Here’s an unusual duo for this version of bull versus super bull. In an interview on CNBC earlier today, Marc Faber, generally a bear, said he was bullish on equities in the near-term mainly because investors have become too negative. Jeremy Siegel of Wharton, the noted permabull says stocks are long-term attractive. Now to be clear, Faber’s not that bullish. In a later part of the interview he said the global economy is entering a recession, China’s experiencing a hard landing, Europe is coming apart at the seams and that corporate profits were likely to get slammed. But he’s near-term bullish….More via CNBC with full interview below:
You won’t often find Marc Faber and Jeremy Siegel taking the same side of an argument, but both market gurus believe that, despite the global turmoil, investors are better off with stocks than government bonds.
…Faber, the noted bear and author of the Gloom Boom & Doom report, and Siegel, the bullish Wharton School professor, believe that with negative real bond yields prevailing there’s little choice but to pick stocks.
“Everything looks bad at the present time and people are relatively bearish. At the same time, you have the 10-year note at less than 1.5 percent and you have stocks like Johnson & Johnson yielding almost 4 percent,” Faber pointed out during a Monday “Squawk Box” appearance on CNBC.
“This is the first time in 60 years that dividend yields on the market exceed long-term interest rates. It’s the first time in 60 years when you don’t need gains in stocks, that you don’t need higher returns than gains in bonds,” Siegel said. “You don’t have to worry so much about the day-to-day volatility if the corporation, if the firm has good coverage on its dividend, because it’s going to continue to pay.”
See below for the full interview: