Stocks measured by prize earning ratios and considering that probably the economy will be weakening and that corporate profit may disappoint may not be quite as cheap as all the strategists claim

Marc Faber : well basically we have a lot of volatility as you know the last 12 months the S&P rose from 1010 on July 1st of 2010 to the peak of May 2nd of this year 1370 and then we dropped four days ago to 1101 and now we are at 1178 so we have a lot of volatility as in the market may rebound somewhat more because we are very oversold and some technical indicators have turned positive including also insider buying , but in general I think it will be extremely difficult for stocks to make a new high and after this rebound I think we'll drift lower it is not to say that we will collapse because if the S&P dropped to around a thousand or so the FED will certainly pump again money into the system the concept of valuation is very difficult to make when you have zero interest rates , I can make a case that actually the price of Gold is still undervalued compared to say to mi 1990s when it was traded at 400 dollars , so it is very difficult to say what is valued in this environment is a Picasso a good value or is it over valued ? I don't know but stocks measured by prize earning ratios and considering that probably the economy will be weakening and that corporate profit may disappoint may not be quite as cheap as all the strategists claim I believe all the central banks in the whole world will print money and that eventually we will have symptoms of inflation they may not necessarily all be consumer based prices they can be manifesting themselves with insurance premiums going up with transportation going up energy price going up food prices going up educational costs going up these are inflation measures also and the weakening of the US Dollar that happened , now near term the US Dollar can rebound somewhat , possible but in the long run it is simply a doomed currency that's where the doom comes in  - in Fox Business News



Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

I would rather buy equities today

Marc Faber : If you think it through US debt downgrade should actually lead to weaker US Bond prices , yet yesterday and to day in Asia stocks are selling off and US government bonds rallied , but I always said , if you print money you are a serial bubble printer a bubble maker , you create one bubble after the other in different asset classes , and I think today to buy a thirty year US government bond is at a yield of 3.65 percent and a ten years bond at a yield of 2.31 percent , I would rather buy equities today but I think after a rebound we are going to go lower because the momentum is now very strong on the downside and I believe there is a loss of confidence in paper money and money is moving out of paper into Gold - in CNBC TV-18 



Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Zero interest rates is the problem

Marc Faber : The problem with the Federal Reserve policy of essentially zero interest rates is that they are essentially throwing money at the system, but they don’t control where the money will flow to. It can flow at some point into commodity-related stocks. It can flow into gold, oil, treasuries, but it doesn’t flow evenly into these assets. In my opinion, the Treasury, the long-dated Treasuries are essentially the short of the century thing here. - in Bloomberg 



 
Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.