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Earlier this month Julian Robertson commented about Fed’s monetary policy, budget deficits, and global economy. Robertson said the U.S. isn’t doing enough to address structural problems, such as budget deficits in its economy. “"We prefer to put on the Santa Claus suit and celebrate Christmas”, he said. He was highly critical of Fed’s monetary policy, claiming the U.S. dollar is not the safe haven it once was. "Not just gold and silver, but cotton, soybeans, you name it, they're all rising," he said. Jim Rogers is also extremely bullish about commodities.

We also like commodities as an inflation hedge. Investors can buy physical gold, or gold ETFs such as SPDR Gold trust (NYSEARCA:GLD), Proshares Ultra Gold ETF (NYSEARCA:UGL), Gold Miners ETF (NYSEARCA:GDX), Junior Gold Miners ETF (NYSEARCA:GDXJ) and iShares Silver Trust (NYSEARCA:SLV). Investors can also invest in agriculture through ETNs, such as Cotton ETN (NYSEARCA:BAL), Corn ETF (NYSEARCA:CORN), Livestock Total Return ETN (NYSEARCA:COW), Powershares DB Agriculture ETF (NYSEARCA:DBA), Grains Total Return ETN (NYSEARCA:JJG), Coffee ETN (NYSEARCA:JO), Cocoa ETN (NYSEARCA:NIB), Sugar ETN (NYSEARCA:SGG).

So far most hedge funds picked Potash (NYSE:POT) or CF Industries (NYSE:CF) to take advantage of soaring food prices. John Burbank's Passport Capital, David Einhorn's Greenlight, Daniel Loeb’s Third Point, Tom Steyer’s Farallon Capital, Andreas Halvorsen’s Viking Global, Jim Simons’ Renaissance, Richard Perry’s Perry Capital and Mohnish Pabrai bet on Potash. CF Industries is one of the 10 stocks hedge funds own the most of.

Julian Robertson was also very bullish about China. He said China is a “fascinating place and a new market”. However, he is cautioned investors about blindly investing in the Chinese market. “"There are more price dislocations, both ways, in stocks there, than almost anywhere else," he said.

There are two ways of investing in China. Investors can buy the diversified ETFs such as iShares FTSE/Xinhua China 25 Index (NYSEARCA:FXI), SPDR S&P China (NYSEARCA:GXC), Market Vectors China ETF (NYSEARCA:PEK), Hong Kong Index Fund (NYSEARCA:EWH), Guggenheim/AlphaShares China All-Cap Fund (NYSEARCA:YAO), and Guggenheim/AlphaShares China Small Cap Index ETF (NYSEARCA:HAO). FXI, the most widely held Chinese ETF, is arguably best-placed to capitalize on a rise of China’s fortunes. Paul Tudor Jones and Steve Cohen have FXI in their portfolios.

Investors can also indirectly benefit from China’s fortunes by investing in commodity producers who do business with China. This strategy protects investors against a dollar inflation and provides significant upside if China keeps growing. BHP Billiton (NYSE:BHP), Rio Tinto (NYSE:RIO), Vale (NYSE:VALE), Peabody Energy (NYSE:BTU), Freeport-McMoran (NYSE:FCX), Souther Copper Corp (NYSE:SCCO), and POSCO (NYSE:PKX) are among global companies that benefit from the China effect.

Julian Robertson is most bullish about the super growth stocks in the U.S. "I think the most attractive things are the super growth stocks, the Apples, Googles and Amazons, that are now trading around 25 times earnings" he said. He commented that Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG), and Amazon (NASDAQ:AMZN) would have traded at 50 times their earnings a few of years ago.

Julian Robertson puts his money where he is mouth is. According to his 13F filings, Robertson’s top holding was Apple at the end of December. His third largest position was Google. He didn’t invest in Amazon. Investors can imitate Robertson’s 13F holdings and probably beat index funds. His top 20 holdings at the end of December returned 6.3% so far in 2011, vs. SPY’s 4.6%. Here are Robertson’s top 20 stock picks that managed to beat the market by 1.7 percentage points in 3 three months:

Company

Ticker

Return

Value (x1000)

APPLE INC

AAPL

8.6%

39,297

LYONDELLBASELL

LYB

16.9%

24,734

GOOGLE INC

GOOG

-3.1%

24,442

GOLDMAN SACHS

GS

-6.8%

23,088

VISA INC

V

3.6%

21,607

MASTERCARD INC

MA

12.7%

19,583

SNAP ON INC

SNA

4.7%

19,464

TIME WARNER CABLE

TWC

6.6%

19,215

CABLEVISION SYS CORP

CVC

1.9%

17,766

CANADIAN NAT RES LTD

CNQ

8.0%

17,633

VALEANT

VRX

56.5%

16,974

WUXI PHARMATECH

WX

-4.4%

16,730

PETRO DEV CORP

PETD

11.8%

16,055

CARDIOME PHARMA

CRME

-32.4%

15,316

E M C CORP MASS

EMC

18.8%

15,251

QUALCOMM INC

QCOM

5.8%

14,352

NEXEN INC

NXY

5.8%

13,841

DIGITALGLOBE INC

DGI

-9.4%

12,527

LCA-VISION INC

LCAV

17.6%

9,285

THERAVANCE INC

THRX

-6.4%

6,713

Robertson likes technology and pharmaceuticals. Nearly 200 hundred hedge funds own 4% of Apple’s outstanding shares. Hedge fund stars like David Einhorn, John Griffin, Stephen Mandel, Chase Coleman and John Burbank all own AAPL in their portfolios. Robertson’s largest pharmaceuticals holding is VRX. The stock is also the best performing stock in his portfolio, returning 56.5% so far this year. Tiger cubs John Griffin and Andreas Halvorsen also have VRX in their portfolios, which isn’t surprising.

We really like Julian Robertson and follow his comments. He got the 2008-2009 recession call right, and he had been a terrific fund manager for the most of his investment career. Investors can learn and benefit a lot by following and imitating Julian Robertson.



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: I am long physical gold.

Source: Benefit by Imitating Julian Robertson: Bullish on Commodities, China, And Tech