"In 1987 we had a significant increase in stock prices. Profits, however, did not grow at a stable rate. Markets were overvalued. There was a sharp decline, and on August 25 was the last day on which a large number of shares registered 52-week low. In other words, the number of shares that rose, curled up and saw a number of disruptions to trade with different shares, "said in an interview with CNBC Marc Faber
October 1987 was a period that investors can not so easily forget. YTD broader index S & P 500 added 20% to its value. Faber comparison with 1987, when the market grew by 30% at the same time of year.
On October 19, 1987, the day known as "Black Monday", S & P 500 index dropped sharply by 20%. This event remains forever in the history of Wall Street as the biggest loss suffered in exchange for one day. It was the end of five years-long period of appreciation of the shares.
Faber notes that in just two days this week, when the S & P 500 hit historic high of 1,709 points, there were 170 issues, which were trading at 52-week lows. This means that only a few companies moving market.
Back in February, and then a few more times, Marc Faber make such negative predictions, but none of them came true. Analysts wonder how much longer he will play the role of the false shepherd before something actually happen?
Analyst at Schaeffer's Investment Research Ryan Detrick did make quite a different conclusion. According to him, just as in 1987, and now the index Dow Jones Industrial Average has almost doubled. Today, however, market participants behave differently compared to the year in question.
Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.