Marc Faber: February is Traditionally a Weak Seasonal Month

By on February 11, 2012

Marc Faber - Gloom Boom and Doom ReportMarc Faber, editor of the Gloom, Boom and Doom Report, was interviewed on Fox Business yesterday. Faber said the market’s negative reaction to Greece was a symptom of a wider problem of over-indebted governments in the western world and Japan. He indicated the Greek crisis is just a small play, or appetizer, to much larger problems and a much larger crisis.

Faber explained yesterday’s market weakness to its rise of nearly 25% from the S&P 500’s low of 1,074 on October 4, 2011, indicating it is currently very overbought. He added that any excuse for profit taking is now being taken.

Faber said February is traditionally a seasonally weak month so we’ll go down first for awhile. When asked with the market down triple digits whether he would go in and buy some bargains, Faber said he would wait a little bit because some sectors have had huge gains. He gave the example of the home builders, who in some cases are up 100% from the lows and banks that are up 60-70% from the December lows.

Faber said we don’t know, but the correction could be 100-200 points on the S&P.

Faber stated he wouldn’t sell stock he bought in November and December because they are high-dividend paying shares in Asia; specifically REITS in Singapore and real estate related companies in Thailand which suffered during the flooding.

Faber pointed out the emerging markets have done best since January with India up 14%, which along with a strengthening currency, has led to the market being up almost 20%. He added that all these markets have become overbought near-term.

Faber believes developed markets could see annual returns of 3 percent. He doesn’t like the prospects for U. S. long-term Treasuries.

The interview continued with Faber humorously elaborating on why and where he likes residential real estate in the U. S., and his view on China, Brazil and the Australian dollar.

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