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Invest like a legend: Frank Mersch Add to ...

Hedge fund manager and co-founder of Front Street Capital

HOW I'D INVEST $100,000 RIGHT NOW: I would put 40% in oil and gas stocks like Athabasca Oil Sands and Celtic Exploration, and 40% in gold stocks like Barrick Gold and Continental Gold, an exploration play. I would put 10% in agriculture companies in the palm oil industry and food-handling and storage business. The rest would be invested in technology plays like Canyon Services Group, an oil field service company specializing in fracturing services, and EcoSynthetix, which uses environmentally friendly alternatives to petroleum-based chemicals for high-gloss coated papers.

BIGGEST OPPORTUNITIES: I see the opportunities in hard assets—oil and gas and gold stocks. At the end of the day, you would rather have something that is tangible than just a piece of paper from a government.

BEST INVESTMENT EVER: I invested in Arequipa Resources at about 20 cents a share, and Barrick Gold at around $30 a share. Canadian Natural Resources was a great investment: I started buying it at 20 cents during my days at Altamira, and now own it in my hedge fund and the equity funds as well.

WORST INVESTMENT: C.O.R.E. Digital Pictures, a private animation house. I invested in it for about six or seven years; it was working okay, and then went belly up in 2010. They had a contract with Disney, and I thought they would get follow-up business from them, but they never did.

ADVICE FOR INVESTORS: Be patient. Rather than making very short-term decisions, I prefer to look two, three or four years out. Right now, everybody is in a panic again. I have never seen so much good value and growth companies trading so cheaply, but everyone has gone defensive. We are back to the levels and fear that we saw in 2008.

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