Dec 7 2007 11:50AM

CNBC’s “Warren Buffett Going Global” is a significant achievement in that it unites the world’s greatest investor with the world’s most powerful investment theme.

For those of you who missed it, CNBC traveled with the Oracle of Omaha to China and South Korea and recorded his first-hand reaction to the enduring economic boom under way in Asia.

What he and the camera saw is exactly what I have been talking about for years. The growth of emerging nations, led by China and India, is the most powerful theme for investors, both now and going forward.

Many Americans are skeptical about global investing, even as the international sector continues to post far higher returns than domestic stocks and funds. Mr. Buffett’s common-man outlook makes him “The Billionaire Next Door,” and of course, few in history can match his incredible long-term success as an investor that has brought him so much well-deserved admiration and imitation.

If he’s persuaded that Asia is a place to invest money, it would naturally raise awareness and educate others on the benefits of a globally diverse portfolio.

A great example of skepticism about international investing: many pundits warned investors to avoid China in 2007, saying its run was over. What happened? China had another outstanding year, with accelerating economic growth.

Here’s another example: more than one market “expert” predicted that oil prices would be more likely to fall to $40 per barrel than rise to $80. This forecast was based on past behavior of oil – it did not reflect that the market fundamentals for oil have changed due to global growth.

As you can see on the table below, since the turn of the millennium, there has been a strong correlation between the economic growth in China and India, and the price of oil and the price of gold.

Correlation with quarterly data, 2000-07

Source: Bloomberg

People who listened to this skepticism and sold their China and natural resources funds missed a huge opportunity in 2007. The average China region fund had gained more than 51 percent and the average natural resources was up 29.5 percent through the first 11 months of 2007. By comparison, the S&P 500 posted a 4.4 percent return.

Many of these market watchers and some cynical media outlets have been talking down the global boom from the beginning, and they’re not changing their position despite overwhelming evidence to the contrary.

I don’t think this resistance is stubbornness as much as it is an inability to think contextually about the profound market impact of the major emerging economies. China and India represent 40 percent of the planet’s people, and these people are energetically striving to build their countries and improve their way of life. Those who blindly cling to historic supply-and-demand models are missing a pretty compelling story.

It’s well-known that Mr. Buffett isn’t much of an international traveler, and a look at Berkshire Hathaway’s investment holdings as of September 30 shows almost exclusively U.S. stocks.

But who knows, maybe Mr. Buffett will start using his passport more frequently now that he’s seen what’s going on in Asia. But even if his CNBC trip was just a one-off, his star power may open the eyes of Main Street investors to the idea that the investing world of the 21st century is exactly that – the world.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. As mentioned in the article, the following securities were held by one or more of U.S. Global Investors’ clients as of 9-30-07: Berkshire Hathaway Inc.

by Frank Holmes

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Please consider carefully the fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.