In a free market economy, you will
always have price fluctuation. The Federal Reserve today, artificially
manipulates asset prices up. It’s a huge mistake, but that is what they
do. To answer your question specifically, we had a bear market that
ended March 6th, 2009 (S&P at 666). We are at 1800 now, almost three
times higher. Over the last 2 years, most equity markets around the
world, most markets have been down (they are not following to the
upside), but in the US an increasing number of shares are breaking down,
we have had very heavy insider selling recently, high valuations and
extremely high corporate profits from historical standards. My view is
that in a month time, the bull market will be 5 years old. That’s the
second longest bull market in the last 100 years. I would not buy
shares. Can the market go up another 20%? It’s like the Nasdaq in late
1999, where the Nasdaq went up another 30% between January and March.
People were crying afterwards with their losses.
So markets go up
and down. I think that the upside potential now is very limited and
there is considerable downside risk, probably much more downside risk
than most investors consider.
Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.
