Thursday, October 19, 2017

What Marc Faber is Buying Right Now


Marc Faber discusses the recent action he is seeing in the markets and how he sees things unfolding going forward. Is gold still a good investment, or are there now better opportunities? Will the market continue onward with its rise? Tune in to learn more.

- Source, CNBC


2017 UK Great Britain Silver Britannia 1 oz Brilliant Uncirculated Royal Mint

Marc Faber Won't Apologize for Recent "Racist" Comments, Doubles Down


Prominent business newsletter writer Marc Faber stood by racist remarks he made this week that led to his dismissal from several corporate boards, justifying them on freedom-of-speech grounds.

On Tuesday, three well-known publicly traded Canadian companies promptly dismissed Mr. Faber, a Thailand-based investor and publisher of a well-read investment newsletter, from their boards, after the publication of his latest Gloom, Boom & Doom Report, which contained the statements: "Thank God white people populated America and not the blacks," and "at least America enjoyed 200 years in the economic and political sun under a white majority."

The remarks went viral, causing widespread outrage, with commentators blasting Mr. Faber for his insensitivity and blatant racism. Ivanhoe Mines Ltd., which was one of the companies that sacked Mr. Faber, said in a release on Tuesday it "deplores" his views about race. U.S. business television networks also distanced themselves from Mr. Faber, with CNBC, Fox and Bloomberg stating he is no longer welcome as a guest.

He isn't likely to pop up any time soon on Canadian business television either.

"Mr. Faber will not be appearing on BNN in the future," said a Bell Media spokesperson in an e-mail to The Globe and Mail.


In the face of all of this backlash, Mr. Faber is standing by his remarks. In a series of e-mailed answers to The Globe, Mr. Faber said he did not regret his comments about race, and would not change a word of his missive, citing freedom of speech rights.

"Why should I regret stating historic facts?" he wrote.

When asked if he knew in advance that that the publication of his commentary would result in him being fired from corporate boards, he replied; "If saying what I said leads to these consequences I prefer not to be on these boards."

"I think the corporate world is now run by compliance people. In this context I understand their firing me," he added.

In addition to Ivanhoe, Sprott Inc. and NovaGold also cut ties with Mr. Faber on Tuesday. He also confirmed to The Globe that U.S-based Sunshine Silver Mining Corp. and Vietnam Growth Fund have also let him go.

"One CEO stated that I must have been on some drugs when I wrote my Gloom Boom & Doom report," wrote Mr. Faber, who doesn't recall which CEO make that remark.

"Since I have only taken cocaine three times and marijuana about ten times in seventy years, I did not think these were appropriate comments, " he added.

Richard Leblanc, associate professor of law, governance and ethics at York University, called Mr. Faber's after-the-fact refusal to apologize and the doubling-down on his remarks "very anomalous."

"His reaction is odd," Mr. Leblanc said.

"It actually makes it worse."

Mr. Leblanc says the zeitgeist has changed somewhat since Donald Trump ran an election campaign and subsequently is running a presidency, occasionally based on making derogatory comments, refusing to apologize and then doubling down. Others in the public eye now feel they have "permission" to do likewise, he says, despite corporate boards having no tolerance for such remarks.

Canadian boards in particular are much less forgiving and tolerant than American boards when it comes to off-colour remarks pertaining to race, religion and sexism, Mr. Leblanc says. It's also becoming much more prevalent in North America to do extensive background checks on prospective board members, so as to head off any scandals.

"What you don't want is a situation like this," he says.

"It's an incredible distraction."

As for Mr. Faber, he admits that his comments will cost him economically. The three Canadian board seats alone paid him about $390,000 a year. He is also less likely to be in demand for speaking engagements, and his newsletter, which costs $300 (U.S.) a year per subscriber, may see a decline in popularity, as he will have little or no free exposure any more on business television.

"Economically it will be a huge loss," Mr. Faber said.

"I shall go back to being a waiter."



Monday, October 16, 2017

Marc Faber: I've Increased My Positions in China


Marc Faber, editor of The Gloom, Boom & Doom Report, weighs in on the outlook for emerging markets and says the sentiment about China is turning more positive.

- Source, CNBC

American Buffalo 1oz fine silver round

Friday, October 13, 2017

Monday, October 2, 2017

Marc Faber: This Is Your Best Bet Against Cyber Terrorism

Earlier this month, famous investor Marc Faber reiterated something we've long told our readers: You need to own gold. And you need to own it now.

Especially in the face of cyberterrorism.

In a recent interview with Metal Masters, Faber noted that the biggest geopolitical risk for Americans today is not a conventional war, but rather cyberattacks that could take down the entire U.S. power grid.

If that were to happen, noted Faber, gold would become an "irreplaceable medium of exchange."

"It's good to have a diversified asset outside of the banking system and not financially related," said Faber. That way, if cyber hackers did go after the power grid – or the stock market – you would have investments not tied to either of them, according to Faber.

But cyberattack threats are not the only reason you should have some gold in your portfolio now. In fact, Money Morning Resource Specialist Peter Krauth is watching a gold price catalyst that makes the precious metal a valuable asset even without the risk of a cyberattack…

Gold Prices Are Set to Rise in September Thanks to Congress

On Sept. 29, a U.S. government deadline could be responsible for the next gold price rally in 2017. That is, if members of Congress don't agree on one important issue: the debt ceiling.

The debt ceiling limits how much debt the federal government can carry at any given time. Right now, the current debt level of $19.9 trillion is just a hair away from the $20.1 trillion ceiling.

Unless Congress agrees to raise the ceiling by the deadline, the government will essentially run out of money and will no longer be able to cover its expenses...


- Source, Money Morning, Read the Full Article Here

Friday, September 29, 2017

Gold and Cryptos Are Rising Due to Distrust in Paper Money

I think gold has bottomed out about 1.5 years ago in December 2015. Then we had a strong performance in 2016 where we came back. At the end of last year, we were again at a relatively low level and stocks were depressed. Since then gold mining ETF is up more than 18 percent vis-à-vis DSNP which is up by 9 percent. There are many gold shares that are up between 30 and 300 percent. In my view, the media in the U.S. has a very strong bias for FAM and FAM-related stocks. 

The mining sector does not obtain or receive the necessary attention from the media in the U.S. So, people don’t know how well gold shares are doing. You take American Barrick, Newmont Mining..these are big companies. From December 2015 to today, they are up maybe by 300-400 percent. That people don’t talk about. They talk about Google, Amazon. But the strong performance of the mining companies over the last 2-3 years is not mentioned. 

Now they had a big move recently because gold broke out above 1,300 dollars an ounce. So, they are near term overbought. But any investor when he thinks through..in Jackson Hole, you encounter the typical group thinking phenomena. Yellen, Draghi and Kuroda talking together. Of course they coordinate monetary policies and of course they will print more money in the long run. So the purchasing power of paper money is going down and so I would own some gold. The new thing is the cryptocurrencies. That is a wonderful thing. 

Why do we have crypto currencies? We have it because an increasing number of people don’t trust paper money anymore and they don’t want money that is controlled by the central banks, that pollutes Jackson Hole.

- Source, Bloomberg Quint

Tuesday, September 26, 2017

China Has a Credit Bubble, But So Does the Whole World

I think the beauty about Asia, in terms of being an active manager, is that markets do not move all in concert. There are some markets that are strong. Let’s take the Indian market. It bottomed out in September 2013 after around 17,000 on the Sensex and since then its up more than 80 percent. Many other markets since 2013-14 are actually down. And so India had a huge move. This wasn’t the case for China until recently. 

Recently, China has been picking up. The economy looks slightly better at the present time because there is also a massive injection of liquidity both through the government and the banking sector. Suddenly now, western investors are realising that maybe we are being bearish about China. Yes, they have a credit bubble but so does the whole world. Maybe the Chinese credit bubble can be managed whereas in other countries the credit bubble may be a bigger problem particularly with respect to pension firms and unfunded liabilities. 

So, the money is suddenly flowing into China and, I have to say, I am not quite bullish about China. But, more than a year ago, I started recommending Macau gaming stocks, asset play on the Chinese recovery. Most of these stocks have almost doubled in price.

- Source, Bloomberg Quint

Saturday, September 23, 2017

It’s A Miracle India Grows At All Given Its Horrific Bureaucracy


I had argued for years that I would rather be invested in India than in the U.S. But I have also pointed out that it’s actually a miracle that India grows at all given the horrific bureaucracy India has. This is now really a case where it’s a miracle that India grows at all given the bureaucracy that it has. I tell you, this is about the worst encounter in the whole world.


Wednesday, September 20, 2017

Marc Faber: Trump will be a much better president for world peace


Marc Faber, editor of the “Gloom, Boom & Doom Report”, explains why he thinks a Donald Trump presidency may not be such a bad thing for the global economy.

- Source, CNBC

Sunday, September 17, 2017

Marc Faber: Canada needs to diversify away from U.S. trade dependence



Marc Faber, editor and publisher of the Gloom, Boom & Doom Report joins BNN to discuss why Canada needs to diversify its trade policy away from the U.S.

- Source, BNN

Thursday, September 14, 2017

In The Age Of Cyber-Terrorism, Every Investor Must Own Gold

Take it from “Dr. Doom”: own some physical gold and keep it out of the banking system.

Dr. Marc Faber, a legendary investor and the editor/publisher of the Gloom, Boom & Doom Report, is well known for his contrarian investing style.

In a recent Metal Masters interview with the Hard Assets Alliance, he noted that the biggest geopolitical risk for Americans today is not a conventional war but rather cyber-attacks that could take down the U.S. power grid.

In such a scenario, gold would become an irreplaceable medium of exchange. But it’s not the only reason to own gold today.

Diversified Assets Outside the Banking System

Faber grew up in Switzerland right after World War II, a tough time that caused his family to distrust paper money and taught him the importance of precious metals as a safety net.

Faber remembers how his father talked about rich people as millionaires. “That, in the ‘50s and ‘60s and ‘70s, was a lot of money. Today, a million is nothing at all—small change. Unfortunately. When people talk about, ‘Oh, there is no inflation in the system,’ this is nonsense. Compared to assets, money has lost a tremendous amount of purchasing power.”

After working on Wall Street for over two decades, Faber’s assets consisted mainly of bonds, equities, and real estate. He says it was in the 1990s when he realized that “it’s good to have a diversified asset outside the banking system and not financially related” and began to purchase some physical gold every month.

The Fed largely ignores gold as an asset, he says, because “gold is an embarrassment to central banks.”

- Source, Forbes

Monday, September 11, 2017

Marc Faber: There will be another ‘massive’ financial crisis in my lifetime


Marc Faber, editor of the ’Gloom, Boom & Doom’ report, speaks to CNBC’s ’Squawk on the Street’ crew on his market outlook. Faber says he expects to see another 'massive' financial crisis in his lifetime.


Friday, September 8, 2017

There's no all-clear signal in the markets


Marc Faber, editor and publisher of The Gloom, Boom & Doom Report, discusses his perpetually bearish outlook for markets.

- Source, CNBC

Wednesday, August 30, 2017

Dr Doom Marc Faber won’t buy these four Nifty stocks

‘Dr Doom’ Marc Faber, a perennial bear investor who has been surprisingly bullish on Indian stocks, has started turning a little cautious on Indian equities. In an interview to CNBC TV18 this week, Marc Faber — renowned investor and author of Gloom, Boom & Doom report — reiterated his belief that the Indian equity markets will outperform the US markets over the next 10 years, but added a note of caution over valuations, given the recent run up in the benchmark indices.

Further, Marc Faber also raised concerns on the valuations of individual stocks which have high P/E multiple ratios of 50x or above. “Some Indian valuations are around 50 times the earnings, which I would regard to be on the high side,” Marc Faber said in the interview. Even though he conceded that a collapse in such stocks may not be immediately due, Marc Faber said that he would still not buy such stocks.

“The stocks may not necessarily collapse right away… maybe they would actually go to 60 times the earnings or even 70 times the earnings,” Marc Faber said, adding that a lot of things have to fall in place perfectly to buy those stocks at so high valuations, and that he would rather stay away from such shares. “I am just saying that once you pay 50 times the earnings for a stock, everything has to go perfectly well to justify that valuation. I wouldn’t buy a stock at 50 times the earnings,” he said.

Indian equity markets are on a rampage of late. Benchmark equity indices Sensex and Nifty have risen over 21%-22% so far this year since January, with NSE Nifty-50 hitting a historical five-digit mark of 10,000 points for the first time ever. With it, the sentiment has lifted several stocks to unprecedented levels in terms of valuations. Within the NSE Nifty 50 universe itself, there are at least four stocks trading above the price-earnings multiple of 50 times of above — a level too high to justify investment by Marc Faber’s standards.

Bharti Airtel Ltd ended at Rs 413.35 on Friday and has rallied over 45% since its November lows after demonetisation. The shares of India’s largest telecommunication services provider are trading at over 61 times earnings. By contrast, shares of Reliance Industries, whose Jio telecom service is the main competitor pressurising Bharti Airtel’s margins, are at a P/E multiple of 16 times.

Asian Paints Ltd, at Rs 1,152.85 at Friday’s close, has a price/earning ratio of over 60x. The stock of the paints and chemicals company has rallied over 35% since its December lows. Earlier this week, Asian Paints said its fiscal first quarter net profit fell over 20% on-year to Rs 440.74 crore, missing most analyst estimates by a wide margin.

Hindustan Unilever shares, which ended at Rs 1,154.1 on Friday, have a P/E multiple of over 56x. The stock is up over 47% from its last low levels seen in December. One of the leading FMCG companies in India, Hindustan Unilever is one of the firms expected to get a huge boost from the growth in local consumption and ease in movement of goods following the implementation of GST earlier this month.

Bosch Ltd shares are not just expensive by their P/E multiples, but by their prices as well. At Rs 23,768.55 on BSE at Friday’s close, Bosch shares have a price-earning ratio of over 50x. Since November, Bosch shares are up over 32%.

Not only this, there are at least four other Nifty 50 shares which are at a PE multiple of between 40x and 50x. Cement maker ACC Ltd and farm tractor and commercial vehicles maker Eicher Motors are at respective Price-Earnings multiples of over 48x and 47x. Whereas, pharmaceutical major Cipla Ltd and another cement maker Ambuja Cements Ltd have P/E multiples of over 45x and 41x respectively.


Sunday, August 27, 2017

US stocks are overheated; so Marc Faber is buying Asian shares, and gold

Marc Faber’s disenchantment with equity shares, especially US stocks, is well-known. However, it is not very often that the 80-year old veteran gives others an insight into his portfolio. Often referred to as Dr Doom, renowned investor Marc Faber — the author of Gloom, Boom & Doom report — said this week that he has allocated only a quarter of his portfolio to equities, and that too, mainly in Asia. The remaining three-fourths of Marc Faber’s money is mainly divided between real estate, precious metal and gold shares.

The reason is simple: Marc Faber is not a believer in the rally in the US stock markets, and seems to be openly opposed to the US President Donald Trump’s ideas! “Don’t be overly optimistic,” Marc Faber said in an interview to CNBC television earlier this week. Just before that, Donald Trump had tweeted: “Highest Stock Market EVER, best economic numbers in years, unemployment lowest in 17 years, wages raising, border secure, S.C.: No WH chaos!”

However, Marc Faber, as usual, was unimpressed. “If you look at the markets, there are lots of stocks that are lower, and significantly lower than they were at the highs. And so, it’s not an all-clear signal,” he said, adding that the risks have increased. Marc Faber pointed out to huge disparity between the returns in gold and gold ETF index. While the S&P index is up 23% since January 2016, gold has returned 20% in the same period. Meanwhile, the GDX, the Gold ETF index, is up by 80% since January 2016, indicating that the markets are very distorted and investors are in a very artificial environment, he said.

To counter this, as alternatives to US stocks, the perennially bearish investor invests in “very simple” areas of investment involving real estate, overseas equities and commodities. “I don’t change that asset location a lot, but I am aware that there is a risk because if equities go down, then obviously all my bonds will likely go down,” Marc Faber said.

He revealed that he allocates 25% of his portfolio in real estate, mostly in the Asian markets, adding that he has also taken exposure in precious metal and gold shares. In the same breath, Marc Faber added that the financials in Europe look reasonably attractive.

Earlier last month, Marc Faber, who seldom minces words, reinforced his preference for investing in India over the US on the back of a strong government led by Prime Minister Narendra Modi. Not only this he also described the US government as “corrupt like hell”, adding to his list of strong phrases to refer to the western administration. Earlier this year, he had used the phrase “rotten western democracies” while citing his preference to invest in India over the US markets.


Thursday, August 24, 2017

Why Marc Faber Predicts a Correction in the S&P 500 Index

Faber said in the interview that although the US indexes (QQQ) (DIA) are making record highs, investors should be cautious about the market rally. He said the market is “very distorted.” So could investors face a correction in the market (SPY) in the near term?

Since January 2016, the S&P 500 index (SPX-INDEX) has risen nearly 23.0%, as of August 3, 2017. Gold prices (GLD) have risen nearly 16.0% during the same period. The SPDR Gold Shares (GLD), which tracks the performance of gold, rose nearly 17.0%, and the iShares MSCI Global Gold Miners (RING), which tracks the performance of gold miners, rose nearly 64.0% during the same period.

In the past, we’ve seen that when the equity market tumbles, investors moved toward safe-haven assets such as gold and the Japanese yen (FXY). Gold outperforms in that scenario. In 2008, when the global debt crisis spooked the equity market, gold rose about 145.0% from September 2008 to July 2011, while the equity market took a huge fall. Since July 2011, the S&P 500 index has risen about 62.0%, touching its high of 2,130 in July 2015. During the same period, gold fell about 92.0%.

It shows that the equity market and gold have an inverse relationship. They are negatively correlated. Between January 2010 and December 2015, GLD had a negative correlation factor of 0.89 with the S&P 500 index. However, in the present situation, both the S&P 500 index and gold are moving in the same direction. According to Faber, this situation might lead to a great disruption in the market.


- Source, Market Realist

Monday, August 21, 2017

Marc Faber touts Three alternatives to what he sees as risky US stocks

Marc Faber, the editor of The Gloom, Boom & Doom Report, told CNBC on Monday that risk has increased as stocks have moved higher.

"Don't be overly optimistic," the widely followed newsletter analyst also known as "Dr. Doom" said on "Squawk Alley." "If you look at the market, there are lots of stocks that are lower, and significantly lower than they were at the highs. And so, it's not an all-clear signal."

Faber added he believes the market is "very distorted" and said investors are in a very artificial environment. He then explained what he called his "very simple" areas of asset location, which break down to three alternatives to U.S. stocks, including real estate, overseas equities, and commodity investments.

"Twenty-five percent in real estate; my real estate is mostly in Asia. Twenty-five percent in equities; I have mostly Asian equities," he said, adding financials in Europe look reasonably attractive. "Then I have some precious metal and gold shares."

"I don't change that asset location a lot, but I am aware that there is a risk because if equities go down, then obviously all my bonds will likely go down," he said.

Faber spoke as the three major indexes were on track for their best month since February. The Dow Jones industrial average hit a record high Monday as Wall Street cheered on what's been a strong earnings season.

Equities reached record highs last week, but some strategists say the technical backdrop for stocks shows investors should be cautious.

- Source, CNBC

Friday, August 18, 2017

Volatility will pick up Massively, says Marc Faber

Volatility will pick up ‘massively’, says Marc Faber from CNBC.

Marc Faber, editor and publisher of “The Gloom, Boom & Doom Report," talks about the outlook and volatility for markets.

Tuesday, August 15, 2017

Why Marc Faber is overweight EMs

Why Marc Faber is overweight EMs from CNBC.

Marc Faber, editor of The Gloom, Boom & Doom Report, says President Trump's policies have actually been good for foreign stock markets.

Saturday, August 12, 2017

Trader takes on Marc Faber

Trader takes on Marc Faber from CNBC.

Scott Nations and Marc Faber, editor of the Boom, Gloom and Doom Report square off on their views of the market.

Wednesday, August 9, 2017

Marc Faber: There's no all-clear signal in the markets



Marc Faber, editor and publisher of The Gloom, Boom & Doom Report, discusses his perpetually bearish outlook for markets.

- Source, CNBC

Thursday, August 3, 2017

Marc Faber is Warning - Be Cautious On Industrial Commodities

Commenting on the banking sector, Faber said that he is positive on financial stocks such as banks and particularly insurance companies. They might be going through near-term pain but eventually they will clean up their balance sheet.

The long-term potential for banking as a sector is huge but equally we have to understand there are huge technological changes underway in the world, explains Faber. Financial institutions who move along with technology will do well while other will not do that well.

Financial stocks which have underperformed for the year will outperform. Secondly, Feber said that in his asset allocation, I always have 25 percent in real estate.

“I think some real estate in India may not be fully attractive because it may be fully priced. But, on the other hand, there is still plenty of real estate which will now move up substantially in value,” said Faber.

Commodities

Commenting on gold, Faber said that the price of the yellow metal went up by 8 percent last year against the US Dollar. It saw strong outperformance. This year, the gold is already up 7 percent against the USD whereby Dollar has lost 7 percent against the euro. In euro terms we are even.

“Some agricultural commodities are trading at the lowest point and could still bounce back in the second half. But, given the slowdown in growth around the world except India, I would be little bit cautious on industrial commodities,” he said.

- Source, Money Control


Monday, July 31, 2017

Acche din over for the Indian market? Marc Faber sees slight correction in second half

The Indian market rallied as much as 22 percent so far in 2017 in dollar terms but it is unlikely that we could see a similar performance in the second half of 2017, Marc Faber, editor of The Gloom, Boom & Doom Report said in an exclusive interview with CNBC-TV18.

“In a world where we have artificially low-interest rates, the market rallied a little bit ahead of itself and could witness slight correction. But, long term story still looks promising,” he said.

He further added that equity markets around the world in 2017 saw a strong performance of 17-22 percent in Asian markets including India as well as in Europe.

“Hence, the second half would be difficult and I would not be surprised to see US markets going down or the leadership changing. So far the leadership in US markets is held by bellwethers such as Apple, Netflix, Facebook, Amazon, Google etc. and that is about to change.”


This pattern will also apply to Indian markets where the leadership will change, but the only difference is that the leadership would shift from index to stock specific names.

“Going into the second half, India will be more of a stock pickers market and not an index market,” said Faber. There could be some volatility in the short term, but, for the long term, the story looks good.

In the short term, the Indian market could correct here but given favourable fundamentals in long term, Faber is not overly bearish. But, as I said – “If I have to invest for 10 years and choose between Indian and US, I would chose India because it can outperform the US,” said Faber.

- Source, Money Control

Thursday, July 27, 2017

Why Marc Faber is overweight EMs


Marc Faber, editor of The Gloom, Boom & Doom Report, says President Trump's policies have actually been good for foreign stock markets.

- Source, CNBC

Sunday, July 23, 2017

Marc Faber: Still bearish

Marc Faber, investor and author of the Gloom, Boom & Doom Report, remains very bearish. He reckons we could be heading for “an epic decline in asset prices… after eight-plus years of bull markets”, which have left valuations at historically high levels. Another warning sign is that recent gains in most major indices, especially the Nasdaq in the US, have been “driven by a small number of stocks”.

The market’s dependence on the strong performance of a few stars is particularly worrying given that many well-known technology companies, including Amazon, Netflix and Apple, experienced hefty falls at the start of this month. Even if this was just a “correction”, there has clearly been a jump in volatility. One way or another, “when things finally start going down, they’ll go down a lot”, says Faber.

He is also worried about political risk. Over the past 30 years “an increasing share of wealth has gone to big corporations and wealthy individuals”. This will lead to demands for either “a big hike in taxes” or “policies that will lead to a big asset-price deflation”. The problem is compounded by the fact that both governments and companies are hiding their true debt levels by deliberately underfunding pensions obligations. In the case of companies, they are using the money to buy back shares instead.

Yet central banks are likely to try to delay the day of reckoning by printing even more money, meaning that there could even be an initial “lurch to the upside” with “QE99” pushing prices even higher. However, Faber is sure that “eventually the system will break”. As a result, he stands by his prediction that shares prices are set to fall by up to 40%.

- Source, Money Week

Thursday, July 20, 2017

It’s going to end extremely badly, with stocks set to plummet 40% or more


If the man often hailed as the original "Dr. Doom" is right, the stock market could see another "lurch" higher — at which point investors may want to cash out quickly and run for cover.

Marc Faber, the editor of "The Gloom, Boom & Doom Report' and a perennial bear, isn't backing down from his latest dire prediction that would send stocks plummeting by 40 percent or more.

A drop of that size could take the S&P 500 Index down from Friday's closing price of 2,438 to 1,463.

He used the meteoric rise of FANG stocks, which reflects Facebook, Apple, Netflix and Google (Alphabet), as a glaring bearish signal.

"We've had more than eight years of a bull market. The Nasdaq is being driven by very few stocks," said Faber on Friday's "Trading Nation." That rally "is not a particularly healthy sign from a technical point of view, and valuations are very high," the investor added.

Faber's comments come exactly two weeks after the Nasdaq set its latest intraday record high of 6,341.70.

"You know we have a lot of volatility, and when things will start to go down, they'll go down a lot," he said.

Faber is deeply concerned that wealth has flowed to big corporations and affluent people. He believes the imbalance could eventually disrupt the markets as we know it.

"Either people with money will be taxed heavily ... or we'll have a massive deflation in asset prices — I repeat: massive," he warned. "Eventually the system will break."

Faber is known for correction calls over the years which have never materialized. But he's sticking by his latest call, acknowledging critics have "questioned my sanity."

"We could print enough money that the Dow goes to 100,000. All I'm saying is it will end very badly, extremely badly," he said.

But it's not all gloom. Faber notes it could also give investors a rare "out-sized" buying opportunity similar to 2003 and 2009, when deep corrections gave traders a chance to load up on cheap assets.

- Source, CNBC

Monday, July 17, 2017

Marc Faber: There will be another massive financial crisis in my lifetime


Marc "Dr. Doom" Faber has a warning for investors — brace yourselves for another financial crisis.

Just last week, Federal Reserve Chair Janet Yellen said another crisis like the one in 2008 was not likely to happen "in our lifetime."

Faber told CNBC's "Squawk on the Street" on Monday that "I'm 71 and for sure in my lifetime, unless I have an accident tomorrow, I will see another financial crisis and a massive one."

He's particularly concerned about the high levels of debt around the globe.

"We have a colossal credit bubble in the world. Can it expand? Yes, but it cannot expand forever. One day there will be a limit and one day there will be another huge crisis because the debt level today is higher than it was in 2007," the editor The Gloom, Boom & Doom Report said.

The noted bear also has been calling for a big drop in the U.S. stock market and believes "we have a bubble in everything."

That said, he told CNBC, "I'm less bearish than I used to be. That worries me."

Because no one knows what the world will look like five years from now, staying diversified is key, Faber said. That means some money in real estate, stocks, bonds and precious metals.

"Although I'm pessimistic about the world and especially about political and social developments in the western world, I can still sleep well at night because I have the 25 percent exposure to equities."

He would look at international stocks over the U.S. market.


- Source, CNBC

Tuesday, July 4, 2017

Faber: I would rather invest in Europe than US


Marc Faber, editor and publisher of "The Gloom, Boom & Doom Report," discusses a bubble in the U.S. markets and how bonds and tech stocks could be to blame.

- Source, CNBC


Saturday, July 1, 2017

Faber: Gold Isn't Down as Much as Apple


Gloom, Boom and Doom Report Publisher marc Faber discusses the markets, gold and his investment strategy on Bloomberg Television's "Street Smart."

- Source, Bloomberg


Wednesday, June 28, 2017

Trump provides 'great entertainment' overseas, Marc Faber says


'The Gloom, Boom & Doom Report' editor Marc Faber discusses why Amazon, Netflix and Tesla shares will each drop 10 percent in a single trading session, and his views on President Trump.


Sunday, June 25, 2017

Faber: China's Unwind Will Be a Disaster


Marc Faber, managing director and founder of Marc Faber Ltd., comments on the state of the Chinese economy. He speaks with Trish Regan and Matt Miller on Bloomberg Television's "Street Smart."

- Source, Bloomberg

Thursday, June 22, 2017

There Is A Bubble In The Most Popular Stocks: Marc Faber


Marc Faber, Author, The Gloom, Boom & Doom Report states that there is a bubble in the most popular stocks.


Monday, June 19, 2017

Marc Faber: Asset holders will lose 50%

Full disclosure: Marc Faber is always preparing for a stock apocalypse. (That's why he’s commonly referred to as “Mr. Doom.”) Still, he insists, there’s method to his misery. And right now he sees two red flags flapping in the market.

One: On the New York Stock Exchange, there are currently more stocks purchased on margin—that is, with investors borrowing money to buy—than since at least the 1950s. That tends to happen when the stock market is expensive, as it is today.

Prices are actually out of control, Faber says. The historical average price-to-earnings ratio is around 17—but it's around 30 today.

Once people start selling, Faber warns grimly, there will be an avalanche. “I think a realistic scenario is that asset holders will lose 50% of their assets," Faber says. "Some people will lose everything.”

His other major concern is that only a small number of stocks are driving the bulk of the stock market’s ascent. Indeed, just five companies accounted for almost a third of the S&P 500’s total gains in 2016. This means that investors are relying on fewer companies to carry the market, he points out.“If only a handful of shares are moving up, it’s a sign,” Faber says. “The market isn’t healthy.”


- Source, Time


Wednesday, June 7, 2017

Modi better than Trump; India will outperform US over 5-10 years

On a day when market scaled record high on Tuesday, Marc Faber cemented bullish sentiment further by saying that India will continue to outperform the US and other western markets, he said in an exclusive interview with CNBC-TV18.

The editor and publisher of The Gloom, Boom, and Doom Report said that India has got a new government with (Prime Minister) Narendra Modi leading the charge from the front, has much better chance of implementing reforms than say US President, Donald Trump.

Commenting on the economy he said that central banks in emerging economies (EMs) such as India are much more responsible and educated about perils of money printing. RBI’s former governor Raghuram Rajan & present governor Urjit Patel have done a good job in stabilising the rupee.

Indian market is up 13 percent in local currency and in dollar terms, the market is up close to 18 percent led by a rise in the rupee. The currency is very important for foreign investors. A strong currency can pull foreign investors towards India, he said.

“I remain constructive on India and over the next 10-20 years, India has the potential to grow at 5-7 percent each year – which is huge compared to growth rate seen in the US or Europe,” said Faber.

India, according to PwC, in 20-30 years will become a second largest economy in the world similar to China. He also highlighted that only marginal amount of domestic saving find its way to Indian equity markets.

The wealthy families should at least put 20 percent of the money in Indian equities or Indian properties and direct investment because it is time to look forward.

Today, US stock market is 53 percent of the global stock market capitalisation now. But, in 10-20 years, it will be reduced to 20 percent and India and China will hog lion share up to 50 percent, highlights Faber.


- Source, Money Control

Saturday, June 3, 2017

Most Stocks Are Going to Lose Money - Except Mining Stocks

Well, basically some people say that the central banks are out of bullets. This is not my impression. They can keep on printing money and boost asset prices where by not all asset prices will go up, some will go up and some will go down. But the point I want to make is the central banks are not really out of bullets. The economy, if it weakens some stocks will outperform others, in other words recently you’ve seen the weaker in automobile stocks, so there is still a selective process in the market. The stocks that have gone up the most recently are actually mostly companies with very little earnings, very high evaluations, Tesla, Amazon, Netflix and so forth and we’ll have to see.

All I can say is when I look around the world, I don’t see any particularly good values in the U.S. except in mining companies and I think some of the interest rate sensitive stocks are again relatively attractive because I expect the economy to disappoint, especially if the Fed continues to increase interest rates and so a short increase in interest rates could mean some further weakness in bond prices but eventually bond prices could rally again and this is my view that the U.S. by any standards compared to historical evaluations, compared to Europe, compared to Asia, compared to emerging markets the U.S. is very expensive. Now, can it go up another ten percent? Maybe 20 percent? Yes, between December 1999 and 2000 March 21 when the stock markets peaked out the Nasdaq was up more than 30 percent, but was it a good buy? No, everybody who bought at the time in the first three months of 2000 lost money.

So, my sense is that yeah people can buy stocks here but most of them are going lose money with the exception in my view, that mining stocks will perform reasonably well.

- Source, Marc Faber

Tuesday, May 30, 2017

Euro To Strengthen, Dollar To Weaken, Gold & Emerging Markets To Outperform

I think that in terms of the economy I don’t think the economy is as strong as people believe or as the statistics would show and recent trends have rather been indicating some weakness is auto sales, not a particularly strong housing market and we have several problems as a result of excessive credit. So, I think that the economy is not going to do as well as people expect and concerning the huge infrastructure expenditure that Mr. Trump has been talking about, it is about a trillion dollars over ten years, maximum. In other words, a hundred billion a year.

In China in 2016 in the first ten months the infrastructure expenditures were 1.6 trillion, in other words 16 times higher than what Mr. Trump is proposing. So just to put this in a perspective. Now throughout Asia and the emerging world there will be a lot of infrastructural expenditures in the years to come. The question is will stocks go up because of that, maybe some stocks will go up and some will not. So, we have to be now increasing the selective in what we purchase in terms of equities. My sense is that the economy in the U.S. is weakening and not strengthening.

- Source, Marc Faber via Value Walk

Wednesday, May 24, 2017

China Looks Quite Attractive Right Now


The Gloom, Boom & Doom Report’s Marc Faber reveals which areas would generate the most profits for investors.

- Source, CNBC

Saturday, May 20, 2017

Faber: The U.S. Economy is Terminally ill


Marc Faber of the Gloom, Boom & Doom Report tells CNBC's Jackie DeAngelis and the "Futures Now" traders why the U.S. economy is in trouble.


Wednesday, May 17, 2017

Marc Faber on investment strategy


Marc Faber, the editor of the Gloom, Boom & Doom report, discuss potential investments with Brian Sullivan.


Sunday, May 14, 2017

Trader takes on Marc Faber


Scott Nations and Marc Faber, editor of the Boom, Gloom and Doom Report square off on their views of the market.


Wednesday, May 10, 2017

Marc Faber: The biggest risk to markets right now


Marc Faber, aka Dr. Doom, discusses the markets and warns a giant pullback is on the way. With CNBC's Jackie DeAngelis and the Futures Now traders, Jim Iuorio and Scott Nations, both at the CME.

- Source, CNBC

Friday, May 5, 2017

Euro To Strengthen, Dollar To Weaken, Gold & Emerging Markets To Outperform

Mike Gleason: Well, to start out here Dr. Faber, before we get into some other stuff I wanted to hear your comments on the state of the U.S. economy. Now, it appears the Federal Reserve has finally gotten serious about moving rates higher at least modestly. U.S. equity markets seem to be discounting that fact, focusing instead on the so-called Trump trade. Markets are pricing in a huge infrastructure spending program and tax cuts stimulates that could overwhelm any modest tightening at the Fed. Now that efforts to reform healthcare seem to be failing we expected some of the optimism surrounding president Trump’s other initiatives would leak out of the stock market but so far that hasn’t happened.

Stocks remain near record highs and there isn’t a whole lot of interest in safe haven assets including precious metals. So, what are your thoughts here Marc? Is now a time to take some profits and move towards safety or is there still some good upside in equities?

Marc Faber: Well, I think that in terms of the economy I don’t think the economy is as strong as people believe or as the statistics would show and recent trends have rather been indicating some weakness is auto sales, not a particularly strong housing market and we have several problems as a result of excessive credit. So, I think that the economy is not going to do as well as people expect and concerning the huge infrastructure expenditure that Mr. Trump has been talking about, it is about a trillion dollars over ten years, maximum. In other words, a hundred billion a year.

In China in 2016 in the first ten months the infrastructure expenditures were 1.6 trillion, in other words 16 times higher than what Mr. Trump is proposing. So just to put this in a perspective. Now throughout Asia and the emerging world there will be a lot of infrastructural expenditures in the years to come. The question is will stocks go up because of that, maybe some stocks will go up and some will not. So, we have to be now increasing the selective in what we purchase in terms of equities. My sense is that the economy in the U.S. is weakening and not strengthening.

Mike Gleason: It is also possible markets aren’t responding to fundamentals and we ought to consider those ramifications. The advent of high frequency trading and massive intervention by central bankers could mean markets become more irrational than ever. It is possible for instance to see stock prices being bid higher despite slowing GDP growth, rising interest rates and congress failing to deliver fiscal stimulus here in the U.S. I mean, how artificial do you think markets are and to the extent today’s markets aren’t real, how much long will the central planners and bankers be able to maintain this illusion that they’ve created?


Marc Faber: Well, basically some people say that the central banks are out of bullets. This is not my impression. They can keep on printing money and boost asset prices where by not all asset prices will go up, some will go up and some will go down. But the point I want to make is the central banks are not really out of bullets. The economy, if it weakens some stocks will outperform others, in other words recently you’ve seen the weaker in automobile stocks, so there is still a selective process in the market. The stocks that have gone up the most recently are actually mostly companies with very little earnings, very high evaluations, Tesla, Amazon, Netflix and so forth and we’ll have to see.

All I can say is when I look around the world, I don’t see any particularly good values in the U.S. except in mining companies and I think some of the interest rate sensitive stocks are again relatively attractive because I expect the economy to disappoint, especially if the Fed continues to increase interest rates and so a short increase in interest rates could mean some further weakness in bond prices but eventually bond prices could rally again and this is my view that the U.S. by any standards compared to historical evaluations, compared to Europe, compared to Asia, compared to emerging markets the U.S. is very expensive. Now, can it go up another ten percent? Maybe 20 percent? Yes, between December 1999 and 2000 March 21 when the stock markets peaked out the Nasdaq was up more than 30 percent, but was it a good buy? No, everybody who bought at the time in the first three months of 2000 lost money.

So, my sense is that yeah people can buy stocks here but most of them are going lose money with the exception in my view, that mining stocks will perform reasonably well.

Mike Gleason: Let’s shift focus now and talk about what is happening elsewhere in the world, you’ve alluded to it in prior answers but you’re originally from Europe and now you live in Asia. Now, it’s easy for Americans to focus on domestic affairs such as the new president and lose track of important developments in other parts of the world. Can you update our listeners on developments you are watching in Asia? China in particular.

Marc Faber: Well, whether it’s sustainable or not the fact is that the Chinese economy has been improving recently, somewhat. Maybe it’s all driven by credit but for now they have stabilized the economy, it’s improving and it has had a huge impact on the prices on resources including copper and zinc and nickel and so forth and it has had a favorable impact on the Asian market. Earlier you asked me about the U.S… this whole euphoria about the performance of U.S. stocks, the fact is in Asia just about every market has outperformed the U.S. In Europe, just about every market has outperformed the U.S. measured in U.S. dollar terms. So, I think that the impact of an improving Chinese economy is being felt more in other emerging economies than say, in the United States.

Mike Gleason: How about Europe? The future of the European Union is in question with some important elections upcoming, banks there remain at risk and several if not most countries continue to struggle with slow growth and overwhelming debts. Give us your thoughts on Europe and how things might unfold there over the remainder of the year.

Marc Faber: Well, I’ve just written two reports recently highlighting that in Europe there are some companies, mostly utilities and infrastructure related companies that on a valuation screen appear relatively attractive.

- Source, Value Walk

Saturday, April 29, 2017

Marc Faber: India to Grow Between 4 And 7% in Coming 10 Years

The market has altered downwards and we are in a purchasing range. It does not matter even if India develops at 5% or 7% per annum but if think about the coming 10 years, you could simply anticipate an economy that grows all over on an average between 4 and 7% per annum, which is very a high growth rate.

I assume that earnings ultimately track the “GDP growth”. Presently, the estimations in India are satisfactory. But I have one thing to add. Just couple of years back, indexing has gained the tag of “new trend” around the world. Ample amount of money is been invested in a submissive way in ETFs—who are interested in buying index.

If we consider 2016, a huge difference can be seen in the achievements of distinct sectors in the United States—the gold shares being the best performing sector. Apart from it, energy sector performed best while biotechnology performed the worst. The world is again shifting toward “stock pickers’ era” wherein people give their best performance provided they are in the appropriate sector.

In the present year, some of the stocks related to the commodity will be of high interest; specifically the stocks including gas and oil. I have observed agricultural, fertilizer, and plantation companies to be the most interesting sectors. They have noteworthy future as prices have been very uncertain for agricultural commodity since 2011. These agricultural commodity prices will thus lead the game and put behind others resulting in increasing prices.

So this is what Marc Faber has to say about Indian economy. What are your opinions regarding the same? Feel free to share your thoughts.


Wednesday, April 26, 2017

Marc Faber: Buy European Stocks as US Plunge Looms

Investment guru Marc Faber warns savvy investors to buy European shares amid a looming U.S. market tumble.

“I would buy European stocks,” Faber told Fox Business Network. He said the U.S. market is “completely out of range” with the other world markets.

“Investors should understand that markets can also go down and it would not surprise me to see the inflated asset markets especially the financial markets being down 20 to 40 percent at some point,” the publisher of the Gloom, Boom & Doom report predicted.

Faber doesn’t believe all the media hype surrounding the raging bull stock market since Donald Trump won the election.

“ I think there will be a closing of this diverging performance with either Europe outperforming the U.S. or both going down or the U.S. going down more,” he told the Fox Business Network’s Charles Payne.

However, other business icons are much more optimistic.

Steve Forbes, chairman and editor-in-chief of Forbes Media, recently told Newsmax TV that he is optimistic that stocks have room to reach new records as President Donald Trump pushes forward with his pledge to cut taxes and regulation.

“Markets always try to anticipate the future. One of the reasons it had such a big surge since the election, especially small-cap stocks, is in anticipation of deregulation which the president started and I think he's going to follow through on that,” Forbes told Steve Malzberg on Newsmax TV's "America Talks Live."

- Source, NewsMax

Sunday, April 23, 2017

India, EMs outlook far superior than “rotten western democracies”


Marc Faber the author of The Gloom, Boom & Doom Report, is of the view that India will outperform the US over a 5-10 year period. In a conversation with ET Now Faber said, “India has done very well in 2017 and is grossly outperforming the US. Even if India grows at only 5%, it is still better than the US, Europe”. Citing a PwC report he said, India would be the second largest economy by 2050. “Outlook for the Chinese, Indian economy for emerging markets, in general, is far superior to the outlook in our rotten western democracies,” he told the business news channel.

He also suggested in investing into commodity stocks given the low prices of commodities. Marc Faber preferred to invest in commodity-related plays over financial assets. However, Faber cautioned that each commodity has to be analyzed separately. He also pointed out to a positive outlook for copper, as he said that the shift to electric cars will increase demand for the metal. Among other stocks, Marc Faber named real estate, travel & tourism and hotels as the sectors he likes. He said he sees a huge opportunity in real estate on the trend of buying 2nd homes, and added that domestic and international tourism will bring potential for hotel chains, travel companies.

Earlier this year, Marc Faber has suggested that the newly-elected US President Donald Trump’s policies are rather good for the emerging markets, contrary to the popular sentiment that such policies will restrict trade from the emerging economies and hurt them. “Everyone makes a big hoopla on the US markets going up this year,” Marc Faber had said in a TV interview to CNBC’s Squawk Box. “We are up 4.66%, (while) Hong Kong is up 9%, Singapore is up 9%, Mexico is up 6%, and Brazil and Argentina are up 20%,” he had said to drive home the point that Trump’s policies were “quite good” for the foreign markets.



Thursday, April 20, 2017

Marc Faber: Trump rally may not last long


History shows that the initial bump in markets might not stick around in the longer term, says Marc Faber, editor of The Gloom, Boom & Doom Report.


Monday, April 17, 2017

All paper currencies are DOOMED!: Marc Faber


Marc Faber, The Gloom, Boom & Doom Report, and Frank Berlage, Multilateral Partners Global Advisory, look at risks lurking in the markets.

- Source, CNBC

Monday, April 10, 2017

Marc Faber on stocks, bonds, gold and more


Marc Faber, the editor and publisher of “The Gloom, Boom & Doom Report,” speaks to Brian Sullivan.

- Source, CNBC

Thursday, March 30, 2017

Economist Marc Faber Warns Investors to Go Long on Gold, Silver, and Platinum in 2017

What is the Dr. Marc Faber prediction for gold and silver in 2017? Suffice it to say, Faber is a contrarian economist, which means he’s bullish on both investing in gold and investing in silver in 2017. Even though he’s a broad-based contrarian investor, his reasons for telling investors to go long on gold and silver are rock-solid.

Why should investors care what Faber says? After all, it’s easy to be a contrarian; just grumble about everything. But, to be a good contrarian investor, you need to know what you’re contrary about, and Faber does. A world-class economist-historian, Swiss-born Faber studied at the prestigious University of Zurich, where, at the age of 24, he graduated with a PhD in economics.

When it comes to making stock market predictions, he’s eerily well informed. He warned his clients to get out of the stock market before Black Monday. On Monday, October 19, 1987, the stock market experienced its biggest one-day crash in history. The Dow Jones Industrial Average (DJIA) spiraled, losing 22.6% of its value, or $500.0 billion.

He forecasted the Japanese bubble in 1990, predicted the collapse in U.S. gaming stocks in 1993, and anticipated the Asia Pacific financial crisis of 1997/98, and ensuing global volatility.

In his 2002 book, Tomorrow’s Gold: Asia’s Age of Discovery, Faber predicted the rise of oil, precious metals (including gold prices and silver prices), emerging markets, and China. He also predicted the decline of the U.S, dollar since 2002. As a contrarian investor, Faber is always on the lookout for opportunities. “Dr. Doom” was bullish for the U.S. dollar in mid-2008, just before it recovered.

Like all good contrarian economists, Faber wants his readers to make money, and he often discusses investing in silver and investing in gold. His analysis is based on economic, social, and historical trends, and he warns investors when widely accepted investments have become overpriced and risky. At the same time, Faber looks for opportunities in overlooked, unloved, depressed markets.

His motto, “Follow the course opposite to custom and you will almost always be right,” is just a little tough for most investors to handle. It’s easier to be a lemming and run blissfully toward the cliff than invest confidently based on things nobody wants to hear.

Right now, Faber is warning investors that both stocks and the U.S. dollar are overvalued. With Donald Trump in the Oval Office, investors need to adjust their portfolios and go long on gold shares, silver shares, platinum shares, physical gold, physical silver, and physical platinum. (Source: “Marc Faber: Good Times Ahead for Precious Metals,” Fox Business, January 17, 2017.)

2017 Will Be a Year of Disappointment

Faber does not believe that President Trump will make America great again. Not for lack of trying, though. Faber believes that Trump’s policies will benefit the U.S. economy but won’t be enough to save the stock market in the long run.

Instead, he believes that 2017 will be a year of disappointment for U.S. investors. Dr. Doom does not necessarily believe there will be a near-term sell-off in stocks, but he does maintain that, in light of low-quality economic growth, a number of important catalysts could send gold precious metal prices soaring.

U.S. Stocks Overvalued

First, every major valuation ratio says U.S. stocks are seriously overvalued. According to the cyclically adjusted price-to-earnings (CAPE) ratio, the S&P 500 is overvalued by 82%. The ratio is currently at 29.05; the long-term average is 16. That means, for every $1.00 in earnings, an investor is willing to pay $29.05. It has only been higher for longer twice: in 1929 and 1999. (Source: “Online Data Robert Shiller,” Yale University, last accessed February 17, 2017.)

In October 1929, before Black Tuesday, the ratio was at 30. In 1999, it was at 45. Before Black Monday in 1987, it was 17.68. (Source: Ibid.)

The Warren Buffett indicator (market cap to GDP ratio) is considered to be one of the best measures of stock market valuations. A reading of 100% suggests that U.S. stocks are fairly valued. The higher the ratio is over 100%, the more overvalued stocks are.

The market cap to GDP ratio is currently at 129.8%. The Warren Buffett indicator has only been higher once since 1950. In 1999, it was at 153.6%. It was only at 108% before the stock market plunged in 2008. It was at 129.7 in late 2015.

The Wilshire 5000 to GDP ratio is the largest index by market cap in the world, and is comprised of all stocks actively traded in the United States. The ratio has never been higher. It is at an all-time high of around 140.5. (Source: “Wilshire 5000 Total Market Full Cap Index/Gross Domestic Product,” Federal Reserve Bank of St. Louis, last accessed February 14, 2017.)

U.S. Dollar Overvalued

Yes, the U.S. dollar is strong, but it might be too strong. Over the course of the last year, the U.S. dollar, on a global trade-weighted basis, is up by 20% to 25%. In the weeks following Trump’s election win, the Greenback experienced one of its strongest gains. Since its 2011 lows, the U.S. dollar is up more than 40% against a basket of peers. This has made the U.S. dollar one of the most overvalued currencies in the world.

Why is the dollar so strong? Investors are increasingly optimistic that Trump’s economic policies will strengthen the U.S. economy and be good for corporate profits. Trump’s proposed corporate tax holiday is also bullish for the U.S. dollar.

At the same time, central banks from around the world (Japan and the European Union) continue to favor quantitative easing (QE), which devalues their own currencies relative to the Greenback.

On one hand, a strong U.S. dollar makes imports cheaper, which is less of a strain on American consumers. On the other hand, it makes exports more expensive, which is bad for U.S. companies that rely heavily on exports. S&P 500 companies generate roughly half of their revenue from overseas.

Even Trump has weighed in on the dollar, saying that a strong dollar is bad for the U.S. economy. Trump observed that the strong dollar was “killing us” and that U.S. companies cannot compete with Chinese companies because the dollar is too strong. (Source: “TRUMP: The strong dollar is ‘killing us’,” Business Insider, January 17, 2017.)

Investor Optimism Too High

Investors’ optimism is in overdrive, as is investor complacency. The CBOE Volatility Index (VIX), better known as the “fear index,” is at its lowest levels since 2008. Meanwhile, according to a survey by Bank of America Merrill Lynch, investor optimism is at its highest levels since 2011. Over the next 12 months, almost a quarter (23%) of investors expect an outright boom. The number of those forecasting negligible growth tumbled by more than half to 43%. (Source: “Investors’ Economic Optimism Surges to Level Not Seen Since 2011,” Bloomberg, February 14, 2017.)

Again, investors are optimistic that the U.S. and global economies will take off under Trump’s proposed tax cuts, regulation cuts, and increased fiscal spending.

This isn’t a one-off; according to the National Federation of Independent Businesses’ monthly survey, small business optimism is surging. January saw the highest level of optimism in 13 years.

Keep in mind, U.S. stocks might be at record levels and investors are euphoric, but the U.S. economy is not as strong as the indices suggest. U.S. gross domestic product (GDP) advanced just 1.6% in 2016, which is the lowest reading since 2011. In 2015, U.S. GDP was 2.6%.

Contrarian Way to Play the Trump Presidency

As investors begin to see the significant risks with the dollar, stock market, and U.S. economy, Faber believes that money will begin to flow into precious metals over the next three to six months.

Interest rates are so low that investors cannot make money in bonds as a result. Stocks continue to be one of the only places for investors to make money. Despite nosebleed valuations, investors will send stocks climbing to a “higher diving board.” This means stocks will have further to fall when markets start to correct. (Source: “Trump will soon be begging the Fed for QE4: Marc Faber,” CNBC, January 11, 2017.)

Enter silver, gold, and platinum. Precious metals like gold and silver are considered to be a safe haven in times of economic and political uncertainty. Investors are happy to send stocks to record levels, but that euphoria will only last for so long.

In 2017, Faber expects the U.S economy to stall and deficits to rise. This will force Trump to go “begging the Fed to launch QE4.” This will cause the over-inflated dollar to weaken, stocks to tumble, and “precious metals to go ballistic.”

So, what is the Marc Faber prediction for gold and silver? When it comes to U.S. equities, the only space that Faber likes right now is gold, silver, and platinum stocks. While gold prices are up almost eight percent since the beginning of 2017, they are still down three percent since the U.S. election. Silver prices are up more than 13% in 2017, but are also down around three percent since the election.

Faber believes that physical gold and silver—as well as gold, silver, and platinum stocks—are attractive at these relatively lower levels.

What could investors looking to invest in physical gold, silver, and platinum or in silver, gold, and platinum mining stocks do in 2017? Faber advises his clients to invest 25% of their portfolios in bullion, especially in light of the significant risks facing investors today.(Source: “Marc Faber: Gold Should Comprise 25 Percent of Your Investment Portfolio,” Newsmax, July 26, 2016.)

Investing in gold is protection from the dangerous combination of government debt and quantitative easing by central banks trying to fight off a global recession with a near-zero interest rates.

When it comes to investing in silver, investing in gold, and investing in platinum, Faber likes physical gold, silver, and platinum, as well as precious metal mining shares. He also has an investing horizon similar to Warren Buffett’s: forever. Faber never sells his gold, and buys more every month.


- Source, Lombardi Letter