In these crazy times for the market, I’m turning my attention to the few prognosticators that have nailed the story so far.
Marc Faber has certainly had some impressive calls recently. On July 10th, he predicted that deflation will rule the day in the short term. And as far back as March 29th, he voiced concern that massive deleveraging could drive down asset prices across the board.
I’ve posted the latest video of Marc Faber on CNBC yesterday (October 14, 2008). Faber currently believes:
- Downside to the US dollar is limited from this point
- Resource related currencies (Australian dollar, New Zealand dollar) both have room to move up from here, but he believes we have seen their highs
- Does not like gold exploration stocks – because exploration is difficult, and because they rely heavily on outside capital
- Prefers physical gold
- Likes commodities in the long run
- Says the best thing to do right now is to “take a holiday”
- Be careful about getting suckered into stock market rallies – in late 1929, the market bottomed out and rallied 50% going into the summer of 1930…only to collapse another 90% from there!