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Marc Faber: Buy Oil, Energy Names

Monday, 28 Feb 2011 | 1:27 PM ET

Marc Faber, who predicted the U.S. stock market crash in 1987, recommended buying oil and energy names on Monday.

Faber said that as the world's economies improve, demand for energy will increase. He noted that demand has already picked up in developing countries and continues to rise in emerging markets.

"I think in a, let's say Goldilocks outlook, you have to own some oil," Faber said. "If you're very bearish about the world, it's a nightmare scenario in the Middle East and I don't think that Saudi Arabia can affect production shortfalls of Libya and Saudi Arabia itself is very vulnerable and so I would say under any scenario, I would own some oil and energy shares."

Dr. Doom: Buy Housing Now
Marc Faber, editor of "The Gloom, Boom & Doom Report", explains why now is the time snap up real estate deals.

Faber cautioned, however, that oil and energy names have rallied a lot and are due for a correction. Being as Faber likes natural gas, he would buy Chesapeake Energy on a pullback.

Meanwhile, Faber said the downside in housing is limited. Faber thinks the inflation trade has become overly populated, however. The correction that started in November will likely continue, as stocks in emerging economies are down up to 40 percent. He thinks the ongoing correction will affect even good U.S. stocks, like KB Home . Rather than play U.S. stocks or the bond market, Faber would consider buying a home given the low prices right now.

An investment banker, Faber is also publisher of "The Gloom Boom & Doom Report," a widely read newsletter that highlights his investment strategies.

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UNUSUAL ACTIVITY

Gulf Oil CEO on Gas Prices
Joe Petrowski, Gulf Oil Limited Partnership CEO, says he's starting to see signs of oil demand rationing.

Jon Najarian, an options trader, spotted some unusual activity in BMC Software on Monday.

With its stock trading under $50 a share, the optionMONSTER.com co-founded noted Aug. 60 call buying was very active. Early in the trading session, options traders bought more than 5,000 of these calls.

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Trader disclosure: On Feb 28, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karabell owns (FCX); Karabell owns (GOOG); Karabell owns (AAPL); Karabell owns (GS); Karabell owns (GE); Karabell owns (FXI); Grasso owns (ASTM); Grasso owns (BA); Grasso owns (BAC); Grasso owns (BWC); Grasso owns (C); Grasso owns (CSCO); Grasso owns (JPM); Grasso owns (LIT); Grasso owns (LPX); Grasso owns (MT); Grasso owns (MHY); Grasso owns (NDAQ); Grasso owns (PFE); Grasso owns (PRST); Grasso owns (S)

MARK FABER
Faber and his firm own (CHK), (KBH) and oil positions

BRIAN KELLY
Accounts Managed By Kanundrum Capital Own (EBAY)
Accounts Managed By Kanundrum Capital Own (GCX)
Accounts Managed By Kanundrum Capital Own (IAU)
Accounts Managed By Kanundrum Capital Own (SLV)
Accounts Managed By Kanundrum Capital Own (DBA)
Accounts Managed By Kanundrum Capital Own (JJG)
Accounts Managed By Kanundrum Capital Own (TLT)
Accounts Managed By Kanundrum Capital Are Long Corn
Accounts Managed By Kanundrum Capital Are Long Soybeans
Accounts Managed By Kanundrum Capital Are Long Copper
Accounts Managed By Kanundrum Capital Are Long Oil
Accounts Managed By Kanundrum Capital Are Long US T-Bonds
Accounts Managed By Kanundrum Capital Are Long The Euro
Accounts Managed By Kanundrum Capital Are Long The British Pound

For Zach Karabell
River Twice Capital owns (QCOM)
River Twice Capital owns (ONG)
River Twice Capital is short (AA)
River Twice Capital is short (S)
River Twice Capital is short (SPY)
River Twice Capital is short (SMH)
River Twice Capital is short (QQQQ)
River Twice Capital is short (XLF)
River Twice Capital is short (XLI)
River Twice Capital is short (MA) puts
Karabell and River Twice Capital own (BRCM)
Karabell and River Twice Capital own (CSCO)
Karabell and River Twice Capital own (IBM)

For Steve Grasso
Stuart Frankel & Co and it’s partners own (AMGN)
Stuart Frankel & Co and it’s partners own (CSCO)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HPQ)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (MSFT)
Stuart Frankel & Co and it’s partners own (NEM)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners are short (QQQQ)
Stuart Frankel & Co and it’s partners own (AAPL)

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  Price   Change %Change
BMS
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CHK
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KBH
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