gloom Boom Doom Report
that the real threat to global markets is China, not the global financial crisis epicenter of Europe.
China, he stated, may be on the verge of economic collapse, stemming from the dreaded one-two punch of rapidly increased capital goods overcapacity to match significant reductions of global demand for its products.

The recent precipitous decline in the price of cooper tells Faber that China’s rapid GDP growth may have been somewhat of a mirage for a spell.  What was once thought of as a clever means for China to dump U.S. dollars in favor of ramped-up infrastructure spending in the People’s Republic, with numerous reports streaming into the West of newly-built cities erected in anticipation of millions of soon-to-come inhabitants, may, instead, result in another example of a Mao-like central planning scheme gone bust.

In 2010, at a conference in Russia, hedge fund manager Hugh Hendry of Eclectica Asset Management opined about the very same risk he had seen to the Chinese economy, quipping, at that time, “Confucius say: Though shall not invest in overcapacity.”  Hendry proceeded to warn of a surprise economic collapse in China reminiscent of Japan’s meltdown of 1989.

In recent years, massive infrastructure increased as a percent of GDP in China, while consumer spending dropped as a percent of the total output of the Chinese economy, temporarily front-loading stellar growth results that, it appears, now, are unsustainable and at risk of collapsing the Asian juggernaut.

Faber, who’s been spot on, so far, with his prediction for weaker gold prices in the short term (before a next leg up in the metal becomes a play against serial central banking mishaps), stated that this latest correction in gold may last a while longer, still—and might take the precious metal to the $1,100-$1,200 level before the bottom is reached—a la 1974-76.

“We’re now close to bottoming at $1,500, and if that doesn’t hold it could bottom to between $1,100-1,200,” Faber told CNBC’s Steve Sedgwick on Sept. 25. It appears Faber hasn’t backed off his call of the 25th.

As a backdrop to Faber’s thinking at this time, it should be noted, too, legendary currencies strategist John Taylor of FX Concepts suggested a 50% decline from the $1,900 mark was in the cards for gold.  But, more impressively, Taylor told Bloomberg during the summer months of 2011 that gold could touch $1,000 after reaching a new high of $1,900.  Eerily, Taylor made those calls when gold traded at approximately $1,500 per ounce while the gold market was about to enter the seasonally slowest months of the calendar year of July and August.

Faber suggested in his latest report to subscribers that a drop he envisions for gold to the $1,100-1,200 range would mimic the historical performance of the gold price during the 1970s.  In 1974, gold traded as high as $200, up nearly six-fold from the official $35 peg of 1971, then sold off off to $100 by 1976.

But as history shows, the damage to the dollar had already been done following the Nixon Administration’s executive order to decoupled the dollar from its gold backing in 1971.  After the 1974-76 decline of 50% in the gold price, from the $200 high of 1974, back down to $100 in 1976, the gold price never looked back, skyrocketing to $850 per ounce by January 1980—a nearly 85% compounded return during that 42-month period.

Could Faber be right again, or has he gone too with in his prediction in the wake of ongoing fat-tail moves in emerging market currencies and European sovereign bonds?  Conventional wisdom today is Europe is going down and it’s about to get uglier than the Lehman crisis ever got.  But, unlike the Lehman event, everyone’s expecting the worse outcome in Europe this time around.  Has the gold market already priced in a catastrophe in Europe, or not?  We’ll see.

Investing in a little light research could prove to be lucrative - TheNational

Most books on Mr Buffett - and I've read a few - are by some third-rate author desperately struggling to cash in on the great man's celebrity. Not this one. Browne's father worked closely with the Sage of Omaha, acting as stockbroker when Mr Buffett bought Berkshire Hathaway half a century ago. Young Christopher inherited Mr Buffett's investing principles along with the Browne family firm, and used both to great effect.

Christopher Browne died in 2009. His legacy: millions of dollars; an estate in the Hamptons; and a pocket guide to get-rich-slow.
The Little Book argues that making money in the market is easy. First, avoid so-called growth stocks that are darlings of the financial press (think Groupon today, or pretty much any over-hyped tech stock of the 1990s). Second, invest in solid, stodgy companies with stable earnings - but only when the share price is low. "Buy stocks as you would buy groceries - when they are on sale."
All well and good in Nebraska. But can it work in the Gulf region?
Let's find out.
Here's one of Browne's bargain-hunting tricks: find companies with a price/book (P/B) ratio below 1. In simple terms, book value is the cash you'd be left with if you shut the company tomorrow, selling all the assets and paying all the debts. If the book value is more than the firm's stock market value, you could be on to a winner.
I took Browne's advice and ran a search of all 200 companies in Bloomberg's GCC stock market index (for the record, I searched using tangible book value, a more stringent measure that strips out fluffy assets such as goodwill). Here's a list of the 10 cheapest stocks in the Gulf right now, by price/book value: Abu Dhabi National Hotels 0.31; Dubai Investments 0.33; Deyaar 0.40; Sudan Telecom 0.42; Agility 0.52; RAK Ceramics 0.53; Sorouh 0.54; Emaar 0.55; United Development Company 0.66; Union National Bank 0.67 (source: Bloomberg).
Browne warns this is only a rough guide to finding value stocks - plenty of bad companies have had low P/B ratios. But if we scratch below the surface of the Gulf's cheapest three shares, we find at least two of them stand up to scrutiny:
Abu Dhabi National Hotels (ADNH) I've been a big fan of this stock for a while, so I got a warm, fuzzy glow when it topped the book value charts. ADNH owns and manages hotels across the emirates. It is well run, with a track record of profitability dating back to the 1970s. The hotel division is the bedrock of the business, but it actually generates more revenue from a catering joint-venture with the global firm Compass. Analysts predict a steady increase in revenue and profit, as Abu Dhabi's tourism sector grows, and rate the stock a buy.
With a price/earnings ratio of just 7 based on next year's forecast earnings, ADNH looks a strong candidate.

Dubai Investments Mr Buffett would surely love this company. Dubai Investments owns the kind of old-fashioned, stable, cash-generating businesses he covets: a glass factory; a dairy farm; a drug maker; aluminium extrusion; edible oil. The list goes on.
Sure, Dubai Investments has faced challenges lately. Profit slumped to Dh239 million (US$65m) in the first half of this year - down almost 50 per cent year-on-year. The Dubai property slowdown and the Arab Spring have both taken their toll.

But neither presents a long-term threat. Analysts at TAIB bank have a "buy" rating on the stock, forecasting net profit of Dh1 billion by 2013.
That equates to a mouth-watering price/earnings ratio of less than 3, based on today's market value.
Deyaar Development Here we see the limitations of book value laid bare. On the surface, Deyaar looks like a screaming buy - a property portfolio trading a discount of 60 per cent.
But hold on. Last year, Deyaar racked up losses of Dh2.3bn - more than its market value - mainly due to write-downs and impairments. It's creeping back into profit this year as it completes tower blocks in Dubai, but doubts remain about what kind of company Deyaar will look like in five years.
Saeed Al Qatami, the chief executive, says the new strategy is to focus on low and middle-income housing in the UAE and surrounding region.
Investors and analysts are yet to be convinced.
Irfan Ellam at Al Mal Capital has a "hold" recommendation on the stock. He notes the attractive P/B ratio, but says a "lack of strategic clarity" makes it hard to see where long-term growth is coming from.

Marc Faber: Gold “probably cheaper than when it was $300” - BeaconEquity Research

As the debate moves from how high the gold price can go to whether the precious metal has become too expensive at $1,830, Marc Faber, editor of the Gloom Boom Doom Report,
said the ultimate world’s reserve currency is “dirt cheap.”

Speaking with Newsmax’s MoneyNews.com,
the eclectic Swiss money manager, who has called Thailand his home for more than 20 years, believes the gold price should be put into a context of its relative value against rapid devaluations of the world’s primary reserve currencies—the U.S. dollar, euro, yen, and British pound—and, now, the Swiss franc, following the SNB decision last week to peg the franc to the declining euro.
“In fact, I could make an analysis to show that the price of gold today is probably cheaper than when it was $300 per ounce based on the increase in government debt, based on the increase in monetary base in the United States and based on the expansion of wealth in Asia,” Faber explained.

Spot gold reached a high of $1,923.70 per ounce on September 6, whose price has since pulled back to the $1,800-$1,850 trading range following the SNB announcement that the franc, de facto, will no longer become a refuge of the currency.

Nearly 18 months earlier on April 26, 2010, Faber told Newsmax he won’t give up his gold as long as the stewards of the U.S. dollar remain in power—as gold’s price in terms of dollars should increase commensurate with its rate of debasement, which, he said, has been at an alarmingly high rate since the collapse of Lehman Brothers in September 2008.

“I own my gold and I will never sell it, especially when I see clowns like Ben Bernanke, Larry Summers, Tim Geithner,” Faber had said.  At the time of that interview, gold closed at $1,151.10 on the COMEX, a 59% rise to today’s price of $1,830.

Today, Faber remains very cautious, recommending to his clients and followers to hedge bets on the outcome of what he calls a “failed Keynesian policy” among governments and central bankers worldwide.  On many previous interviews around the world, he has stated he speculates that U.S. equities have topped this year, emerging markets appear vulnerable to a shock, and U.S. bonds remain in a massive bubble that someday will “end badly.”

How badly?

On Feb. 27, 2011, Faber conducted an interview with Colorado-based precious metals dealer McAlvany Financial Group, and said, “I think we are all doomed. I think what will happen is that we are in the midst of a kind of a crack-up boom [a term coined by famed Austrian economist Ludwig von Mises] that is not sustainable, that eventually the economy will deteriorate, that there will be more money-printing, and then you have inflation, and a poor economy, an extreme form of stagflation, and, eventually, in that situation, countries go to war, and, as a whole, derivatives, the market, and everything will collapse, and like a computer when it crashes, you will have to reboot it.”