Gloom, Boom and Doom from Marc Faber

What's the worst possible investment you could make today?

It's to buy and hold a 30-year U.S. Treasury bond, according to economist Dr. Marc Faber of the Gloom, Boom & Doom Report in his Mar. 16 presentation to the Boston Security Analysts Society on "Investing in a world of rapidly changing global and economic trends."

Many of the best investment opportunities lie in Asia or will be driven by Asian -- especially Chinese and Indian -- economic growth, said Faber. These include:

• Real estate in India, Vietnam and eventually China; "one day a Shanghai luxury condominium could be worth more than one in New York City or Boston"
• Asian airports
• Emerging and Asian (ex-Japan) stock markets, especially India, which is "becoming an asset class"
• Equities in general vs. bonds
• Commodities, especially farm products (because their prices are at 200-year lows relative to energy prices) and gold, which is relatively cheap vs. inflation
• Equities in Europe, where valuations are attractive and wages are under pressure from central and eastern Europe

Some other interesting comments by Faber:

• If Russia's president, Putin, were a hedge fund manager, he'd cut oil production in half and prices would double
• Emerging market countries that produce commodities are in a sweet spot
• When commodity prices rise, international tensions rise and eventually lead to war in a cycle that has historically run 25-60 years
• U.S. GDP growth is of poor quality because it has been driven by credit expansion more than capital spending; this contrasts with China where capital spending is strong

Want to get more of Dr. Faber's flavor? Check out "Much Noise in the US--But Little Action."