Marc Faber’s 20% Correction that Never Came

Marc Faber, is famously called Dr. Doom due to his never ending prophecies that something or the other is going to witness a correction. So, another prophecy by him that the U.S. Stock markets will collapse by 20% was nothing new when he said it on CNBC, exactly a year ago. The interesting observation though that one makes when rewinding to the views that he held then, is the logic. Mr. Faber is not someone who plainly utters verbiage when asked about the reasoning behind his predictions, he offers a logical explanation behind them. The problem is that even though his reasoning can be deemed right at times, the outcomes mostly don’t match up to it.

Stock Trading Insider NYSE Market

“I argued, since last October that we would either have a 20% correction or we could be in a situation like 87, when the market rallied very strongly into August 25th and then fell by 40%. Though, I think that some of the tailwinds we have namely massive monetization and falling interest rates are no longer in place. We still have massive monetization, but it seems to me that the Fed has lost control of the bond market and this is very important,” Faber  said.

Faber justified his views of the market last year being similar to how they were in 1987, by saying that in 1987 the market saw an impressive rally while the earnings didn’t increase significantly, and the same was happening in 2013. He also included that in 1987 when the U.S. markets were hitting new highs, a host of companies were below their 52-week highs and similar to that, just two days before his views were aired, 117 companies in the S&P 500 were touching new 52-week low while S&P 500 was making new highs.

“I think, the only way this market can go up is that if the 10 or 15 stocks that are very strong, continue to drive the market higher, with the majority of stocks that have actually peaked out when the market reached on May 22nd, 1687, we are not far above the May 22nd high. So, the majority of stocks is actually lower than it was two, three months ago,” Faber  added.

Disclosure: None

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!