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The Guru's Corner

Feb. 17, 2005, 1:27 p.m. EST

Opportunities from Asia to Canada

Commentary: Global picks from the World Money Show

By Steve Halpern, The Money Show Digest

SARASOTA, Fla. (MSD) -- One need not venture into the unknown territory of foreign exchanges to invest abroad.

In the first week of February, nearly 11,000 investors from 22 countries converged at the World Money Show in Orlando to get investment advice and tips from advisers literally spanning the globe.

Many advisors speaking at the event affirmed the need to invest a portion of assets in global stocks. Here, we offer a variety of ideas collected from investment letter editors and analysts speaking at the conference. The focus was on showing investors how to gain the diversification and growth potential of international investing through U.S. listed shares and American Depository Receipts, ADRs.

Personal Finance

"Following the tsunami, you'd think that Indonesia would be the last place to invest your hard-earned capital," says Neil George. "But you'd be wrong. He sees billions of dollars pouring into this country to rebuild and expand the infrastructure affected by the disaster. He notes that the country is one of the few OPEC members that still have vast, untapped oil and gas fields.

How to invest? Says Neil, "There are two ways to put some money to work here. First is the broad play on the local market through the closed-end Indonesia Fund . A second, more specific play, in addition to the closed-end fund play, is PT Telekomunikasi Indonesia (NYS:TLK) , the main provider of local and long-distance telephone services."

Straszheim Global Advisors

Don Straszheim, former chief economist for Merrill Lynch, now runs a boutique research firm specializing in China. He notes, "We believe the fastest growing industry in China over the next decade will be environmental protection and improvement. He points to the fact that 16 of the 20 worst polluted cities in the world are in China.

"There must be 10,000, 'Love Canals' in China -- absolutely toxic bodies of water," says Don. The analyst notes there are two major global environment firms are involved, Halliburton (NYS:HAL) and Asea Brown Boveri (NYS:ABB) . He also points to four firms well positioned for the water-pollution market: ITT Industries (NYS:ITT) , Danaher (NYS:DHR) , Veolia Environment , and Suez SA .

Standard & Poor's

Ken Shea, chief global equity analyst for Standard & Poor's is particularly optimistic about growth in Asia. One favorite is China Mobile , a mobile phone operator with over 1 billion people in its service territory. "We see huge upside growth potential in these shares," Ken says. Japan's Yankgzo Coal , he adds, is benefiting from "the explosive demand in energy in China."

He's also a fan of Hong Kong-based Cosco Pacific (OTC:CSPKF) , a shipping company that is "aggressively investing in container ports in China and throughout southeast Asia." Finally, for U.S. investors, he likes Hitachi , which he calls the "GE of Japan."

Wall Street Winners

Elliott Gue takes a contrary stance on Japan, noting that after a 15-year bear market, the Japanese banking system has been purged of its bad debt. He likes the two sectors that were hit worst from the bear market -- banks and real estate. His top picks are Mistubishi-Tokyo Financial , which he thinks has gone the furthest among the Japanese banks in eliminating its bad debt and Sekisui House (OTC:SKHSY) , Japan's largest homebuilder.

Forecasts & Strategies

Mark Skousen is a fan of Samsung Electronics, which he notes is "the most profitable tech company in the world." He sees an eventual tripling in the price, pointing to new products, such as a mobile phone that converts speech into text messages, and scans business cards into phone directories. And while the stock is not yet listed in the U.S. and must be bought through the foreign stock desk of a broker, offers an alternative for U.S. investors. "Buy the Korea Fund (NYS:KF) , as 30 percent of the fund is invested in Samsung," says Mark. "And as a plus, the fund is trading at a discount to its net asset value."

Templeton Global Group

Chief Investment Officer Jeffrey Everett sees opportunity in the global drug sector. He notes, "We are not scared away from the drug stocks. Indeed, wherever there is controversy, you'll find Templeton." His top global drug stock picks are Sanofi-Aventis (NAS:SNY) in France; GlaxoSmithKline (NYS:GSK) in the U.K.; and Bristol-Myers Squibb (NYS:BMY) in the U.S. "We see great profitability and great margins, and extraordinarily strong balance sheets, while others are focusing on fears," Jeffrey says. Those fears, he believes, are already priced into the stocks.

The Global Investor

Adrian Day, editor of The Global Investor, specializes in natural resources. He suggests Vista Gold (ASE:VGZ) , with operations from Canada to Bolivia. According to Day, the firm's strategy is to accumulate resources in the ground at low-cost, but deliberately not develop them. With its ten properties, he looks at Vista as "a permanent option on gold prices." Among silver stocks, his favorite is Silver Standard , with operations in Australia and South America. "Silver Standard tends to be the most sensitive to silver of all the silver stocks," Adrian says. "When silver goes down, so does SSRI. But when silver goes up, Silver Standard has tremendous upside leverage."

ChangeWave Investing

"By 2008, there will be more infrastructure built in China than anyplace in the history of the world," says Toby Smith, editor of ChangeWave Investing. He calls it the "Marshall Plan times ten." With the resulting imbalance in supply and demand, Toby likes Southern Peru , a copper company. Not surprisingly, he adds, "China is the main buyer of Peruvian copper." The company also pays a 7.2 percent dividend. He's also a buyer of Fording Canadian Coal Trust (BATS:FDG) , which owns the largest metallurgical coal mine in Canada, shipping its coal to Japan and China. He looks for the annual dividend, now about $4.50, to rise to $12 or more over the next 12 months.

Forbes/Lehmann Income Report

Richard Lehmann, editor of the Forbes/Lehmann Income Report, also suggests a Canadian trust, Petrofund Energy (NAS:PTF) . He notes, "The fund is paying double digit, monthly payments." He also looks for strong capital gains, as recent changes in Canadian law now allow U.S. pension funds to invest in this sector. In addition,

Successful Investing

Doug Fabian also suggests investing in Canada -- the country. "Investors should increase their exposure to investments outside of the U.S. dollar," says Doug. "And the one country that I really like is Canada." He notes that the country is "knee-deep" in natural resources." He views the exchange-traded fund, iShares MSCI Canadian Index (PSE:EWC) as an easy way to take advantage of these trends.

The Global Mutual Fund Letter

Finally, Eric Roseman offers one of the most emphatic recommendations I encountered at the Money Show. "Eagle SoGen Global Fund (NAS:SGENX) (which is set to close to new investors at the end of this month) is without a doubt the best performing risk-adjusted global fund on this planet since 1979," he says. Potential investors should note, however, that lead manager Jean Eveillard retired in December and was replaced by his 15-year apprentice, Charles de Vaulx. But, "I believe we won't see any major changes, as de Vaulx has been managing most of the portfolio for the last five years," says Eric. "This fund, which hasn't had a losing year in 15 years, should be the first stop for all global investors -- end of story."

Steven Halpern is the editor of The Money Show Digest.com, a free, weekly e-letter that features the latest advice from the financial newsletter community. Halpern has no positions in any of the stocks or funds mentioned in this report. (TheMoneyShowDigest.com)

Content found in The Guru's Corner is subject to the terms and conditions found in the Disclaimer and does not represent a recommendation of investment advice. Investors should seek the advice of a qualified investment professional prior to making any investment decisions. Performance returns for the Power Income Portfolio have not been independently verified. (disclaimer)

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