Marc Faber Warns of Dangerous Valuations and Crash Ahead

By on May 3, 2014

Marc Faber Boom Doom and GloomBoom, Doom and Gloom Report publisher Marc Faber was interviewed on CNBC this week and warned of dangerous equity valuations, particularly in social media and biotech stocks. Faber noted the momentum stocks are no bargain despite many of them being down 30-50%.

Faber said there has been a big break in overvalued stocks, but there has yet to be a break in the overall market; which he sees in the second half.

Faber indicated there has been an accumulation of mining companies over the past several months.

Faber pointed out that emerging markets have “grossly underperformed” the U. S. market.

Faber said it was too late to buy U. S. equities and mentioned Jeremy Grantham’s view that the return on U. S. stocks will be negative over the next seven years.

Faber said investors should realize when equities are low such as in 1982 and Treasuries are yielding 15%, then the expected returns are high. As opposed to today where Treasuries yield 2.7% and bonds worldwide have rallied, Faber explained.

Faber concluded that individual investors have excessive expectations about future performance.

Back in October 2013, Faber warned of a colossal worldwide bubble in asset prices [link].

2 Comments

  1. Elmer T. Lee

    May 5, 2014 at 1:20 am

    I would rather hear about Faber’s exploits with prostitutes in Thailand than his latest doom and gloom report.

  2. Richard Rasch

    May 20, 2014 at 4:52 pm

    “I go to Thailand, buy four beers for me and eight for the girls, and it only costs $40,” he marvels, leaning back in an office cluttered with communist kitsch. “I go to Wanchai and it costs me $40 to buy one girl a drink! This place is just too expensive.”

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