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Shah Busts Europe's Biggest Myth – and Shares His Latest Crystal-Ball Call
Shah Gilani has a penchant for making bold predictions.
He also has a penchant for being right.
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Martin Hutchinson has a reputation for being bearish at exactly the right time. Slate magazine singled him out - above even famed economist Nouriel Roubini - as the financier who most accurately predicted how bad the 2009 bear market would turn out to be. In June 2008 - at a time when the Dow was above 12,000, and most folks were calling for it to go higher - Martin predicted the index could nosedive all the way to 7,800 (it actually spun down to 6,600). Before grabbing recognition for his gutsy timing, Martin worked nearly 30 years as an investment banker, with extensive experience in both New York and London. He's served as a senior vice president and head of derivatives for Creditanstalt-Bankverein, director of the Spanish private firm Gestion Integral de Negocios, and advisor to the Korean conglomerate Sunkyong Corp. But it was Martin's work in Bulgaria, Croatia, and Macedonia that solidified his reputation as a true "hands-on" expert on the developing economies. As the U.S. Treasury advisor to Croatia, he helped the country establish its own T-bill program in the 1990s, launch its first government bond issue, and start a forward currency market. Martin is the author of several books. He also served as the business and economics editor at United Press International during the early 2000s, where he jumpstarted the financial-news operation of that historic wire service. He earned his undergraduate degree in mathematics from Cambridge University, and an MBA from Harvard University. He lives outside of Poughkeepsie, N.Y, with his wife, Anna. Martin is our Global Investing Specialist. He serves as editor of the Permanent Wealth Investor, where he focuses on "Alpha Bulldog" stocks that pay high, reliable dividends. In his newest advisory, the Merchant Banker Alert, Martin uncovers the fastest-growing companies in the fastest-growing economies and brings those ideas back home to you.
At first sight, Warren Buffett's deal with the Brazilian-led private equity firm 3G Capital to purchase H.J. Heinz Company (NYSE:HNZ) looks strange.
At $28 billion the famed ketchup maker is valued at a rich 23 times earnings, and Buffett won't even control the management, which is to be left to 3G. Given Warren's long and storied history, something doesn't make sense.
But maybe he's become a doomsday prepper.
In the age of Ben Bernanke, canned baked beans and the like seem to make as the ideal investment. Or maybe Buffett feels that the dollar is about to be wiped out by hyperinflation.
Of course, in those circumstances, you would normally buy gold, but maybe Buffett believes that the crash will be so severe that the economy as a whole will break down.
In that case, you'd want guns and ammunition. Buffett's holding company Berkshire Hathaway (NYSE:BRK-A and BRK-B) does not own a gun manufacturer, but a subsidiary manufactures shoes under license from Browning Arms Company, so no doubt a deal could be done.
However, an even more strategic asset in such an event would be imperishable canned food, and you can certainly imagine a gigantic stockpile of Heinz 57 varieties being accumulated in warehouses around Omaha, maybe accompanied by a lake of ketchup, allowing Buffett to corner the market in baked beans and condiments.