Commodities: Faber likes energy companies since the long-term trend in oil is up, as supply fails to keep up with surging demand from emerging markets. Notes that emerging markets have surpassed the developed world in oil consumption and that this trend should keep demand strong for the foreseeable future. Faber likes the majors like Exxon, Hess, and even Chesapeake as natural gas is too cheap on an inflation adjusted basis. Continuing the energy theme, coal and uranium stocks should be gradually accumulated on weakness as the world looks for alternative sources of reliable energy. Peabody on the coal side and Cameco for uranium should outperform over the next few years.
Gold and Silver: Faber reiterates his favorable opinion on gold and silver. Doubts they are currently in a bubble as some analysts postulate. Faber notes that investor exposure is very low when you look you compare it to the world’s financial wealth, meaning that gold and silver are still under-owned and have room to run.
CommodityOnline
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