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