Faber: I should thank Mr Ben Bernanke

I own equities, and I should thank Mr. Bernanke. The Fed has been flooding the system with money. The problem is the money doesn't flow into the system evenly. It doesn't increase economic activity and asset prices in concert. Instead, it creates dangerous excesses in countries and asset classes. Money-printing fueled the colossal stock-market bubble of 1999-2000, when the Nasdaq more than doubled, becoming disconnected from economic reality. It fueled the housing bubble, which burst in 2008, and the commodities bubble. Now money is flowing into the high-end asset market—things like stocks, bonds, art, wine, jewelry, and luxury real estate. The art-auction houses are seeing record sales.

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Dr Marc Faber likes Vietnamese shares, emerging markets

Marc Faber is thinking about buying Vietnamese shares and also at some point Chinese shares. The good companies in China are also expensive, they are not cheap. 

Dr Faber also talks about his recommendation last November. I said "buy Japanese shares". Since then Japan is up more than seventy percent. He adds "I want to buy more Japan on a setback."

Marc Faber Update: I would take the short side if necessary

There are still stocks that show strength that could continue to appreciate. That momentum could bring a new high possibly around 1700. I wouldn't bet on it. If someone put a gun on my head and said you have to be long or short, I would take the short side.

Investors should learn to be patient

I always tell people if you want to be a successful investor you also have to have some patience and you can’t measure your performance according to an index. 

If a year ago I told you ‘look you should buy some Japanese shares’, then for nine months you would have complained and said ‘look I bought ­Japanese shares and they never move, and all the other markets are moving up’.

Marc Faber cautious on Australia

Dr Marc Faber of the Gloom Boom and Doom report is said to be moderately positive about Australia for years thanks to the resources boom but is now concerned of a huge credit bubble on the household level. These debts will be a burden for years to come.

Once you are so heavily indebted, then obviously your consumption will grow at a slower pace.


Source: http://DrMarcFaber.blogspot.com

Marc Faber comments on Asset market breaking bad

Asset markets are in the sky and the economy of the ordinary people is in the dumps, where their real incomes adjusted for inflation are going down and asset markets are going up.

Something will break very bad.

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Canada has also higher levels of household debts than in US

Canada has also higher levels of household debts than in US. With the higher leverage in Australia and Canada, I think I’d be very careful about any lending institution [in Canada]

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Gloom Boom Doom report - May 2013

First, I am discussing capital flows and the general belief among some economists that trade and current account deficits do not matter because the money flows back in the form of investments in equities, bonds, real estate, direct investments, and corporate takeovers.

According to Barron’s Big Money Survey, “74% of large portfolio managers are bullish about stocks, which is the Highest Level Ever.” Time to be a contrarian?

I am reluctantly maintaining an approximately 25% weighting in equities (mostly in Asia and in Europe) and I have not yet shorted any stocks because I have learnt that a bubble can get bigger still and exceed my expectations - before it implodes violently.

I want to make clear that I own equities not because of the belief that they are inexpensive and that they will move up substantially but because I do not trust the banking system and, therefore, I do not wish to be overexposed to bank deposits.

Finally, has gold completed its correction and are we entering another major advance as the gold bugs tell us, or are we at the beginning of a major gold bear market as the bears want us to believe?

being in cash and government bonds is not a protection

The central banks around the world gone the path of money printing and once you choose that path you’re in it, and you have to print more money.

If you start to print, it has the biggest impact. Then you print more - it has a lesser impact unless you increase the rate of money printing very significantly. And, the third money printing has even less impact. And the problem is like the Fed: they printed money because they wanted to lift the housing market, but the housing market is the only asset that didn’t go up substantially.

In general, I think that the purchasing power of money has diminished very significantly over the last ten, twenty, thirty years, and will continue to do so. So by being in cash and government bonds is not a protection against this depreciation in the value of money."

Asia looks like a good bet

 I’ve recently been on to Vietnam, Cambodia, Laos, of course Thailand, because I have a house there, and Myanmar. that whole region is known as Southeast Asia, and I think that region of 250 million people will continue to grow regardless because you have a relatively high GDP per capita in Thailand, maybe 3,000 or 4,000 US Dollars, and the surrounding countries GDP per capita less than $1,000. And these countries are opening up now, and I think with the trade links and transportation links that are being expanded regardless of what happens in the world, can grow. Provided there is geopolitical stability in Asia which is a big question mark.