Saturday, September 23, 2017

It’s A Miracle India Grows At All Given Its Horrific Bureaucracy

I had argued for years that I would rather be invested in India than in the U.S. But I have also pointed out that it’s actually a miracle that India grows at all given the horrific bureaucracy India has. This is now really a case where it’s a miracle that India grows at all given the bureaucracy that it has. I tell you, this is about the worst encounter in the whole world.

Wednesday, September 20, 2017

Marc Faber: Trump will be a much better president for world peace

Marc Faber, editor of the “Gloom, Boom & Doom Report”, explains why he thinks a Donald Trump presidency may not be such a bad thing for the global economy.

- Source, CNBC

Sunday, September 17, 2017

Marc Faber: Canada needs to diversify away from U.S. trade dependence

Marc Faber, editor and publisher of the Gloom, Boom & Doom Report joins BNN to discuss why Canada needs to diversify its trade policy away from the U.S.

- Source, BNN

Thursday, September 14, 2017

In The Age Of Cyber-Terrorism, Every Investor Must Own Gold

Take it from “Dr. Doom”: own some physical gold and keep it out of the banking system.

Dr. Marc Faber, a legendary investor and the editor/publisher of the Gloom, Boom & Doom Report, is well known for his contrarian investing style.

In a recent Metal Masters interview with the Hard Assets Alliance, he noted that the biggest geopolitical risk for Americans today is not a conventional war but rather cyber-attacks that could take down the U.S. power grid.

In such a scenario, gold would become an irreplaceable medium of exchange. But it’s not the only reason to own gold today.

Diversified Assets Outside the Banking System

Faber grew up in Switzerland right after World War II, a tough time that caused his family to distrust paper money and taught him the importance of precious metals as a safety net.

Faber remembers how his father talked about rich people as millionaires. “That, in the ‘50s and ‘60s and ‘70s, was a lot of money. Today, a million is nothing at all—small change. Unfortunately. When people talk about, ‘Oh, there is no inflation in the system,’ this is nonsense. Compared to assets, money has lost a tremendous amount of purchasing power.”

After working on Wall Street for over two decades, Faber’s assets consisted mainly of bonds, equities, and real estate. He says it was in the 1990s when he realized that “it’s good to have a diversified asset outside the banking system and not financially related” and began to purchase some physical gold every month.

The Fed largely ignores gold as an asset, he says, because “gold is an embarrassment to central banks.”

- Source, Forbes

Monday, September 11, 2017

Marc Faber: There will be another ‘massive’ financial crisis in my lifetime

Marc Faber, editor of the ’Gloom, Boom & Doom’ report, speaks to CNBC’s ’Squawk on the Street’ crew on his market outlook. Faber says he expects to see another 'massive' financial crisis in his lifetime.

Friday, September 8, 2017

There's no all-clear signal in the markets

Marc Faber, editor and publisher of The Gloom, Boom & Doom Report, discusses his perpetually bearish outlook for markets.

- Source, CNBC

Wednesday, August 30, 2017

Dr Doom Marc Faber won’t buy these four Nifty stocks

‘Dr Doom’ Marc Faber, a perennial bear investor who has been surprisingly bullish on Indian stocks, has started turning a little cautious on Indian equities. In an interview to CNBC TV18 this week, Marc Faber — renowned investor and author of Gloom, Boom & Doom report — reiterated his belief that the Indian equity markets will outperform the US markets over the next 10 years, but added a note of caution over valuations, given the recent run up in the benchmark indices.

Further, Marc Faber also raised concerns on the valuations of individual stocks which have high P/E multiple ratios of 50x or above. “Some Indian valuations are around 50 times the earnings, which I would regard to be on the high side,” Marc Faber said in the interview. Even though he conceded that a collapse in such stocks may not be immediately due, Marc Faber said that he would still not buy such stocks.

“The stocks may not necessarily collapse right away… maybe they would actually go to 60 times the earnings or even 70 times the earnings,” Marc Faber said, adding that a lot of things have to fall in place perfectly to buy those stocks at so high valuations, and that he would rather stay away from such shares. “I am just saying that once you pay 50 times the earnings for a stock, everything has to go perfectly well to justify that valuation. I wouldn’t buy a stock at 50 times the earnings,” he said.

Indian equity markets are on a rampage of late. Benchmark equity indices Sensex and Nifty have risen over 21%-22% so far this year since January, with NSE Nifty-50 hitting a historical five-digit mark of 10,000 points for the first time ever. With it, the sentiment has lifted several stocks to unprecedented levels in terms of valuations. Within the NSE Nifty 50 universe itself, there are at least four stocks trading above the price-earnings multiple of 50 times of above — a level too high to justify investment by Marc Faber’s standards.

Bharti Airtel Ltd ended at Rs 413.35 on Friday and has rallied over 45% since its November lows after demonetisation. The shares of India’s largest telecommunication services provider are trading at over 61 times earnings. By contrast, shares of Reliance Industries, whose Jio telecom service is the main competitor pressurising Bharti Airtel’s margins, are at a P/E multiple of 16 times.

Asian Paints Ltd, at Rs 1,152.85 at Friday’s close, has a price/earning ratio of over 60x. The stock of the paints and chemicals company has rallied over 35% since its December lows. Earlier this week, Asian Paints said its fiscal first quarter net profit fell over 20% on-year to Rs 440.74 crore, missing most analyst estimates by a wide margin.

Hindustan Unilever shares, which ended at Rs 1,154.1 on Friday, have a P/E multiple of over 56x. The stock is up over 47% from its last low levels seen in December. One of the leading FMCG companies in India, Hindustan Unilever is one of the firms expected to get a huge boost from the growth in local consumption and ease in movement of goods following the implementation of GST earlier this month.

Bosch Ltd shares are not just expensive by their P/E multiples, but by their prices as well. At Rs 23,768.55 on BSE at Friday’s close, Bosch shares have a price-earning ratio of over 50x. Since November, Bosch shares are up over 32%.

Not only this, there are at least four other Nifty 50 shares which are at a PE multiple of between 40x and 50x. Cement maker ACC Ltd and farm tractor and commercial vehicles maker Eicher Motors are at respective Price-Earnings multiples of over 48x and 47x. Whereas, pharmaceutical major Cipla Ltd and another cement maker Ambuja Cements Ltd have P/E multiples of over 45x and 41x respectively.

Sunday, August 27, 2017

US stocks are overheated; so Marc Faber is buying Asian shares, and gold

Marc Faber’s disenchantment with equity shares, especially US stocks, is well-known. However, it is not very often that the 80-year old veteran gives others an insight into his portfolio. Often referred to as Dr Doom, renowned investor Marc Faber — the author of Gloom, Boom & Doom report — said this week that he has allocated only a quarter of his portfolio to equities, and that too, mainly in Asia. The remaining three-fourths of Marc Faber’s money is mainly divided between real estate, precious metal and gold shares.

The reason is simple: Marc Faber is not a believer in the rally in the US stock markets, and seems to be openly opposed to the US President Donald Trump’s ideas! “Don’t be overly optimistic,” Marc Faber said in an interview to CNBC television earlier this week. Just before that, Donald Trump had tweeted: “Highest Stock Market EVER, best economic numbers in years, unemployment lowest in 17 years, wages raising, border secure, S.C.: No WH chaos!”

However, Marc Faber, as usual, was unimpressed. “If you look at the markets, there are lots of stocks that are lower, and significantly lower than they were at the highs. And so, it’s not an all-clear signal,” he said, adding that the risks have increased. Marc Faber pointed out to huge disparity between the returns in gold and gold ETF index. While the S&P index is up 23% since January 2016, gold has returned 20% in the same period. Meanwhile, the GDX, the Gold ETF index, is up by 80% since January 2016, indicating that the markets are very distorted and investors are in a very artificial environment, he said.

To counter this, as alternatives to US stocks, the perennially bearish investor invests in “very simple” areas of investment involving real estate, overseas equities and commodities. “I don’t change that asset location a lot, but I am aware that there is a risk because if equities go down, then obviously all my bonds will likely go down,” Marc Faber said.

He revealed that he allocates 25% of his portfolio in real estate, mostly in the Asian markets, adding that he has also taken exposure in precious metal and gold shares. In the same breath, Marc Faber added that the financials in Europe look reasonably attractive.

Earlier last month, Marc Faber, who seldom minces words, reinforced his preference for investing in India over the US on the back of a strong government led by Prime Minister Narendra Modi. Not only this he also described the US government as “corrupt like hell”, adding to his list of strong phrases to refer to the western administration. Earlier this year, he had used the phrase “rotten western democracies” while citing his preference to invest in India over the US markets.

Thursday, August 24, 2017

Why Marc Faber Predicts a Correction in the S&P 500 Index

Faber said in the interview that although the US indexes (QQQ) (DIA) are making record highs, investors should be cautious about the market rally. He said the market is “very distorted.” So could investors face a correction in the market (SPY) in the near term?

Since January 2016, the S&P 500 index (SPX-INDEX) has risen nearly 23.0%, as of August 3, 2017. Gold prices (GLD) have risen nearly 16.0% during the same period. The SPDR Gold Shares (GLD), which tracks the performance of gold, rose nearly 17.0%, and the iShares MSCI Global Gold Miners (RING), which tracks the performance of gold miners, rose nearly 64.0% during the same period.

In the past, we’ve seen that when the equity market tumbles, investors moved toward safe-haven assets such as gold and the Japanese yen (FXY). Gold outperforms in that scenario. In 2008, when the global debt crisis spooked the equity market, gold rose about 145.0% from September 2008 to July 2011, while the equity market took a huge fall. Since July 2011, the S&P 500 index has risen about 62.0%, touching its high of 2,130 in July 2015. During the same period, gold fell about 92.0%.

It shows that the equity market and gold have an inverse relationship. They are negatively correlated. Between January 2010 and December 2015, GLD had a negative correlation factor of 0.89 with the S&P 500 index. However, in the present situation, both the S&P 500 index and gold are moving in the same direction. According to Faber, this situation might lead to a great disruption in the market.

- Source, Market Realist

Monday, August 21, 2017

Marc Faber touts Three alternatives to what he sees as risky US stocks

Marc Faber, the editor of The Gloom, Boom & Doom Report, told CNBC on Monday that risk has increased as stocks have moved higher.

"Don't be overly optimistic," the widely followed newsletter analyst also known as "Dr. Doom" said on "Squawk Alley." "If you look at the market, there are lots of stocks that are lower, and significantly lower than they were at the highs. And so, it's not an all-clear signal."

Faber added he believes the market is "very distorted" and said investors are in a very artificial environment. He then explained what he called his "very simple" areas of asset location, which break down to three alternatives to U.S. stocks, including real estate, overseas equities, and commodity investments.

"Twenty-five percent in real estate; my real estate is mostly in Asia. Twenty-five percent in equities; I have mostly Asian equities," he said, adding financials in Europe look reasonably attractive. "Then I have some precious metal and gold shares."

"I don't change that asset location a lot, but I am aware that there is a risk because if equities go down, then obviously all my bonds will likely go down," he said.

Faber spoke as the three major indexes were on track for their best month since February. The Dow Jones industrial average hit a record high Monday as Wall Street cheered on what's been a strong earnings season.

Equities reached record highs last week, but some strategists say the technical backdrop for stocks shows investors should be cautious.

- Source, CNBC

Friday, August 18, 2017

Volatility will pick up Massively, says Marc Faber

Volatility will pick up ‘massively’, says Marc Faber from CNBC.

Marc Faber, editor and publisher of “The Gloom, Boom & Doom Report," talks about the outlook and volatility for markets.

Tuesday, August 15, 2017

Why Marc Faber is overweight EMs

Why Marc Faber is overweight EMs from CNBC.

Marc Faber, editor of The Gloom, Boom & Doom Report, says President Trump's policies have actually been good for foreign stock markets.