This page has been archived and commenting is disabled.
Marc Faber: "It's Too Late To Buy US Stocks"
By early March "the US will be in the 2nd longest bull market of the last 80 years," and as Marc Faber warns, "usually, these long bull markets end badly." Simply put, The Gloom, Boom, & Doom Report publisher notes "it's too late to buy US stocks," warning of previous major declines like 1987, 2000, and 2007. "It's not an opportune time" to buy US stocks but while it might be too early to buy some of the beaten-down emerging markets at these levels, Faber believes investors can make money in the longer-term - "I think I can make the case that over the next five to 10 years, I will make more money by buying now in the emerging economies then in the U.S."
This is the 2nd longest rally and if we look at nominal market prices going back to 1900, we find that the current rally of 135.23% (as of January 27th close) ranks as the 7th biggest rally in history. As shown in the chart below the current rally ranks behind the 1920-29 market bubble, the post-WWII bull market and the "tech boom" of the 90's.
Of course we have noted previously that stocks are not cheap in the US...
As you will notice, we are currently at valuation levels where previous bull markets have ended rather than continued.
»
- 22538 reads
- Printer-friendly version
- Send to friend
- advertisements -
As long it's no the longest bull market I am not concerned.
It's not too late to buy gold. Yet.
According to St. Louis Fed, the Monetary Base has halted it’s $100 B/mo growth and as of Jan, added just over $10 B/mo…bout to go negative??? Big change in trajectory since November…prior to taper $10B (now $20B/mo taper)??? Somebody draining the pool??? http://research.stlouisfed.org/fred2/series/AMBNS click on 1yr or 5yr chart to see big change http://research.stlouisfed.org/fred2/graph/?chart_type=line&s1id=AMBNS&s... http://research.stlouisfed.org/fred2/graph/?chart_type=line&s1id=AMBNS&s... During periods since ’09 when the monetary base was flat, equities have been down / flat and then lifted by anticipation of QE / QE execution. If this pattern holds (particularly w/ record leverage) stocks bout to get clobbered. Also notable is that golds big upside runs happened during the flat periods or QE runoff periods…
here are the last five months…after growing consistently by about $100B/mo all ’13..Novembers growth was $31B, Dec $13B…and likely going negative in next month???
2014-01: 3,749.462 Billions of Dollars
2013-12: 3,736.789
2013-11: 3,705.077
2013-10: 3,610.306
2013-09: 3,508.808
This slowdown is way in excess of tapering and looks more like reverse repo’s kicking in??? Correlation to market downturns since '09 has been 100% when this happens.
I feel pretty good buying PHOT & GRNH.
Buy only what you can smoke.
Im looking for that chart of the Argentine monetary base shrinking just before the devaluation. And I am not talking about that inflation chart.
Hang on a minute .. checking my chart bank...
Ah found it
http://www.goldonomic.com/Argentina_Money_Supply_1995to2009.gif
Would add your interpretation of the chart?
First deflationary shock, then massive inflation?
And guns.Going forward DoChen I hear you mate.
Not this old fart again. In the meantime, gold gets smacked. Safe haven? Not while the Comex exists.
Gold does not get smacked. Ever. GLD does. Know the difference, MF, er...FM.
I think that 99 times out of 100 that I will get a higher price selling GLD than I will by walking into my local gold shop. If I want to buy, then GLD wil allow me to buy at a lower price. If the SHTFand my paper becomes worthless, so be it.
have you ever heard N.N. Taleb's saying "that's like picking up nickels in front of a steamroller"...? Or his other gem "it's not the frequency with which you are right that counts, but rather the aggregate of your losses." Jus wunnerin.
(BTW, ya can't sell GLD at yer local gold shop)
GLD sold 560 tons last year of the 1000 tons from ETF's / Comex (fund drawdown from 1350 to 790 tons) - to provide the same 560 ton quantity to the market again GLD will need be drawn down to 230 tons (or about 70% from here and price will need collapse to enable this further outflow)...but so far in '14 demand is higher than '14 and GLD has been marginally adding about 10 tons...
Oh.
I was really hoping for "gee" or "wow", wanting "neato", but "oh" will do.
Guess that's my way of saying price is likely to go up.
Thor meant this sort of "Oh" (at about 3:50):
https://www.youtube.com/watch?v=Eu7GgZbCLsY
How many GLD claims are supposedly on the phyzz? And how many of the GLD claimholders can actually convert to phyzz?
100 + claims per deliverable oz...most of those holding non-deliverable would convert to deliverable if the price was higher (likely much higher)
They were rhetorical questions to point out the irrelevance of your data about the volume of physical gold underlying GLD. If there are 100+ claims of GLD per deliverable oz, and GLD transactions are setting the "price" of gold on the margin, then what is the implied, "real" price of physical gold? That's the relevant discussion.
Alright I get that question but I don't understand how people can say the price of physical gold is not going down. I can buy physical cheaper today than I could a year or two ago. That's just a fact. So can you explain what they mean?
You are mixing the ETF (GLD) with Comex futures. No one knows how much physical GLD has as the vaults are not audited, unlke CEF. Comex has 100+ claims for every deliverable ounce.
The cost of gold coins tracks gld pretty well so far. Unless 'smacked' does not refer to purchase cost. Long run, the real thing will outpace.
GLD isn't even trading at the moment. That is physical gold getting hammered. Not GLD. As long as the Comex futures control the physical price, it will be physical that gets the hammering.
Ok, he had a top (and then decline from there once it reached it) on the S&P at 1340-50 in 2011, that makes me want to believe he is right this time around. But maybe Monsieur Yellen will screw him, as did his(Yellen's) predecessor.
If you are wondering whether he is right this time around, you are playing checkers. It is not a matter of whether he is right, just when it will come to pass. Check.
Check. K - G8. Double check..., ruh-roh...
+1, but I think you cross-bred Boris Spasski with a bad Aaron Rodgers commercial...
Da Bears.
No he isn't hoping for the worst, he is patiently preparing for it's inevitability.
I like Marc Faber, but I'm still waiting on that 20% correction call from levels 40% lower than where we are now. The market is a policy tool and until that changes the only response is to BTFD. When policy does change there will be no getting out.
When either policy changes or sentiment does. I'm not wagering on which it will be (or when), only that both are accelerating to their respective tipping points.
Well said, Doc.
Faber has a sense of humor and a sense of style. He plays the game on a global scale, but which "emerging markets" is he talking about? Argentina, Venezuela, Greece, Colombia, Eastern Europe? What is the last time one of these suckers emerged and stayed up long enough for someone to get their money back, much less a profit?
I saw this clip live (in a moment of weakness, forgive me)...Faber was in part responding to the shill commentator who in his comatose state declared that whatever the returns might be in emerging markets relative to the U.S., there would certainly be "less risk" in the U.S. So Faber's comments were very, very crafty in dressing down that assertion.
The least worser? Thanks.
This is the 2nd time I've heard Marc mention Vietnam as a favorable EM to research.
"usually, these long bull markets end badly."
It should read, "usually, these long, Fed funded centrally planned bull markets end badly"
Star Spangled Banner on Kazoo!
http://www.youtube.com/watch?v=mCXC4SlZ-ic
May 2012: Marc Faber Sees A 1987-Like Crash Approaching
Aug 2013: Marc Faber On Today's 1987 Redux "Market May Drop 20% Or More"
And the biggest LOL of them all...
May 2012: Marc Faber Sees 100% Probability Of Global Recession In 2013
I feel bad for anyone who actually takes this clowns advice.
Good thing there wasn't a global recession in 2013. Oh, wait...
What does the economy have to do with stock prices the last 5 years (or arguably longer)?
Everything. The more the sheeple have been sold on the Keynesian myth that monetary stimulus is needed to jump-start the economy, the more stawks have been inflated. Prolly a 90+ R-squared on that.
The longer the realists like Marc are wrong, just means the worse it will be when it happens.
sure-the Global economy is really booming.
See above.
Marc lost his touch years ago.
Funny, if you call him out on being wrong on his ongoing bearishness he bristles and says "show me where I ever said to short stocks!"
really, Marc? Your predictions of 30% crashes would not lead one to believe that a short position would be your advice?...
he likes to hedge alright..his words.
No wonder there's a shortage of clowns.
The difference between this long running bull market and the previous ones is there was some actual substance besides hopium behind them. For example, the runup to the dot.com bubble crash in 2000 had tremendous investment in internet technology and, I think more importantly the paradigm shift of U.S. manufacturing to China. (and the profits U.S. companies were enjoying via the labor arbitrage, lack of regulation, new customers, etc.)
This bull market is backed purely by confidence in central bank intervention without any underlying premise other than recovery to the good ole days.
Its not even a Market anymore... Its all Bullshit all the time, and it all "depends on what your definition of is, is".
Supply and demand it is not. Free market?.... not even close.
Oh well, "it is what it is." We can just make shit up as we go along like the definition of what, "it" is. We being U.S. gov.
Quick, buy all the gold before the major banks do! Wait a sec...
But I've had more gold in my possession each year since the '90s. How can that be?
Bullish!
nonsense. Great time to buy Big Pharma, and Big Health Insurance... and Big Oil... and weapons manufacturers... and probaly crop futures....
And companies that make geiger counters and iodine capsules and hollow point bullets... all safe bets.
It's really just following the misallocations...the warmongering and the police state. If you don't think the growth of these are certainties - I wish I had your optimism and breathtaking ignorance.
I'd be willing to bet, a considerable sum, that Mr. Faber isn't quite practicing what he is preaching.
A considerable sum to you may not be so to others. Something to keep in mind while on your soapbox...
How is that a "soapbox," and how does the second statement at all follow from the first?
You talk like a hedge fund twat. In other words, a fuckin' monkey with a dartboard who only remembers when he was accidentally right.
Great time to buy Big Pharma, and Big Health Insurance... and Big Oil... and weapons manufacturers... and proba{b}ly crop futures....
Why don't you just keep that in mind, Sparky, and we'll simply see who is right in 3, 6, 12 months.
Yes crop futures.
Big Oil, Big Pharma, Big Insurance = Big Bust just like "The Market" , when the shite hits the fan.
"All Safe Bets"... Never
Okay, you're certainly entitled to that position, and it is not, on its face, unreasonable. But we'll just see who is right within the next, say, 6 months. I'll qualifty a bit and note that certain insurance and pharma corps are extremely solid, it's certainly not across the board where oil and gas are more boradly safe.
In the case of the first two I mentioned - bigger is better, and the NE United States is likely best.
As for the other, they do some fine work down under, in addition to Texas.
Of course, gold, silver and lead are also attractive. Especially in the longer term.
I am a big fan of Marc. But with bank runs in Thailand, Asia about to go on a major war footing...the rest of the EM markets are in trouble, refer to South America inflation/crony/bond madness. Why would anyone buy EMs?
His (Faber's), last year, call on 'no safe havens' is more on the money than not.
Because there is blood in the streets.
Is anybody shorting the market here? If I was still in the market I'd be moving chips in that direction. Only thing that would stick save it would be untaper and more QE, which is probably likely later this year.
Shorting the market? Before shorting this market, take a long hard look at your counterparty.
Hey, wait a minute, that is more than 18k gold necklace she has on is it not?
Untaper may not be effective. Strategy now seems to be forestall untaper and rely on the panic rush out of EM securities to prop up USTs. A true race to the bottom.
It sounds like a pile of Bull to me.
Butt, nobody wants to left holding the Bag, while at the same time I don't think the US has reached Peak Bull yet.
More like its almost too late to sell.
Its not too late to buy nat gas apparently; I thought I was a genius waiting to sell it at 5.60.
Fuck it, should be a good hedge against my some of my short e-minis....
I am sure Goldman has a hand in this.
Damn bastards.
This market has far exceeded the upside expectations of many bulls while the economy has languished and in many respects failed to regain all the ground lost since 2007. The article below delves into the question of whether we are reaching the turning point. Let us ice this cake of "difficulties" with a mix of troubles brewing throughout the world and the drumbeat of war in many places.
Currency games, the carry trade, and money rapidly flowing across borders coupled with computer trading has distorted the markets. Forget all the hocus-pocus from the media and clowns about what historically is the best and worst months for the market or how well the market does when a certain team or party wins this or that.
http://brucewilds.blogspot.com/2013/09/the-turning-point.html
This time it's different. The market is going up forever. Buy the dips, buy the peaks, buy on good news, buy on bad news. Remortgage your house and buy stocks. They're never going down again. God bless Uncle Ben and Auntie Janet!
lol!
Seems like it might be a good time to buy a short ETF of S&P, maybe 2X short. What do you think?