Monday, September 15, 2008 0 comments ++[ CLICK TO COMMENT ]++

Time For a Superbear: Marc Faber

I guess it's not surprising that Bloomberg is giving some airtime to a superbear like Marc Faber. Check out his video interview here (click link on top-right of window). Nothing really new from him (especially given that I linked to an interview just 2 weeks ago I believe) except for his view that the market may rally between October to spring due to seasonal factors.

My quick summary of his comments are below:

  • Ever the extremist, thinks that the bankruptcy of Lehman may be good for the economy... nothing new for Marc Faber followers but he is an extremist who doesn't like the financial industry. He thinks that they have grown too big relative to the so-called real economy and it's good to see it shrink.
  • Sees potential for a rally between middle of October to spring of next year. This is the time of the year market typically bottoms and is seasonally strong between October and early spring... but thinks new all-time highs are out of the question
  • Thinks Lehman's problems are a symptom of excessive credit growth... not a big fan of Greenspan or Bernanke
  • AIG may be a bigger problem than Lehman
  • Thinks the world will be in a recession in an year (2009)... as he has repeatedly before, earnings estimates will come down and this means S&P 500 is not as cheap as it seems
  • Thinks problems started with the FedRes in the early 80's and last decade, not regulating derivatives, among other things. This is totally hypocritical of him to say because I have never seen him endorse regulation. I'll bet if the FedRes regulated the markets more, he would criticize them for intervening in the free market. This sounds so much like the laissez-faire free-market proponents, like Alan Greenspan, who stood aside not regulating anything and now are starting to suggest greater regulation is needed.

As usual, Marc Faber is often wrong on some issues. However, he is one of the most influential investors for me because he is the ultimate contrarian and states his strong opinions and positions...


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