Marc Faber was Jim Puplava’s guest on the Financial Sense Newshour this weekend. You can listen to Faber’s interview here. Some quick notes:
Faber on Leverage
- He advises against the use of leverage for most investors, because a small move against you can wipe you out entirely
- While he believes the gold bull market probably has farther to run, he is leery in the short term, and advises against leveraged positions for these reasons
Faber on Bonds
- Even if we see widespread deflation, he’s not convinced that bonds will rally past their previous 2008 highs, due to the huge fiscal deficits out there
- He’s also leery of them because we’ve already seen a 27-year bull market in bonds (1981-2008)
Faber on Stocks
- He thinks the stock market may have topped in April, but he still sees the March 2009 lows as staying intact, thanks to money printing by the Fed, which he believes will prop up the equity markets
Faber on Obama
- He describes Obama as a “complete disaster” and sees his increased regulations (like healthcare) as being disastrous for small business, and hence the US economy, which is primarily driven by small business
Finally in terms of his investment recommendations – he’s of course extremely bearish (they don’t call him Dr. Doom for nothing). But since he sees inflation on the horizon, he says you probably want to own some real estate, some gold, some equities, and some cash. But not bonds.
In wrapping up, he also has a great line, where he says he doesn’t see anyone on the list of richest people in the world who gained their wealth solely by investing in bonds.
Faber is a classic contrarian investor. If you like his insights, you’d probably enjoy our daily newsletter, The Contrary Investing Report.