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Faber’s Outlook On The Market

Marc Faber, the famous Investor and the writer of “The Gloom Boom & Doom Report”, shared his outlook for equities and his investment strategy on Bloomberg.

“It’s actually quite gloomy but if you’re very gloomy what do you invest in: Treasuries, Italian bonds or commodities or equities?  I happen to think U.S. equities are not terribly expensive, so relatively speaking to other assets, they may for a while actually do quite well.” Faber said, “but if there is some good news coming out of Europe, and good news would simply mean postponing the problems for another few years with some kind of money printing operation, either by that ECB or IMF or EFSF, that lift stock prices higher.”

Jim Chanos on china map

Faber believes it’s hard and may take some time for the ECB to find a better solution. He disagree with money printing, which may postpone problems that people have seen in the U.S. Faber said that the euro will survive, either as a currency aside from local currency, or without the weaker countries. However, since euro and dollar are long-term undesirable, Faber will prefer to hold gold.

Faber also explained his opinion in China: “When you have an economy like China that becomes so big so quickly, you can have a more meaningful setback. If the U.S. economy grows at 3% or contracts that 3%, it has no impact on the price of copper to speak of.” But Faber is now very keen on China because he believe the Chinese government cannot slash interest-rates again and reduce reserve requirements forever. (Source: Bloomberg)