Mr Buffett's Berkshire Hathaway has a swelling cash hoard of US$43.4 billion - a war chest likely intended to pick up bargains during a potential shakeout ahead. It also reflects his view that staying out of stocks is a good idea.

'Warren Buffett seems to have lost it,' Mr Measor says. 'To have a huge cash pile like that is against all Buffett's principles. The main reason he has done well is he's been invested throughout his career.'

A better idea, says Mr Measor, is to stay in the market and ride out the cycles, as long as stock selections are guided by value principles. In general, he says, investors shouldn't take a view on the market - something Mr Buffett appears to be doing - and focus instead on good buying habits.

He says many investors approach the market armed with technical information and an arsenal of trading tools such as stop-loss and profit targets. Inevitably they fail, as investors sell losing shares too late and cash out of the winners too early. Such active trading can sideline investors at the worst times - leaving them out of the market when evidence shows long-term participation leads to the best returns. Despite its dramatic peaks and valleys, the Hang Seng Index is in a steady uptrend. He says that in another 10 years the index should double.

Mr Measor believes it is wise to cut holdings in times of excessive valuation. High share prices can be thought of as a wall. Climb on too high and you can get hurt. For example, a value buyer would consider purchasing clothing retailer Esprit, a company that could rise further if stellar earnings growth continues, but the downside risks could be long and painful.

Mr Measor does not have an opinion on the United States but is upbeat on Hong Kong, saying the market is far from overbought. His weekly column published in the Chinese language magazine Eastweek is up 196.2 per cent since launch in 1999. That success has helped attract more than 700 paying subscribers to daily articles, published on Quamnet - a local market website similar to the US financial website Motley Fool.

He left Britain for Singapore as a young accountant in 1955. Later he moved to Hong Kong and worked as an Asian equities fund manager for Dao Heng Bank in the late 1980s. Despite a short stint trading Asian shares in Britain, he has been a permanent fixture in the region for five decades.

He says investors might be confused by Mr Buffett's new-found conservatism - especially when China offers all kinds of good bets for shares listed in Hong Kong.

Almost half of Mr Measor's Eastweek portfolio are H shares with solid earnings.

Most of the selections are a reflection of the Benjamin Graham school of thought, with a bias towards income-generating shares with good growth prospects. Stocks should return 10 to 15 per cent annually, counting dividends and share price appreciation.

Many of the big blue chips in Hong Kong may look boring, but actually have a sexy profile. Before buying, he says, try to imagine what a company would look like in five years, such as HSBC. 'It is not that they are so big they can't expand, but rather because they are so big they can.'

He acknowledges high-profile players are paring down risk and cutting stock holdings, especially in the US, over concerns about the dollar's health. He cautions, however, that if confidence in paper money falters, there could be a panic for real assets including shares of firms with solid earnings.

'Because of the crash or the potential crash, that is why you need to be fully invested,' he says. 'You are immunised from inflation.'

Measor's choice

HSBC

Swire Pacific B

Manulife

PetroChina

China Mobile

Hang Seng Bank

PCCW

China Life Insurance

Huaneng Power

Cathay Pacific