Marc Faber Blog

Thursday, July 24, 2014

No one is thinking clearly when everyone is thinking the same

Everyone thinks alike in the sense they say central banks will continue to print money and as a result asset prices will go up. When everyone thinks alike, no one is thinking clearly. 

We have seen cases where interest rates remain low or went down and markets still fell, like in Japan or the U.S. after March 2000. In 2001, they slashed the fed funds rate from 6.5% to 1%, yet the Nasdaq COMP +0.48%  still fell, the housing market still fell...the fact that you have low interest rates doesn't mean low asset prices cannot go down. 

Wednesday, July 23, 2014

Social Media stocks dont appear attractive to Faber

Well, globally we have essentially euphoria in anything that is related to social media and the Internet. I am personally not so interested to invest in sectors that are popular and that sell at relatively high valuations.

Monday, July 21, 2014

Stock market is wrong because the global economy is weakening

When I travel and look around economies, I don’t see the global economy strengthening, I see it weakening. 

We are now in the fifth year of an economic recovery which began in June 2009 in the U.S. and we’re more than in the fifth year of a bull market that began on March 6, 2009. 

This is a very mature economic recovery. It would seem to me that the monetary policies that central banks pursue are negative for economic growth, but they are positive for asset price increases. As a result of asset price increases, lots of goods have become unaffordable for the typical household. 

Thursday, July 17, 2014

30 percent correction is a possibility

I have been expecting a correction that hasn’t happened, but it has happened in individual stocks, and it has happened in emerging economies. A 30% [correction] would not surprise me, but the financial media doesn't believe it can happen. When the S&P was at 666 on March 6, 2009, they didn't believe the S&P would go to 2,000 either.

The market is very overbought. The rise this year has been accompanied by fewer and fewer stocks making new highs. GE , GM, IBM , Wal-Mart are no longer participating in the advance.