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Wednesday, January 30, 2013

Marc Faber: Enjoy while your Stocks rise

The euphoria of investors pushing prices up, but soon the mood may change. This analyst Marc Faber warns in an interview with CNBC. He said the rally that lifted the broader index S & P 500 to its highest level since 2007, lost power and may soon be over. "The market is very svrahizkupen. However it is possible to follow only a mild correction in February, after which the growth to continue, "said Faber. His opinion is that this year we can see a movement similar to the movement in 1987. Then from January to August market jumped 41 percent, but in October and November, losing 40 percent. This shows that we will probably have high volatility during the year, says Faber. Generally known for his gloomy predictions Faber rarely speak positively about the market. The specialist said that currently exempts from its long positions. "In this situation sell. Restrict positions because euphoria gaining strength, "he explains. "Corporate profits are likely to disappoint this year. Incidentally, there may be geopolitical problems, "said Faber, adding that recently returned from a trip to the Middle East, which is the" melting pot. " Faber continues to hold a large percentage of its portfolio in shares of gold mining companies. "Buy gold because afraid of a systemic crisis, there will be wars and so on," he said, adding that he is optimistic for markets like Russia, Vietnam and China.

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

Marc Faber Video

Marc Faber is a great contrarian investor and publisher of the Gloom Boom & Doom Report. He is well known for his accurace predictions of stock market crashes and other correct calls on different investment assets.

"Regardless of what the markets do near-term, a correction is overdue," Marc Faber tells Bloomberg TV's Betty Liu. From discussing Europe's 'apparent' stabilization - "anything can go up when you print money"; to US equity exuberance - "a correction is overdue and February is a seasonally weak month"; Faber sees no change from Geithner's handover to Lew as he opines: "The only thing I know is one day the markets will punish the interventionists, the Keynesians and the monetary policy that the Federal Reserve and ECB has enforced because the markets will be more powerful one day. How will this look like? Will the bond market collapse or equity markets become a bubble, which would be embarrassing for the Fed's sake if the U.S. market became a gigantic bubble and at the same time the economy does not recover."Faber: on whether he agrees with George Soros that Europe has been stabilized: "It has been stabilized for now, but the big question as he said is the imbalances have not been solved and these could come back and harm the markets and the euro at some point in the future. In terms of stock markets, I have advocated one year ago between April and June of last year to buy European stocks in Portugal, Spain, Italy, Greece and France because they were extremely depressed. Since then, the markets have rallied very sharply. Greece is up from the lows by 100%. That tells you anything can go up when you print money." On whether he's getting out of European markets: "Not really because we made the secular low roughly one year ago, but I have argued that it is the time right now to reduce equity positions. I think the markets are at the difficult juncture between overbought and a euphoric state. I am not ruling out that they could go up somewhat more like in 1987, going up 40% between January and August, but we also fell 40% in two months' time. So the gains were wiped out quickly. In March of 2009 we are close to 1500. We had already a huge bull market, and a lot of the good news has been discounted already." On whether there will be a correction on the S&P: "I think regardless of what the markets do, near-term, a correction is overdue and usually February is a seasonally weak month…It will be interesting to see how the correction unfolds." On why he's not going big on any short in the market: "The problem with shorting the markets nowadays is that you have this huge intervention by governments. Look at bonds of Italy Portugal and Spain--they rallied last year, there was a huge profit opportunity, and I admit that I missed it, but the profit opportunity came about as a result of government intervention. I feel the markets are -- some people say it is intervention. I can call it manipulation. If manipulation continues, you do not know how far they will go. The only thing I know is one day the markets will punish the interventionists, the Keynesians and the monetary that the Federal Reserve and ECB has enforced because the markets will be more powerful one day. How will this look like? Will the bond market collapse or equity markets become a bubble, which would be embarrassing for the Fed's sake if the U.S. market became a gigantic bubble and at the same time the economy does not recover." On Tim Geithner's legacy and whether anything will change under Jack Lew: "I doubt there will be much change. To be fair to Mr. Geithner, he inherited a colossal mess. he is involved in politics and he has to listen to what the politicians want to do. He did an ok job. Where it is not ok is that basically nobody that has committed financial fraud or contributed to the fraud was prosecuted." Source: Zerohedge
Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.
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