Faber sees best value in gold miners

|By:, SA News Editor

As gloom and doomish as he's ever been at the Barron's Roundtable, Marc Faber does, however, lean against Felix Zulauf's recommendation to short the Hong Kong ETF (EWH) as a play on a credit bust in China. Property companies are a big component of the Hong Kong stock market, says Faber, and may have already priced in an implosion as they're selling for just 40-50% of asset values. "I would rather buy Hong Kong shares and short the Nasdaq," says Faber.

It goes without saying that Faber is bullish on gold, but he's a bigger fan of the miners (GDX), noting the fast pace of insider buying in the industry. A member of the board at Sprott, Faber says Eric Sprott has been selling company stock to buy shares in small miners (GDXJ). "If the gold price goes up 30%, Sprott's shares might double, but mining stocks could go up four times."

Gold mining ETFs: GDX, GDXJ, NUGT, DUST, GLDX, RING, JNUG, GGGG, PSAU, JDST

Making a decent run after a horrid 3-year stretch, the GDX is up 12% YTD; GDXJ up16.8%.