MARC FABER – EXPECTING A NEAR-TERM DECLINE
13 January 2010 by Cullen Roche
10 Comments
Marc Faber is now looking for a near-term decline in stocks and says the U.S. is doomed:
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Comments
Would you invest / trade based on Faber’s short-term calls?
I would love to know if anyone has a track record from Faber. His recent calls have been very good, but does anyone know about his history before that?
my goodness, what a character..
No I would not. He failed miserably several times before like Pretcher.
Any sources for that info?
I don’t have a list of sources but I have followed him for a number of years. He generally has the macro ideas right: emerging markets (west to east), commodities, money printing, etc. He has been all over this for so long it would make any one else look like a newbie. In terms of his “near-term” calls I would think just about anybody could be right (or wrong) and I wouldn’t really trade based on it. My own view of the market is that there’s plenty of cash sitting around to buy the dips. Most of the movement is tightly correlated (meaning people are buying SPY, IWM, EEM, etc.) and individual movement is just heat mappers, insider information, or “analyst” upgrades (downgrades apparently went away about 6 months ago). I personally play the SPY for a scalp trade every few days with tight stops. I doubt I’m alone. Most hedge funds have no idea where to put their money right now as it’s all dependent on government (bad) policy.
My experience with Faber has been generally favorable as far as pundits go. As Edna said, he tends to have a good grasp on the macro trends and then trades within that which is a far superior approach than most pundits who have no clue what the macro trends even are. He appears to connect the dots better than most.
I have no idea how his actual performance is, however, so it’s difficult to judge someone without knowing how well they’ve actually performed in the past.
He’s done better than most people, but has been a little bit all over in the past few months. Saying to sell stocks, then stocks can go up forever due to money printing and to buy, and now he is saying a near term correction and later a rally but maybe not to new highs. But, like I have said, he does much better than most people do and that says a lot for an economist.
With that being said TPC, Marc Faber thinks that gold will have a correction (as he said in the video) and that would go in line with that big option trade against gold.
I read his book ‘Tomorrow’s Gold: Asia’s Age of Discovery’. He’s got some good good thoughts. As other macro strategists, they are not short term trading ideas. Other than Soros, many of the most successful long-term investors have been early by 1-2 years … just look at those that have made windfalls in 2008 from CDS. (Not so surprisingly, all the ones you don’t hear about have been spectacularily late!)