Sunday, July 29, 2012

Faber breaks habit of a lifetime and loads up on European equity -

Marc Faber has made his first foray into beaten-up Portuguese, Greek, Spanish, French and Italian equity markets, the publisher of ‘The Gloom, Boom & Doom’ report told Citywire Global exclusively on Monday.

Having liquidated a large portion of investment in Asian equities in the last few weeks, Faber has put the cash to work in Europe, while still holding 30% cash which he will allocate only when markets fall further, he said.

'For the first time in my life, I have been buying European stocks because I can see the markets of Portugal, Spain, Italy, Greece and France near the March 6th 2009 lows,’ Faber said speaking from his home in Thailand.

‘These markets, compared to the rest of the world are very cheap and some stocks are perfectly fine companies but because these markets were very weak and because there is a threat of a euro break-up, everything has come down to very low valuations.’

Faber said he would currently still rather hold European stocks than US stocks – despite a possibility that the latter will see a rise in the S&P index to highs as seen in April this year.

‘I think that it’s possible that the US stocks may rally as the whole world thinks that the US has natural gas and there is a re-industrialisation in America. But, if I look at all the options I now have, I can see that European stocks are now terribly depressed.’

‘I still keep a lot of cash because if the markets drop another 30% - which I hope they will do – I will then invest in equities.’

In a video interview with Citywire in February this year, Faber said he held 25% in real estate, 25% in (mostly Asian) equities, 25% in corporate bonds and 25% in physical gold.

Speaking today, Faber said he bought telecomms and utilities companies in Europe’s peripheral economies in the last four weeks having reduced his Asian equity exposure. He said he still recommends investors to invest in gold and real estate and holds no bank exposure. 

‘It may be a mistake, but I don’t think it is time to invest in banks because they still need a lot of capital and they will have to increase the equity capital. But maybe they will have a rebound – who knows – it’s possible. I just don’t see enough transparency (to invest)’.

In his portfolio, besides a 30% holding in cash, Faber holds a large proportion in high yield bonds made up of mostly Asian, Russian and European names such as Gazprom and ICICI bank.

‘Most of my bonds are what rating agencies would consider low quality. I don’t consider them as lower quality because they are corporate bonds and I think that a lot of corporations will rather survive than the governments.’

An edited transcript of the interview with Marc Faber including a discussion of the slowdown of the Chinese economy and its effects on commodity markets as well as Faber's outlook on the US economy will be published exclusively here tomorrow.

View the original article here

Monday, July 16, 2012

Beware China but not Commodities: Faber -

According to Marc Faber there are still opportunities for investment in commodities despite recent volatility, following diminishing demand from China, the world’s biggest consumer of commodities like copper and zinc. “The markets are very volatile and it takes a lot of courage to be short,” Faber said.

“I don't want to be short [on] copper because copper can, like other markets, be manipulated because there are not that many players in the copper market, and so we could see a rally in copper prices, we could see a rally in gold prices and so forth and so on.”

Oil, copper and gold rallied on Friday following China’s second-quarter GDP data, which met forecasts of 7.6 percent and on investor hopes that the Chinese government would continue to cut the benchmark interest to stimulate the economy.  This was the first time China’s GDP growth has dipped below 8 percent since 2009. However, Faber and other investors are pessimistic about the wider impact of China’s slowing growth, saying that he believed the Chinese economy was “rather weak” and that Chinese officials had mis-represented the country’s growth figures.

“I think…investors must realize that the impact of a slowdown in the Chinese economy, which in my view is much larger than what the government has been reporting, the government says GDP has been growing at 7.8%”, he said. “In my view, it's much lower.”

Tuesday, July 10, 2012

KWN 'Deep Throat' Catches Gold Cartel In Act Again; Marc Faber Changes ... - ETF Daily News

Dominique de Kevelioc de Bailleul: After months of suggesting that the gold price could move down to the $1,200 level, editor of the Gloom Boom Doom Report, Marc Faber, now believes the gold market has reach the bottom range of its cycle lows.

“I’m not sure that Gold will not make a new high this year, but I think we’ve bottomed out and some gold mining shares have become very very inexpensive compared to the reserves they have,” Faber told Bloomberg Television this week.  “And I think that in the current environment where it is clear that the worse the economy becomes the more the money printers will be at work, that to own a currency whose supply can not be increased at the will of some clowns that occupy the central banks is a desirable investment,” he added.
"Nationalism will emerge. Healthier countries will not see fit to spend their hard earned money to bail out their less responsible neighbors."

In a Jan. 17 interview with Fox Business, Faber was unconvinced the rebound from the steep correction of 20.7 percent to $1,523.90 on Dec. 29 was over. According to him, the spectacular and seasonally unusual summer rally of 2011, which took gold to $1,923.70 on Sept. 6, up 32.4% from the low of $1,452.60 set on May 5 (a 132 percent compounded annual rate), hadn’t flushed out all of the remaining weak hands.

“Well, I like it [gold], yes, but I think the correction is not over yet,” he said.  “I think, we had a big correction from the peak September 6 when gold hit $1,921.  We went down to around $1,522 at the end of December.  Now we’ve rebounded above $1,600.  I think we can have another leg down.”

In the months of April and May, Faber held firm about his fear of another leg down for gold, suggesting that, to be safe, investors should dollar-cost average into building a gold position for the next leg up in the ongoing bull market in precious metals.

Adding trepidation and skepticism to the gold market’s potential for cracking JP Morgan’s widely-publicized target of $2,500 for gold by the close of 2011, currency trading legend John Taylor of FX Concepts told Bloomberg as early as late spring of 2011 that he, too, like Faber, was looking for gold to drop further, giving a low as $1,000 target price for the metal, as a massive run out of gold to shore-up tier one assets would likely result from a collapse of the euro (another prediction) by late spring.  His outside target for the catastrophe in the eurozone was the close of May 2012.

As central banks of the West and some large hedge funds liquidated gold for reasons of liquidity throughout the first half of 2012, the Chinese (and other nations of the East), meanwhile, were buyers at the $1,600 level and at intervals of $10 lower in a reverse pyramid buying scheme, according to King World News anonymous source of London.

“They [Eastern countries] are averaging in at the fixes, as well as during the declines,” Anonymous told KWN on Apr. 5.  “On top of that, there are bids for hundreds of tons of physical gold starting at the $1,610 level and below.”

Immediately following the interview with Anonymous, King World New’s website underwent an unrelenting ‘denial of service’ attack by unknown computer operatives.  Though an earlier incident involving an attack on KWN’s servers following another Anonymous interview could not be traced, speculation was rife that JP Morgan (or someone affiliated with the gold cartel’s kingpin) was responsible for the mischief, as well as recollections of Andrew Maguire’s near-fatal attack by a maniacal automobile driver immediately following Maguire’s visit to the CFTC were aired and written.

And in breaking news on Friday, KWN released another interview by Anonymous, who issued an account of the most recent attack on the gold market by the JP Morgan-led cartel.  This time, the attack took place one hour prior to Fed Chairman Ben Bernanke’s testimony to Congress earlier in the week.  The attack was viscous, monstrous and blatantly obvious, according to him (her).

“What happened yesterday in the gold market was very interesting,” Anonymous told KWN’s Eric King. “One full hour before Bernanke’s testimony, the bullion banks started selling.  Over the next 4 hours, the bullion banks sold the equivalent of 515 metric tons of paper gold.  This was in just 4 hours, and again, the selling started one hour before Bernanke’s testimony.”

Anonymous goes on to say that “Eastern buyers” were waiting with open arms once again to lock in more physical deliveries at lower prices orchestrated by the cartel.

Anonymous added, “The selling went on for another 3 hours after the Fed Chairman began to speak, and as I said, over 515 metric tons of paper gold was sold.  During this entire takedown, there was zero physical gold available for sale in the market. However, this action did create tremendous supply for the Eastern buyers to lock in the spot price of gold.”

Full account of the incident from KWN here.

The attack appeared coordinated and by the usual suspects, according to Anonymous.  That large client, referred to by JP Morgan’s gold market specialist Blythe Masters in a CNBC interview of Apr. 5, most likely is the Fed (or another agent), itself, according to many analysts close to the ongoing story.

“A large wave of selling entered the paper gold market and traders saw the price of gold drop $40 in a matter of minutes,” Anonymous added.  “So the action was orchestrated by the Fed, and Fed-speak was used to assist in the takedown.

“The real question here is, how could an entity begin selling such a massive amount of paper gold when there hadn’t been any news (starting to sell before Bernanke’s testimony)?”

Onlookers to the KWN/Anonymous/JP Morgan saga await the next cyber attack upon KWN’s servers.

Related: SPDR Gold Trust (NYSEARCA:GLD), iShares Silver Trust (NYSEARCA:SLV), ProShares Ultra Silver (NYSEARCA:AGQ), Market Vectors Gold Miners ETF (NYSEARCA:GDX).

View the original article here

Monday, July 9, 2012

Global markets to plunge further in 12 months -

Global market sentiment improved following the deal aimed at easing concerns over the eurozone's debt and banking problems. Given that world markets are in oversold territory, Marc Faber, Editor & Publisher, The Gloom, Boom & Doom Report, Marc Faber Limited is of the view that equities may rally for some time more, however, the global picture has still not changed drastically.

“Don’t forget July is a month of seasonal strength and that we are coming into the election, there maybe some more money printing and fiddling with statistic sense of ours. So the market may actually rally a bit more. But it doesn’t change the global picture, which is essentially for a global economic slowdown, for an increasing number of companies that are reporting disappointing sales for forecast, for earnings.”

In his opinion, “we are still in a high risk environment. Eventually, in the next 12 months, you will be able to buy most markets at a lower level than today.”

Below is an edited transcript of his interview. Watch the accompanying video for more.

Q: What did you read first of the kind of reaction global equities had to the Euro Summit and the notes that came in from there?

A: To start with, I think markets were oversold especially in Europe. When there was moderate good news, there was a lot of European short covering and a lot of stock rebounded by 5-7% in just one day.

Q: Would you say the rally is probably short-lived and saw the best part of it play out by last week itself?

A: This is too early to tell. Basically, we made a low in early June and at 1261 on the S&P and then we rallied and we came down again, but we didn’t test a new low. We may rebounce to around 1400 on the S&P. Don’t forget July is a month of seasonal strength and that we are coming into the election, there maybe some more money printing and fiddling with statistic sense of ours. So the market may actually rally a bit more. But it doesn’t change the global picture, which is essentially for a global economic slowdown, for an increasing number of companies that are reporting disappointing sales for forecast, for earnings.

When there is a minor disappointment that’s what the case on Friday in the case of Nike, the stock then drops very significantly and erases essentially all the gains of the last three or six months. So we are still in a high risk environment. Eventually, I think that in the next 12 months, you will be able to buy most markets at a lower level than today. The only stocks I bought in the last 10 days are from the fresh issues in Portugal, Spain, Italy and France. 

Q: How heartened were you by the comments that were made at the Euro Summit though, either in terms of working towards a banking union, the vague indication of looking at euro bonds as an option, do you think some significant ground has been covered or was it a mission statement that would probably not hold true for very long, at least in terms of solving the euro crisis?

A: I think the details will have to be worked out and that will take a long time. So it’s not a solution that immediately will be applied and successful.

Q: You track the euro-dollar in great detail as well. Would you say things or dynamics have changed for both those currencies and the second half may yield more weakness for the dollar or do you think any strength on the euro is short-lived and should be approached with a shorting stance?

A: In my view, the euro is not a very desirable currency, but the US dollar is not much better. I think if you look at the action of central banks around the world, it is very difficult to find any paper currency with which you can be particularly happy. If the Chinese economy slows down more as I expect it will then you will also have easing in China and capital flight and maybe the Chinese RMB will weaken.

Among the context of who is the least ugly currency I would say probably the US dollar for the time being, but that doesn’t change the fact that the US dollar was overbought recently and sentiment surrounding both European stocks and the euro was extremely negative. So I think a rebound in the euro may continue very well and then will have renewed weakness in my view.

Q: Just to step away from this recent news flow for a second though, it’s been a five year bear trend almost for markets. How would you call the second half of this year? Do you see anything that marks an end for the bear rally or a troughing out of markets or do you think we are in for a longer haul here?

A: We have to be very specific. The total return of equity if you include dividends since 2007 hasn’t been a disaster. It hasn’t been particularly good, but it hasn’t been a disaster and the return from bonds have been very good and for commodities depending which ones you owned was also reasonable. So I think for investors, the situation was not all that bad. But I concede that a lot of people lost a lot of money because they were badly positioned, either overweight, stocks that went down a lot or they were in the case of the US heavily geared into the property market that tumbled and reversed. So I agree that it hasn’t been a particularly happy time for investors.

View the original article here

Prefer Indian companies to US Treasuries from 10 year perspective: Mark Faber - Economic Times

CHANG MAI, THAILAND: Recommending portfolio diversification, investment guru Mark Faber told ET Now that it is the right time to own a mix of equities, cash, gold and real estate. "Asset allocation will need to be rebalanced from time to time," Faber said.

Faber is bullish on gold as an asset class. With gold expected to head lower, he advised to accumulate it. He prefers gold to paper currency. "Central banks around the world will continue to print paper currency which will decrease the currency's purchasing power," he said. ithin real estate, he feels that 'weekend destination properties' will be desirable over the next 10-15 years in India.

Faber is of the opinion that it is difficult to be bullish on the US economy, but given the current scenario, dollar is a relatively safe currency. Faber feels that huge capital gains from asset classes over the coming years are unlikely and that in the next five years capital preservation will be of utmost importance. He even said that globally a period of asset deflation may be witnessed.

Asked about the Asian economies, Faber said that he does not see significant growth in Asia and that is reflected in the equity prices. He expects corporate profits to fall in the coming years.

Faber was extremely bearish on the US Treasuries and government bonds from a 10 year perspective. The notion that US Treasuries are a safe investment is misplaced, Faber opined.

He also said that between Indian equities and US Treasuries, he would prefer to invest in companies in India from a 10 year viewpoint. "Even though the macroeconomic signals are not favourable, Indian companies are better run than their Chinese counterparts," he added.

View the original article here

If I Were Germany, I Would Have Abandoned Eurozone Last Week – Faber - Wall Street Pit

Marc Faber, publisher of the Gloom, Boom and Doom Report, spoke with Bloomberg Television’s Betty Liu this morning and said that, “If I were running Germany, I would have abandoned the eurozone last week.”

Faber went on to say, “In the case of Greece, one should have kicked out Greece three years ago. It would have been much cheaper.”

Excerpts from the interview can be found below, courtesy of Bloomberg Television.

Faber on the eurozone crisis:

“If you put one or 100 sick banks in a union, it does not change the fact that they’re sick. In my view the markets are rallying because they were grossly oversold. When markets are grossly oversold, especially markets of Portugal, Spain, Italy, France, then any news that is not disastrous news propels stocks higher. I think that combined with seasonal strength in July, the rally has carried on somewhat. But it is another cosmetic fix, a quick fix that does not solve the long-term fundamental problem of over investment in the euro zone. And what it does, basically, it forces Germans to continue to finance people in Spain and Portugal and Greece that are living beyond their means.”

“If I were the Germans, if I were running Germany, I would have abandoned the eurozone last week…It is a costly decision, but losses are there and somewhere, somehow, the losses have to be taken. The first loss is the banks. In the case of Greece, one should have kicked out Greece three years ago. It would have been much cheaper.”

On whether he’s picking up European equities:

“Yes. In Portugal, Spain, Italy, and France, the markets are either at the lows of March 2009, or lower. Along with bad companies and the banks, there are also reasonably good companies. Stellar companies, but they have been dragged down. I see value in equities, regardless of whether the eurozone stays or is abandoned.”

“[I’m buying] anything that has a high yield, or what I perceive to have a relatively safe dividend. In other words, I do not expect the dividends to be slashed by 90%…I am not buying banks, but maybe they could rally. I am just not buying them because I think there will be a lot of equity dilution and recapitalization. I’m not that keen on banks.”

On whether he’s going long on the euro:

“No, I’m not going long on the euro because I’ve always maintained a diversified currency portfolio. I have U.S. dollars, euros, Singapore dollars, some Canadian dollars, and even some Australian dollars. And I have a lot of Asian currencies, Malaysia, Thai baht and so forth.”

View the original article here

Sunday, July 8, 2012

MARC FABER: Europe Is Just In An Oversold Bounce, And The EU Summit Won ... - Business Insider

European markets took off after European leaders adopted a host of measures intended to alleviate interbank funding pressures and lower borrowing costs for Italy and Spain at last week's EU summit.

But Marc Faber, publisher of the Gloom, Boom and Doom Report, told Bloomberg TV that markets have been oversold sparking a rally, and that the developments in Europe are nothing more than another 'cosmetic fix':

"If you put one or 100 sick banks in a union, it does not change the fact that they're sick. In my view the markets are rallying because they were grossly oversold. And when markets are grossly oversold, especially markets of Portugal, Spain, Italy, France, then any news that is not disastrous news propels stocks higher.

And so I think that combined with seasonal strength in July, the rally has carried on somewhat. But it is another cosmetic fix, a quick fix that does not solve the long-term fundamental problem of over investment in the euro zone. And what it does, basically, it forces Germans savers to bailout and to  continue to finance people in Spain and Portugal and Greece and so forth that are living beyond their means."

Faber said he is buying European stocks in Portugal, Spain, Italy and France, and is buying "anything that has a high yield, or what I perceive to have a relatively safe dividend. In other words, I do not expect the dividends to be slashed by 90%." Faber is however avoiding the banks.

View the original article here

Monday, July 2, 2012

Motivation Speaker Follows Faber & Bass as Gold Gurus - Resource Investor

Today's AM fix was USD 1,619.00, EUR 1,289.83, and GBP 1,044.65 per ounce. Yesterday’s AM fix was USD 1,612.75, EUR 1,286.19, and GBP 1,034.94 per ounce.

Silver is trading at $28.86/oz., €22.93/oz. and £18.57/oz. Platinum is trading at $1,479.00/oz., palladium at $622.00/oz. and rhodium at $1,225/oz.

Gold climbed $7.20 or 0.45% yesterday in New York and closed at $1,618.80/oz. Gold traded sideways in Asia prior to a sudden buying bout which saw gold rise from $1,618/oz to $1,625/oz. Those gains have gradually been given up in European trading where gold is now trading near yesterday’s close.

White – XAU/EUR, Orange – XAU/USD, Yellow – XAU/GBP, Green – XAU/CHF, Red – XAU/NOK – (Bloomberg)

Gold appears to be consolidating after hitting its 4th session of gains, when weak US economic data, in the form of poor retail sales, led to renewed QE chatter.

Gold is likely also being supported by real concern about the outcome of Greece’s elections on Sunday. This has led to one major foreign exchange provider suspending all trading in the hours around the announcement of the results of the Greek election.

Cash gold has gained 1% this week and appears to be reasserting its safe haven status due to the deepening debt crisis and near term risk of contagion.

Spain’s sovereign debt rating was cut three notches by Moody’s and market watchers feel they will need a ”bailout” soon even though they just received euro-zone financing to bail out their troubled banks.

While superficial analysis has recently again questioned whether gold is a safe haven and has suggested it is not due to its recent performance, gold is again acting as a safe haven for those who need a safe haven.

Gold has risen by more than 6.3% in euro terms so far in 2012, while FTSE and CAC are down by 2.4% and 4.9% year to date. While the DAX has risen by 3.3%, most European indices are down sharply.

Therefore, European holders of gold are again being protected from the market and monetary volatility.

Anthony Robbins Bullish On Gold - Faber and Bass His Financial Gurus

Tony Robbins (Anthony Robbins), one of the world's leading performance coaches and motivational speakers has recently warned about the risk of dollar devaluation and spoke about the opportunities in gold which is "exploding" and "is in a bull market."

At Robbins’ recent event in London (May 18-21), he spoke about the importance of getting good financial advice from the people who predicted this crisis and have made money for their clients in recent years.

Cross Currency Table – (Bloomberg)

He spoke about investment experts who he respects and specifically mentioned Marc Faber and Kyle Bass.

Robbins is one of most positive and optimistic people in the world. Nevertheless, he recently produced a YouTube video warning of an impending economic collapse.

Faber and Bass are extremely bearish on paper currencies and government debt and are very bullish on gold and silver bullion due to the euro zone debt crisis and looming global debt crisis due to the appalling fiscal state of Japan, the UK and the US.

Dr. Marc Faber is a Swiss financier who predicted the Wall Street Crash in 1987. He is the editor and publisher of the “Gloom, Boom & Doom Report,” author of many books including the best selling “Tomorrow's Gold: Asia's Age of Discovery.”

Faber advised investors to buy gold in 2001 and he is still extremely bullish on gold and silver and believes that gold will rise in all economic circumstances – a global inflationary economic boom, stagflationary environment or even in a global deflationary recession or depression.

Kyle Bass is the erudite Texan investor who saw the financial crisis coming and made a fortune in the sub-prime collapse – first from America's sub-prime mortgage crisis and then from betting that Greece would default. Now he’s positioned and ready for the collapse of entire countries, having bought credit default swaps on Greece, Ireland, Italy, Spain, Portugal and, interestingly, Switzerland.

Robbins shares the concerns of Faber and Bass regarding sovereign defaults and Robbins is very concerned about the risks of a US debt crisis and the risks that it poses to the US dollar.

A recent video “The National Debt and Federal Budget Deficit Deconstructed” by Robbins is well worth a watch:

Gold and indeed those who own it are often accused of being “barbaric,” “uncivilized” and “bugs.”

Indeed, there is often a suggestion that those who own gold are negative “doom and gloom merchants” who hope that the world financial and monetary system will collapse so that their gold holdings will surge in value and they will be “rich as Croesus.”

Anthony Robbins and indeed most who are positive about and advise owning gold very much contradict this silly view. Indeed, many of them have been warning about these fiscal challenges for years in an effort to protect family, friends, clients and the public.

The majority of people who buy gold are rational economic people who realize that there is macroeconomic, geopolitical, monetary and systemic risk in the world and they buy gold as a store of value.

They buy gold as they simply wish to protect themselves and their families from these risks by owning the financial insurance that is gold.

Robbins has a massive following internationally – especially amongst business owners but also in the sporting, media, music and entertainment industries and his endorsement of the importance of owning gold is significant.

Other News

(Bloomberg) – Barclays Expects Gold, Platinum-Price Recovery by Fourth Quarter

Barclays Plc expects the average prices of gold and platinum to increase by the end of the year.

Gold, which traded at $1,611.75 an ounce by 1:02 p.m. in London, is expected to increase to an average of $1,720 in the third quarter and $1,790 in the final three months of this year, the bank said in a statement handed to reporters in Johannesburg today.

Platinum, currently at $1,453.96 an ounce, is set to advance to $1,615 in the three months through September and $1,690 in the final quarter, it said.

(Bloomberg) – Commerzbank Says Platinum May Be at $1,750 By End of This Year

Commerzbank AG said platinum may be trading at $1,750 an ounce by the end of the year.

Silver will be $35 an ounce and gold at more than $1,900 an ounce by then, Commerzbank said in a report e-mailed today. The yearend forecast for gold is $1,900 an ounce, it said.

(Bloomberg) -- Gold May Advance 5% by July on Double Bottom: Technical Analysis

Gold prices, down 3.1% this quarter, may rebound 5% by July after hitting a “double bottom,” according to technical analysis by Infinity Trading Corp.

Gold may climb to $1,700 an ounce after falling to $1,529.30 on May 16 and $1,532.10 on May 30, said Fain Shaffer, Infinity’s president. A double bottom is a chart pattern showing a drop in price, followed by a rebound and then another decline to near the same level, usually indicating support. Bullion has closed above its 20-day moving average since May 31, another “bullish signal,” he said.

“Gold seems to be in an uptrend now,” Shaffer said in a telephone interview from Medford, Oregon. “The market is showing some strength.”

Yesterday, gold futures for August delivery rose 0.3% to settle at $1,619.40 on the Comex in New York, rising for the fourth straight session, the longest rally since Jan. 5.

Prices are up 3.5% in June after tumbling 10% in the prior four months. The 20-day moving average is near $1,586.

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

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Why Marc Faber the "Gloom and Doom" Man Is BUYING European Stocks - The Market Oracle

Best Financial Markets Analysis ArticleInvestment guru Marc Faber is actually buying European stocks...

But wait a minute...

Isn't Greece about to explode? Isn't Spain next? Isn't the very existence of the euro in doubt?

Yes, yes, and yes.

But this is the type of situation that contrarian investors like Marc Faber look for.

As the longtime editor of the Gloom, Doom, and Boom Report, Marc Faber looks for moments like this. For the most part, Marc has been out of stocks in the world's major countries for many years – since well before the dot-com crash in 2000.

But just recently on Bloomberg TV, Marc said European stocks are relatively attractive right now...

Most European markets peaked out a year ago in May 2011 and are down very substantially. They are approaching the lows or exceeding the lows of 2009.

So in Europe, what you have are many shares of good-quality companies that are yielding 5% to 7%.

If you look 10 years out... if you buy a 10-year U.S. Treasury at a yield of 1.6% [today], that is the maximum you will earn. Whereas companies that have dividend yields of 4% to 7% I think will provide you with higher returns.

We have record-low interest rates on cash. You're not earning anything in some countries. So I'm saying [European stocks] are relatively attractive compared to cash and to bonds.

It might seem foolish to step up and buy European stocks when Europe is so hated right now. But the opposite is true – this is the right time to consider it. European stocks are incredibly cheap.

In my True Wealth newsletter, we own Germany through the iShares MSCI Germany Fund (EWG). Top holdings include Siemens, BASF, SAP, Bayer, Daimler (Mercedes), T-Mobile (Deutsche Telekom), and BMW.

These are major, worldwide businesses. They are not going away. Heck, if the euro weakens, it will benefit many of these companies: The majority of their costs are in euros, but a significant portion of their sales come in dollars.

Best of all, thanks to the European crisis, many of these companies are trading at record-cheap values.

You might see Europe in the news and think it's foolish to put your money to work there. But legendary contrarian Marc Faber is interested. And so am I.

When you look at what you're getting for your money (like the holdings in EWG), and the incredible values now that Europe has busted, it's worth it.

The one thing is, German stocks are still in a downtrend. This makes me uncomfortable. I'd much rather wait and miss the first 10% of the "up" move than to buy today and try to catch a falling knife.

In general, European stocks are near-record-cheap – trading for less than 10 times earnings, at a discount to book value, and paying 4%-plus dividends. Today may not be the exact day to "back up the truck" and buy... but that day is close.

Don't fear German stocks. Get ready to buy them very soon...

Good investing,


View the original article here

FABER & SIEGEL: Dividend Payouts Make Equities A Buy - Business Insider

marc faberMarc Faber, of the "Gloom, Boom, and Doom Report," and Jeremy Siegel of the Wharton School agreed that buying equities is the right investment plan now, in a video interview with CNBC.

Here is what Faber had to say about the stock market against the bond market.

Everything looks bad at the current time and people are relatively bearish. At the same time you have the 10-year note at less than 1.5 percent, and you have stocks like Johnson & Johnson yielding 4 percent. I'm not saying that Johnson & Johnson won't go down with the rest of the market. I'm just saying if you have a time horizon of 10 years, that you're going to make more money in Johnson & Johnson than U.S. Government Bonds.

In response, this is what Siegel had to say.

Yes, I certainly agree with that. This is the first time in 60 years that the dividend yield on the market exceeds long term interest rates. It's the first time in 60 years that you don't need gains in stocks to have a higher return than gains on bonds. You don't have to worry about the day to day volatility if the corporation has good coverage on its dividends, because it's going to pay. That's a very special position for the stock market to be in. And I agree completely with that for long term investors.

Sunday, July 1, 2012

Gold Bullion "Has Bottomed" Says Marc Faber - BullionVault

The PRICE of Gold Bullion has now bottomed out, according to leading investment author and precious-metals advocate Marc Faber.

"I'm not sure that gold will not make a new high this year," Faber told Bloomberg in an interview earlier this week, "but I think we've bottomed out.

"Some Gold Mining shares have become very very inexpensive compared to the reserves they have."

CEO of Marc Faber Ltd and author of the monthly Gloom, Boom & Doom Report, Swiss-born Faber serves as a director or adviser to a number of investment funds, mostly focused on emerging markets.

Marc Faber first predicted the boom in Gold Bullion and commodity price back in 2000. Since 2001, the price of Gold Bullion has increased more than sevenfold, from $250 an ounce to approximately $1900 last summer. But since that extreme in early September, the price has fallen rapidly, at times dipping below $1525.

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