Marc Faber likes cash because it will give you power to buy cheaper assets when the time comes. The publisher of the “Gloom, Doom and Boom” report, shared his market views at the CFA Analyst Seminar in Chicago.
- Positioning portfolios for slower growth in a deflationary environment (Likes cash)
- Identifying sources of rising risks
- Finding alternative strategies for global investors: Emerging markets, gold, commodities, stocks, bonds, and more
As Marc shared during last year’s seminar, all asset markets are overvalued, with only a few exceptions. “Different asset classes will be touched at different times,” Marc shared, and investors need a lot of cash on had when the time is right and opportunities appear.
As reported by PIOnline: Falling interest rates driven by central bank intervention have not improved economic conditions, he said. Instead, median household income in the U.S. has fallen, income inequality has exploded and the working and middle classes are struggling in terms of real wages, he added.
Low rates have benefited earnings as U.S. corporations have been able to refinance at historically low levels. And the U.S. market advance, which has been driven largely by stock buybacks, has made U.S. equities expensive, he said.
In terms of investment ideas, he thinks real estate and emerging markets equities will outperform U.S. equities over the next five to 10 years. And in particular, he said Indochina — including Vietnam, Cambodia, Thailand and Laos — is the most promising region for investment over the next 30 years.
“In the absence of war, the area will be very attractive,” he noted.
Mr. Faber said he thinks the lifting of the Iranian embargo will strengthen the Iraqi Shiite population in the southern region of the country near the oil fields. He said while Iran has a stock market, it is not easy to access and suggested the more-accessible Iraqi stock market will serve well as a proxy for the lifting of the sanctions.
Bonds, he said, are the most-hated asset class now. But he would rather own U.S. Treasuries that currently have higher yields than some European sovereign debt. U.S. Treasuries will serve as a portfolio diversifier should the global economy enter a recession and equity values fall, he said.
And of course, given his bearish stance, Mr. Faber recommended holding gold in a portfolio — his recommended allocation is 25%.
“Gold is insurance if the banking system fails,” he said. “As an investor I’d like to own something outside the banking system, and that includes real estate, art and gold.”
Macro & Stock Views
- Short the Australian Dollar on Rebounds
- Hold Diversified Portfolio
- Bullish Chinese Stocks
- Emergings Markets are Better Value Than Developed
- Higher Volaility
as of January 2015
Marc Faber: Do not Buy China , Buy Vietnam and Macau Instead
The famous investor Marc Faber who is a contrarian in nature says that he wouldn’t touch Chinese stocks even after their precipitous decline, instead pushing the investment case for Vietnam equities, Hong Kong-listed Macau gaming stocks and gold mining shares. “I am a buyer when markets are undervalued and attractive and then I get out relatively early. So we were buyers a year ago in June/July of 2014,” Faber, the author of the “Gloom, Boom and Doom Report”, said, referring to Chinese equities. “Now, I don’t think that Chinese stocks are attractive and I would just stand aside.”
US Equities Trap
The famous investor Marc Faber who is a contrarian in nature believes that US equities are not a buy and said that the US economy will slowdown and could enter a recession in half an year. Equities could start correction by the end of 2015.
During the interview for CNBC Trading Nation, Marc Faber shared: “We could very well be in a recession in the US within 6 months.” He also believes a huge correction in the US stock market could send stocks down much more than 20%.
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