Marc Faber: Expect Markets to Stabilize and Rebound (Somewhat) in the Short Term

Marc Faber's observations on a CNBC interview from January 19, 2009:

• 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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Marc Faber: World War 3 Has Already Begun

Marc Faber interviewed on Bloomberg on January 6, 2009. He gives the Bloomberg talking heads a nice lesson on how capitalism works early in the first video.

Comments on the economy:

• 2009 will be a "write off" economically
• The Obama economic plan will be a disaster in the long run - as is all government economic intervention

On gold and industrial metals:

• Gold is now extremely overvalued compared with other industrial metals - he would rather buy a basket of oversold industrial metals than gold
• Small mining companies have been decimated - he'd look at these also
  

On world geopolitics:

• World War 3 has already begun - he's referring to US occupation of Iraq, Afghanistan, and the potential India/Pakistan conflict
• China and Russia want nothing to do with American troops in Central Asia
  

On market leaders:

• He favors the market leaders in each industry (ie. Intel, Cisco, Microsoft, Oracle), as they will be the strongest position when the economy turns up
• Especially likes the top names in Asia - names a few examples around the 2:30 mark
  

On the BRIC's (Brazil, Russia, India, China)

• He'd look at buying here as a trading opportunity, because asset prices have come down so much - they now look oversold
  
• Prefers ETFs as the trading vehicle
• "You have to buy the tennis balls that rebound."

"The trade of 2009 is to short US Treasury Bonds - big time."


Marc Faber Video - Part 1:



Marc Faber Video - Part 2: