Legendary mutual fund manager Jean-Marie Eveillard, now senior advisor to First Eagle Global Fund, sees a fragile economic recovery coming soon.
A rebound is in sight, “because there’s enough stimulus that has been put in place both from a monetary and a fiscal standpoint,” he tells Bloomberg TV.
“So at some point within the next six to 12 months there will be some kind of recovery.”
The bad news: “I’m not sure growth will come in time” to help earnings, Eveillard says.
“The key question within a few months will be will the recovery be a typical post-World War II recovery? In other words will it go on for three to five years or will it peter out or run into obstacles fairly quickly.”
Eveillard thinks the latter is highly possible.
First Eagle has 10 percent to 12 percent of its assets in gold and gold mining securities to “protect against the fact that current policy by the American government and the Fed are potentially wildly inflationary,” he says.
Eveillard also recommends investing in Asia. “If you look out five to 10 years, there will continue to be investment opportunities in the U.S., Europe and Japan,” he says.
“But the future is in Asia outside of Japan.”
Warren Buffett shares Eveillard’s fear of inflation.
“A country that continuously expands its debt as a percentage of GDP and raises much of the money abroad to finance that, at some point, it’s going to inflate its way out of the burden of that debt,” he tells CNBC.
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