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Friday, August 1, 2014

Marc Faber, Sticks to Stock Swoon Call

They call him Dr. Doom, and he likes that label just fine. It also fits with the renowned Swiss investor’s unwavering belief that U.S. stock markets are headed for a 30% decline sooner or later.

Marc Faber, the editor and publisher of the “The Gloom, Boom & Doom Report”, is among a handful of doomsters who have been predicting a correction for stock markets. And with the S&P 500 index SPX +1.02% up more than 6% this year, grinding its way through year five of a bull market, those calls are hardly being ignored.

Faber’s call is among the most dramatic and he tends makes the headlines when he opens his mouth. He has been expecting a big pullback since 2012 and recently predicted to CNBC a rout like 1987, when the Dow industrials dropped 22.6% in a single day. Not everyone agrees with him, of course. Jim Paulson, chief investment strategist at Wells Capital Management, last week predicted a pullback for this year, but also a multiyear run for this bull market. Goldman Sachs raised its S&P target to 2,050 from 1,900 on Monday.

Among the stocks that Faber does find attractive are commodity-related issues. In his July newsletter he highlighted gold and silver-mining shares as among the very few sectors that are “extremely depressed and offer an opportunity for potentially very high capital gains.” Oil stocks got a nod on the view the Fed and other central banks will speed up money printing if the economy or markets begin to weaken, also good for gold.

Separately, Faber said momentum stocks like Twitter Inc. TWTR +0.47% and Veeva Systems Inc. VEEV -0.10% are back to being potentially good short calls, as was his stance earlier this year.

 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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