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

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

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!