With the world economy in turmoil, stocks trading at a fraction of their former values, and governments desperately cranking their money machines to bail out troubled corporations and lift consumer demand, it’s easy to be blinded by gloom.

Investment Executive decided to consult with five senior statesmen of the investment industry, veterans who have spent their careers being early spotters and beneficiaries of financial market opportunities. Below, these survivors of many market cycles offer their interpretations of the global picture and reveal where they see danger and opportunity.



> Ned Goodman, President And CEO Of Ravensden Asset Management Inc. And Dundee Corp., Both Of Toronto

Ned Goodman is returning to his roots as a financier of resources discoveries. An investment business entrepreneur with a degree in geology, Goodman sees enticing opportunities to invest in top-quality management teams and promising early-stage discoveries. His goal is to help these junior companies raise money for exploration and development while providing them with his capital markets expertise. Then, when the junior company is on the road to production, he will exit — with a fat profit.

With commodity prices beaten down by the economic slowdown and traditional sources of financing drying up for junior companies, Goodman spies a feast for the eating.

“We will see higher prices in the resources market, and now is the time to be making deals,” says Goodman, who is thrilled to be “starting a new life” at the age of 71. “A lot of things are available and attractive. Resources commodities will be in short supply at some point.”

Goodman recently formed Ravensden Asset Management Inc. to fund private-equity deals and merchant banking activities in the resources sector. His plan is to raise $1 billion from investors around the world, including institutions and sovereign wealth funds. He’s knocking on doors in China and has also established a fundraising group in Dubai. He wants to be free of the constraints of the mutual fund industry — and rules that prevent a fund from holding more than 10% of any one company — and is willing to take major positions in promising plays.

Goodman believes the emergence of China’s and India’s middle class will be like two new United States coming into the market in the next 20 years. Although the auto manufacturing business is dying in North America, he expects that traditional cars and ultimately hybrid and electrically powered vehicles will be made in Asia.

“I can get quite bullish, and I’ve chosen the resources side for that reason,” he says. “The world won’t disappear, and I see bargains. I love the idea of starting a new business at this point.”

Opportunities will be sought across the board, he says — in metals, minerals, gold, gas, oil and agriculture.



> Stephen Jarislowsky, Chairman, Jarislowsky Fraser Ltd., Montreal

Stephen Jarislowsky says the global economic downturn is going to get a lot worse before it gets better, and troubled times will be with us for a long time. Rising unemployment, growing poverty and soaring government deficits are ahead, says the Germany-born, 83-year-old money manager.

“I grew up in the Depression and will spend my last years in a depression,” he says. “We will pay a high price for enormous greed, lack of business ethics and a lack of government regulation. It’s very sad, because none of this was necessary.”

Because of lower demand for manufactured goods, Jarislowsky expects sagging demand for the resources commodities that Canada produces. And this will keep the Canadian dollar low.

“The market’s attempt to believe that metals will do well is an illusion. There are no sales of heavy things right now,” he says, pointing to shrinking demand for cars and appliances.

Despite his grim outlook, a lot of stocks have been oversold, he says, and some companies will “survive the mess,” however long it lasts. He likes defensive consumer staples and health-care companies, currently available at “dirt cheap” prices and dividend rates of 3%-6%. Favourite names include a handful of U.S. giants: Procter & Gamble Co., Colgate-Palmolive Co., Kraft Foods Inc., Kellogg Co., Johnson & Johnson and Bristol-Myers Squibb Co.



> Robert Krembil, President, Chiefswood Holdings Ltd., Toronto

Robert Krembil may no longer be picking stocks for mutual funds, as he was in his days as chairman of Trimark Financial Corp., but he’s still actively investing for his own account and charitable foundation, and holds an interest in fledgling fund-management firm Edgepoint Investment Group Inc. With stock prices deeply discounted, Krembil is excited about opportunities in companies with pricing power and the ability to outlast their weaker competitors.

@page_break@Slowing demand and tighter access to credit has led to cutbacks in production and liquidation of inventories, as manufacturers and their suppliers endeavour to raise cash, he says. The good news is that inventories are now at low levels, and with governments pulling all levers to revive the economy, Krembil foresees a rebound for a variety of industries.

“There is a fear of depression and deflation. But governments are not going to allow [them] to happen,” he says. “They are increasing the money supply rapidly, and if that doesn’t work, they will accelerate it.”

The consequence will be higher inflation, which Krembil expects will show up within one to three years. The best opportunities will be in companies with a proprietary business advantage that are able to pass cost increases along to their customers, he says. He likes companies with low profiles, as they will be subject to less public and government pressure if they raise their prices.

“Companies such as Loblaw Cos., Procter & Gamble and Johnson & Johnson are sitting right in the front window,” he says, “and are highly visible.”

An example of the type of company he likes is Vaughan, Ont.-based Martinrea International Inc., an autoparts maker that is in position to pick up new clients as weaker competitors go broke. He also likes International Rectifier Corp., a U.S.-based company that makes equipment used in electrical power management; and Corning Inc., the world’s leading supplier of glass.

“You can’t ignore what’s happened to stock prices,” Krembil says. “You can now buy companies at one-third off. Look for good businesses with smart operators that are priced right, own a collection of them and keep your fingers crossed.”



> Mark Mobius, Managing Director, Tem-pleton Asset Management Ltd., Singapore

With visions of sweet returns dancing in his head, Mark Mobius, emerging markets guru and lead manager of Templeton Emerging Markets and Templeton BRIC funds, which are sponsored by Franklin Templeton Investments Corp. of Toronto, has reduced cash positions in both his funds to zero.

“We are excited. It’s like being kids in a candy store,” Mobius says. “There are incredible bargains and opportunities. It’s a great time to be an investor in emerging markets. We want to be fully invested, otherwise there will be missed opportunities.”

Mobius has been putting money into stocks tied to commodities and to consumer products and services. India and China have huge populations, he says, and spending is growing — on electronics, hard goods, food and services such as banking.

“Consumer lending is in the early stages,” he says, “and per-capita incomes are also growing.”

Mobius’ biggest geographical weighting is in China, followed closely by Brazil. The largest holding in Templeton Emerging Markets Fund is China Mobile Ltd., which is supplying China’s enormous demand for mobile phones as the country transforms from a society of rice farmers into a manufacturing powerhouse with wealth to spend on infrastructure development and the satisfaction of middle-class desires.

The fund’s second-largest holding is in oil company Petroleo Brasileiro SA, a low-cost producer of deep-sea oil that Mobius expects will benefit from a resurgence in oil prices during the next two or three years.

Demand from China and India, he says, is enough to stimulate many resources commodities. But he also points to the U.S., which is “not dead in its tracks” and still consumes at a huge pace.

“Emerging markets can move rapidly and dramatically, and people who are not ready to commit money to these markets stand a chance of losing out on superior growth,” he says. “Many of these countries have low debt, high foreign-exchange reserves and healthy economies.”



> Jim Rogers, Chairman Of Singapore-Based Rogers Holdings And Well-Known Business Author

Jim Rogers has been keen on commodities for several years, and the global financial crisis is reinforcing his convictions. He has become so fed up with U.S. government policy and the economic decline of his native country that he has sold his Manhattan mansion and moved to Singapore. His two daughters are learning Mandarin, he says, so they can avail themselves of the advantages in Asia in all areas of life.

“Throughout history, the action has moved to where the money is; not where the debtor nations are,” Rogers says. “There’s nothing radical about that; it has always happened.”

He anticipates a depreciating U.S. dollar, higher interest rates and inflation; he continues to invest in resources and agricultural commodities that are in dwindling supply.

There has been no expansion of agricultural capacity for the past 30 years, he adds, and there is now “a shortage of everything, including farmers.” Food inventories are the lowest they have been in decades, and demand is increasing as the world’s population grows and people in emerging countries improve their diets. As well, there has been little in the way of new mines coming onstream or major new oil discoveries, which will lead to a supply/demand imbalance.

Although Rogers is not short-selling anything currently, his next short will be in U.S. bonds, which will soon be in oversupply.

“U.S. bonds are the next bubble about to burst,” he says. “But I’m not doing anything yet. I’ve shorted enough bubbles, and it’s better to wait than to be early.”

Rogers says that when governments print money in large quantities, it leads to a decline in the purchasing power of currencies. The best protection is ownership of hard assets. “For decades, the money shufflers in the financial business have been the captains of the universe. But the people who produce real things are now rising to the top,” he says. “Stockbrokers should be learning how to drive tractors.” IE