Dr. Marc Faber has made another bold claim for markets this year. After predicting QE4 in the US this year (here), Dr. Faber is doubling down on his bearish bets for asset prices by calling for a 40% reduction in the markets (presumably the Dow) that wipes out ‘5 years of capital gains’.
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Explaining his reasoning, Dr. Faber notes “We live in a very volatile world because of the excess liquidity that has been created by central banks and this will lead to a lot of volatility.” When asked what a prudent investor should do to protect themselves from this possibility, Dr. Faber singles out Tesla as a example of the company likely to go to ‘zero’ and then recommends Treasuries, and various emerging markets.
True to his nature, this is another contrarian call by Dr. Faber. Nonetheless, it is should be noted that he has been quite prescient in his recent calls including the 15-20% correction in US stocks at the start of the year and the subsequent rally in precious metals.
For all the details, find the interview in two parts below.
Part One:
Part Two:
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