Gary Shilling recently spoke with Steve Forbes about financial deleveraging and his investing outlook, citing treasuries, the USD, consumer staples, and North American energy as the most prospective assets.
I think right now, as long as you have the risk on and people are enamored with stocks and the grand disconnect is there, what we’re suggesting is being long equities, but selectively and cautiously. In other words, I like things like consumer staples. I like companies that pay high rising and sustainable dividends. Those are some of the healthcare companies, some utilities.
We work with a number of pension funds and they say that commodities are not an asset class. I say, “No, they’re not an asset class. They’re a speculation.” And then you see people through exchange-traded funds. And mutual funds are moving into commodities. It’s been a huge, huge bubble. If you look from the mid-1800′s on, that’s when the Industrial Revolution was in full flower, and then later in the century when the Japanese came in, the inflation adjusted commodity prices have been on a steady decline. You occasionally get upward spurts, World War I, World War II, the Civil War and then shortages with the oil embargo in 1973 and so on. But they’re very short lived. What it says is human ingenuity beats shortages every time. (Forbes)
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