Saturday, 19 December 2015

Precisely the wrong time for an interest hike! Market is manipulated by a bunch of clowns! What should you do? - Marc Faber

Marc Faber, the Swiss investor based in Thailand and the publisher of gloom boom doom report said the above. 

As from wiki, Faber is credited for advising his clients to get out of the stock market before the October 1987 crash. Faber predicted the rise of oil, precious metals, other commodities, emerging markets, and especially China in his book Tomorrow's Gold: Asia's Age of Discovery. He also correctly predicted the slide of the U.S. dollar since 2002. In 2012, Faber claimed that there was a "100% chance" of a global economic recession later that year or in early 2013. 

Faber also said that the market is likely to crash in 2016/2017 period. 

Precisely the wrong time for Fed to hike

Few days ago, Faber was interviewed by CNBC and he said Fed rate hike is not so important compared to the global economy now. The fact is global economy is decelerating and many countries is in recession or going into recession.

He felt that after QE3 in 2012, the economy is growing rapidly and it presents good time to hike and not compare to now. In theory if they raise rates now, it is precisely the wrong time. Refer to link here.

In an interview last month, Faber also said the market of today is manipulated by a bunch of clowns in central banks around the world. Refer video below. 


So what we should do according to him?

You have to be diversified now!

“Hold some real estates, some equities, some bonds and cash, and some precious metals.”

And even if you hold gold, you must hold the physical gold outside US or Europe, and preferably keep in the East.

5 comments:

  1. Well, Marc Faber is one of those gurus who are convinced and like to make contrarian predictions. A lot of them actually. So based on the probability principle sooner or later they will be right.
    Following his advice all the way people would have missed many opportunities to grow their nest egg.
    Having said that, what happened the last 7 or 8 years can not go on forever.
    I agree diversification is essential. I force myself never to forget geographical diversification as well as strategic diversification in order to achieve 'real diversification'.

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    Replies

    1. Hi Andy,

      Faber is not alone being accompanied by Peter Schiff, who is also at the extreme end of the bear, for a long period of time. While I do not agree entirely with them, their bearishness reasoning does have a strong logic behind.

      Like what you say, the market rally cannot go on forever, esp after 7-8 years, so this is one reason why I decide to post this article to create a contrarian view to the recent rally over the recent rate hike.

      And sometimes, it can be fun listening to them! Last but not least, I agree that many opportunities will be missed if we followed Faber's advice throughout the years. Haha.

      Yes, diversify diversify diversify!

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  2. Rolf,

    I like Marc Faber.

    Look, if a guy can wear a pony-tail like him, he must be quite self-assured!

    I'm also an omnivore :)

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    Replies
    1. Hi Jared,

      Yes, I like Marc Faber too! I think he is a funny guy. At the very least his long term bearishness is mainly on US and he does come with some suggestion of how to deal with it.

      Yes, I like the pony tail, and I am an omnivore also. haha :-)


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