INVESTORS have several ways to follow professionals like Taube. Here are his tips.
Have more in cash, but not money market funds Nearly 20% of the S&W Taube Global fund is in cash, but Taube has a word of warning for anyone considering a money market fund. These are being touted as an alternative to deposit accounts by firms such as Fidelity.
Money market funds invest in short-term debt issued by banks and other financial institutions when they need to borrow money - the same market that sparked the Northern Rock crisis last year.
He said: "We are keeping clients' money on deposit not in money market funds because we can't see what is in the latter, and it is quite possible that the banks will let one of them go under at some point."
Go for gold Taube thinks all investors should have holdings in gold in hard times and it makes up about 9% of his fund. Bullion served him well in the past and should do so again if the downturn is protracted.
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He said a good way for ordinary investors to get exposure is through an exchange-traded fund. These track the price of gold, but without the costs of actually owning it. Barclays Ishares offers the Comex gold trust ETF, which costs 0.4% a year and can be bought through most stockbrokers.
Taube also has gold-mining shares such as Newcrest Mining and Lihir Gold.
The problem with gold shares, though, is that they do not offer pure exposure to the price of the precious metal and can be derailed by company-specific issues.
Ride the food boom - with caution Taube is still a believer in the food boom, backed by growing demand from China and India, and has nearly 4% in Australian Agricultural, the oldest continuously operating company in the country. But he warns that agricultural commodities are not a one-way bet. Prices have been driven high by America's policy of tax breaks for biofuel production, but these now face a backlash and prices could tumble.
Stay close to home Taube's biggest holdings are in blue-chip British companies, particularly in the oil and gas sector - some of which he has liked since the 1970s. Shell is the second-biggest holding in the fund at just above 9%.
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He also likes BP and said: "It is still unpopular and remains good value. New management has started well and postTexas City, I expect the company to regain its poise."
Dip into the banks - but only a toe Taube is selectively buying in to the banks sector now that the Fed has slashed rates to 3%, but he remains nervous - as shown by his ownership of Barclays shares.
He took a stake in the bank recently because of his respect for head of Barclays Capital, Bob Diamond, but he promptly sold last week because they shares were not "behaving". Individual investors who do not have the luxury of trading in and out should take care.