Marc Faber "US Stocks Need To Drop 40% To Become Attractive"

Tyler Durden's picture

"The market is way overdue for a 20 to 30% drop," Marc Faber warns, "but that is not what worries him." Sarcastically reflecting on the typical talking-head that appears on financial media, Faber adds you won't "hear this view from someone who is fully invested," as he "hopes the market drops 40% so stocks will become - from a value point of view - attractive." The outspoken Faber channels Jim Grant as he exclaims, "the experience with quantitative easing is a complete failure. It has lifted asset prices and created asset inflation, but it hasn't lifted the standard of living of most people in the U.S. nor worldwide."


"I think the market is way overdue for a 20 to 30 percent correction,"

"nothing worries me... In fact, I'm hoping for the market to drop 40 percent so stocks will again become—from a value point of view—attractive."

"But that is not the view of someone who is fully invested—obviously not."

"Stocks are by-and-large fully priced"

"I think the experience with quantitative easing is a complete failure. It has lifted asset prices and created asset inflation, but it hasn't lifted the standard of living of most people in the U.S. nor worldwide."

On the chance of a bounce (and what next?)

"If the rebound fails around 1,820 [on the S&P 500] and then the market starts to drift again on the downside, and we see important shares for the market such as General Motors, GE, MMM, Coke ... failing to make new highs, then I think we can assume that something more serious is in the offing."

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Frank N. Beans's picture

Marc's getting a lot of airtime lately.  He's getting right-er every day.

TideFighter's picture

40% doesn't get us to 666. We all know that's where we left off, bitchez.

radwon's picture

Agreed. 666 the likely "floor stocks will find".

Dr. Engali's picture

If and when this thing does finally break, I believe we will see S&P 400.

Boris Alatovkrap's picture

Marc Faber is sound like Boris' wife, "Boris, you are need drop 40lb for becoming attractive"!

akak's picture

If Boris wife is look like Mark Faber also, suggest Boris not to lose the 40 lb.  Maybe even gain.

RafterManFMJ's picture

To be fair, you've never seen Marc in a blonde wig and 5" stripper heels.

LetThemEatRand's picture

Yellen wears flats.   So correct.  

zaphod's picture

There need to be at least 40 times fewer Faber articles for me to bother reading them again.

TheLooza's picture

So what. Faber needs to grow a new head of hair to become attractive, and that's about as likely as a 40 percent drop.  

samcontrol's picture

Most of my stuff was down 40% last year, before you guys jump on me , I managed only (:) a one digit loss! yuppy.! ?, !

...those are probably really good for this year, miners! reits! and bio.

the likes of paas,exk,agnc,arr,cytx, nbs.

I bought SPROTT physical silver while back at 14.
Yesterday i tripled my position at 8.
Live in
Argentina and cannot buy the amount phys I am talking about here.
I must partially continue with the best paper I can find.

OT. .THE building Yesterday all over the NEWS now 24 hr coverage
. 2days national....WTF!?
YET they still have not heard what the DEPOT and company are about...fucking sheeple... " justice will investigate the company" lol.
lucky i read 0hdge.

samcontrol's picture

not sure of the question..?

but with my standard of living Iwe have it will be very hard to spend or lose all my money before I die, and will be leaving to the family multiple properties.

MeelionDollerBogus's picture

So let's get this right, PSLV is paper, you never hold silver in your own hands,
AGQ is paper like PSLV but is 2x leveraged, where as PSLV acts as a 1.17x ETF.
Why buy this? No silver atoms are in YOUR hands, your skin doesn't contact those atoms.
Am I right? silver1.17 x 63/263 = pslv approximately

Sarc, are you hiding somewhere in here?

BringOnTheAsteroid's picture

Boris buys wife a bunch of flowers.

Boris wife says: "Look like I spend night on back with legs up in air".

Boris says: "Why, we no have vase".

BringOnTheAsteroid's picture

There won't be a system left, there's too much leverage. A 40% drop will destroy the collateral chain, too many companies and banks will go bust. We are approaching the end of debt and credit expansion.

This is why I doubt short positions will be paid out, the trades will be reversed, the markets will be either shut down or burnt down. The financial asteroid is well on it's way and has probably already entered the atmoshphere. After the last few years if people can't see a system in its death throws then you ain't going to see a freight train barrelling down a train track when you're car is broken down across them.

This is it people. Forty to fifty years average that most readers on ZH have experienced of unprecedented peace and prosperity. The contrast to what is coming will be breathtaking. I imagine for some time we will be frozen in fear, unable to adjust to the new reality. We have pushed the limits and way beyond of our treatment of the environment. The population has expanded like a bacteria colony consuming all in it's wake, like soldier ants rampaging through a jungle leaving bare twigs and and no living thing behind. We have long since dispatched with integrity in business, banking and politics. Greed has reached its climax.

It's not going to be fun. 

Larry Dallas's picture

Does that mean we don't have to be politically correct anymore when that happens?

Freewheelin Franklin's picture

The only questions are:


1. Who will be the "Strong Man" that has a "Plan" that will "save" us?


2. Who will the "Scapegoats" be?

We know it won't be the bankers. They'll all be hiding in Belize or Costa Rica. The Jews would just be redundant. So, I'm guessing teh evul Koch funded Tee Bugger?.


RafterManFMJ's picture

Set my limits at 668. PULL IT!

BringOnTheAsteroid's picture

"In" where, there will be no system. The algos will tear themselves apart when the first drop hits the tape. The investment banks have to go for a start because they are the rot at the heart of the system. The easy money ride is over of clikcing a buy or sell button and seeing dollar signs in your eyes. We'd all be lost without our little gambling habits on the stock market. 

tip e. canoe's picture

no, but it does get ya to around 999, the new & improved 666 (adjusted for inflation).

Zero guest's picture

It will take 75% over three years to get us to the other boundry of the expanding diagonal triangle that started in 2000.

ebworthen's picture

TideFighter said:  "40% doesn't get us to 666. We all know that's where we left off, bitchez."

Exactly.  I've been pounding the desk for S&P 666 as true valuation for five years; it is the only real valuation that reflects reality and Satan sitting in reign in Washington and Wall Street as reality.

Canoe Driver's picture

Listen math majors, the trebling of the Fed balance sheet puts a new floor in. It can be calculated.

Moe Howard's picture

Obamao got us to 666. Trillion more in debt that is.

Cabreado's picture

Slight correction:  he's getting milked by a media that doesn't particularly care; he's had it right for a long time, passes along the hints, and plays it like a gentleman.

And I'd guess Faber would agree:  don't put all your eggs in his basket -- he can weather the storm more than most.

The Dunce's picture

Faber is wrong.  And here's why.  Yellen won't let the market collapse.  She'll keep inflating the bubble by printing more money.  Good new for you gold bugs.  Word to your mother.

stocktivity's picture

He's been wrong for 5 years straight...and still getting airtime.

Osmium's picture

40% would be a good start.

kaiserhoff's picture

That it would, but even then, which stocks?  Europe and Asia haven't had real growth stocks for decades.  The US is following suit.  As industry groups go transportation, energy, and mining are possibilities, but that smacks of a third worldish list, with all the possible boom and bust cycles of Australia and Canada.

It's hard to make a solid case, based on fundamental analysis, for any of these turkies.  That may be as much a problem as valuation.

BandGap's picture

I like how people throw around these percentages. My opinion is that if this market drops 30%, it is just as likely to drop 75%, or 90%. This is like losing blood, once you're past a certain point it doesn't matter when you stem the bleeding.

And I like Marc, but really, who the fuck is going to have $$$ to buy stocks if they can't get enough food or heat? Again, just to cover the loses there isn't going to be much left over to begin a rebuilding process. Hell, think of the unwinding that will take place. The market doesn't rebound past a certain point.

Just sayin.

Murf_DaSurf's picture




ok, I'll butter up the bread for 50%

philipat's picture

There is no bread. Let them eat cake.

DirkDiggler11's picture

One question, why is Faber on TV doing interviews almost daily ?

onelight's picture

Cash on the barrelhead...keeps a lot of people talking..

Conman's picture

Obviously he want to show off his awesome pony tail. Hopefully Marc will let me ride in his tank when he gets it.

akak's picture

The only look for a man more idiotic and repellant than the beard with no mustache (the Amish Look) is the bald man with the grey ponytail. 

What the FUCK are they thinking???

MeelionDollerBogus's picture

OK, now picture Faber with a Chilton Mullet.
Oh, did I forget to mention not putting coffee in your mouth first?
Your bad, should know better by now.
Hey, at least it wasn't the MsCreant Yellin special.
I hear it's extra-moist today.

Wilcox1's picture

It is an awesome pony tail.  It is like punctuation to his view.  Marc Faber = financial syntax.

philipat's picture

It is ironic that in the above screen shot, the caption below Marc's picture is "Stocks find a floor". It's fairly obvious where CNBS is coming from?!!

kurt's picture

Refreshing in its simplicity.

Iocosus's picture

Standard of living has not improved? No shit, I'm back to Ramen noodles and Nattie Ice.

Charles Nelson Reilly's picture

Try Natty Boh, should be cheaper. it tastes like shit but after the 5th one you can't taste it anymore

BandGap's picture

My oldest had me try that before golfing last summer. Tasted like mop water. NEVER drink it warm. My piss would taste better.

BandGap's picture

The Breakfast of Champions.

Spitzer's picture

40% ?

That's just Marc's sentiment call. It has nothing to do with fundamentals or when this 35 year long credit cycle ends, if ever.

When we have a currency crisis, which is the only way this credit cycle will end, stocks will be valued on real yields and fundamentals. 8% real yields across the board is would be a good start.