- The corporate credit markets have improved somewhat
- He expects government bond markets to weaken, due to the increasing unlikeliness they will be able to pay off their mounting deficits - believes this may be the "next shoe to drop"
- There's a very good chance the 2nd half of 2009 could be even worse than the 1st half of 2009
- At 850-900, the S&P is not particularly inexpensive, because corporate earnings continue to dissolve
- There are some pockets of value in Asia, and many stocks have attractive dividend yields at 3 to 4 times the bond yields
Faber on Commodities
- The bull market in commodities is still relatively young (started in 2001) - while the bull market in stocks started about 20 years earlier
- Supply of many commodities will suffer greatly due to this credit crisis
- When the global economy recovers, many commodities will rise substantially as a result
Faber on Inflation vs. Deflation
- While there has been a deflation in asset prices, he has not noticed any deflation in consumer prices
- Doesn't know who "in their right mind" would buy a 30-Year US Treasury that is yielding less than 3%...in a structurally weak currency
Faber's Current Investments
- Thinks the markets became very oversold in November
- Anticipates the markets will stabilize and rebound somewhat over the next couple of months
- Has some shares in Asia, mining stocks, exploration companies, physical gold, and a basket of currencies
- Thinks the dollar could strengthen further in the short term
Part I: Marc Faber on CNBC - January 19, 2009:
Part II - Marc Faber on CNBC - January 19, 2009:
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