This Fund Manager Beat Buffett to Swiss Re

No matter what the market pundits say, if the American economy sneezes, the world will still catch a cold.

"In many ways we are more integrated than we used to be, but on a relative basis, we have not slipped too far as the dominant player in the global economy," says Jim Moffett, portfolio manager of the $3.5 billion (UMBWX - Cramer's Take - Stockpickr)UMB Scout International (UMBWX)fund. "The big change is that China is slowly taking over Japan's slice of the economic pie."

Moffett's fund has been anything but sickly, returning an average of 16% annually over the past three years and 20% over the past five, well ahead of the benchmark MSCI EAFE Index. Fund tracker Morningstar blesses it with a full five stars.

Moffett admits that international stocks, especially those of Asian exporters, may struggle in the near term as U.S. consumers curtail their spending. European producers, he points out, are already feeling the effects of the strong Euro.

But even as a U.S. slowdown infects its trading partners, the global economy dictates that investors should maintain a portion of their asset allocation in foreign stocks. And since that's the diagnosis, Moffett has some potential money-making cures, such as Potash of Saskatchewan(POT - Cramer's Take - Stockpickr).

"Potash of Saskatchewan is the Saudi Arabia of Potash," says Moffett. "They can turn capacity on and off at will."

Moffett continues to like Potash despite the stock's 180% rise over the last year, mostly because corn and grain prices are still booming due to increased ethanol demand and a higher standard of living in developing countries.

Commodities are not the only things spiraling higher in price and demand -- so are drugs. As a result, Moffett owns Israel-based Teva Pharmaceuticals(TEVA - Cramer's Take - Stockpickr), the world's largest generic drugmaker.

"They are a positive force in any political plan to lower health-care costs," says Moffett. "Listen to any of the candidates, especially on the Democratic side, and you will hear them say that health care spending is going up. Meanwhile, voters want the costs to go down. So Teva is part of the solution."

In South America, Moffett's play is oil producer Petrobras(PBR - Cramer's Take - Stockpickr) which is one of the few major oil companies increasing production.

"Petrobras just announced a huge discovery and Brazil's economic and political stability makes it a preferable supplier," says Moffett. "Certainly better than Venezuela."

Illustrating how far and how quickly the world's perception of risk has shifted, Moffett's investment in Petrobras seems tame compared to his recent interest in Swiss Re, the insurance giant struggling to overcome subprime concerns.

"There are worries about their portfolio," says Moffett. "But the stock trades at 7 times earnings and has a 4% dividend yield."

And as for Warren Buffett's 3% position in the stock?

"We liked it before him."