Seeking Alpha

The silver (or gold) lining in Marc Faber's gloomy prediction

  • Marc Faber is calling for a 20% decline in stocks by year's end. Of course this is really more a reminder that he hasn't given up on his perpetually gloomy outlook amidst a historic rally than it is an actual prediction about the direction of the market. Faber is bullish on some equities however.
  • "I think there's one group of stocks that should appeal to people who say 'I want to buy low and sell high,' and this is the gold mining sector," Faber says.
  • The miners have performed horribly this year, but if you believe in Warren Buffett's "buy when others are fearful" theory, now might be a good time to look at the group.
  • Related ETFs (which, by the way, were among the week's winners): GDX GDXJ
From other sites
Comments (18)
  • GaltMachine
    , contributor
    Comments (1309) | Send Message
     
    Don't care one way or another but for the record according to PunditTracker.com this is his record:

     

    http://bit.ly/139faaP

     

    Tracked Since: January 2002
    Calls Graded:
    207
    Correct Calls:
    149
    Hit Rate:
    72%
    Yield:
    $1.22

     

    Pundits matching 'faber'
    Pundits Grade
    Marc Faber A+
    Predictions matching 'faber'
    10 Aug 2013, 12:37 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1189) | Send Message
     
    I do not trust this site because it does not actually list what his supposedly correct and wrong calls were. For the past year or so ALL of his calls have been wrong.
    10 Aug 2013, 03:13 PM Reply Like
  • GaltMachine
    , contributor
    Comments (1309) | Send Message
     
    Trust has nothing to do with this.

     

    " For the past year or so ALL of his calls have been wrong"

     

    That is not a correct statement.

     

    Again just put "Faber" in the search box and it gives you a list of every one of his 207 calls that they have graded starting in Jan 2002.

     

    It is said sometimes that truth is stranger than fiction and this appears to be one of those times.

     

    He is a market timer which means he trades differently than buy and holders so his pronouncements usually reflect that.

     

    This is another perfect example of how "what is said about someone" differs from what they have actually said.
    11 Aug 2013, 11:00 AM Reply Like
  • Alpha Hungry
    , contributor
    Comments (92) | Send Message
     
    Perpetually calling for a decline in stocks doesn't make you correct when it ultimately happens. Listen to Faber at your peril.
    10 Aug 2013, 01:21 PM Reply Like
  • Bret Kenwell
    , contributor
    Comments (508) | Send Message
     
    Yeah. About as spot on as Ackman this year.

     

    "Umm....stocks are gonna crash"

     

    (6 years later)

     

    "See!? Told ya so!"

     

    By the way, I believe this was from the "Fast Money" segment on CNBC on Friday. Faber didn't call a 20% correction a 'crash' but rather, a 90% fall.

     

    Yep, 90% folks.

     

    I'll be buying the S&P 500 at 170 then I guess, as no one will ever retire.
    10 Aug 2013, 01:30 PM Reply Like
  • EMS
    , contributor
    Comments (582) | Send Message
     
    You'll have no money left to buy at S&P 170. You and all the dip buyers will be broke by then.
    10 Aug 2013, 01:41 PM Reply Like
  • drew111
    , contributor
    Comments (486) | Send Message
     
    Those "predictions" were individual equity/asset calls, not market predictions. Personally don't like his opinion or him for that matter. However, he appears to make some pretty good short/medium term calls on stocks/equities/forex. In other words, if you must listen, listen to those examples, not his market calls.
    10 Aug 2013, 01:47 PM Reply Like
  • GaltMachine
    , contributor
    Comments (1309) | Send Message
     
    drew,

     

    Exactly. What is "said" about someone is not necessarily the same as what they have actually said.

     

    Strangely enough he is often very bullish on equities but he attempts to market time which is a totally different animal than investing.
    10 Aug 2013, 02:30 PM Reply Like
  • jakoba
    , contributor
    Comments (345) | Send Message
     
    He has been wrong, but overall I think more right than most people. See:

     

    http://bit.ly/1bkMTOJ

     

    http://bit.ly/1bkMU4Z
    10 Aug 2013, 02:00 PM Reply Like
  • evan.prospect
    , contributor
    Comments (700) | Send Message
     
    I've been similar to Faber, waiting for at least a 15% market drop if not 25%. I've been selling into strength since May of last year and to rebalance my portfolio / raise cash. I've slept better, raised cash for starting my own business, and am still keeping powder dry for the next 6 months.

     

    It will be interesting to see what happens when the Fed is no longer buying 75% to 90% of all USTs the Treasury issues (and same for MBS). That's when we're likely to get that big leg down.
    10 Aug 2013, 02:44 PM Reply Like
  • alpine
    , contributor
    Comments (1400) | Send Message
     
    Mr. Faber has earned his stripes over the years as a stockmarket guru. He was, for example, by far the best stockpicker on the Barrons' Roundtable for many years in a row, oftentimes twice a year. He is no doubt not everyone's cup of tea, and given the market's performance since Mar 2009, everyone has the right to ask "why should the party end so suddenly with a 20% decline?".
    10 Aug 2013, 03:07 PM Reply Like
  • Philip Marlowe
    , contributor
    Comments (1189) | Send Message
     
    That Buffet quote is always used to convince people to buy down assets. However, one should keep in mind Buffet does not buy everything and anything that happens to be cheap. He values things very carefully and only buys things that are cheap but will provide future cashflow that is sufficient to justify the purchase price.

     

    Also there is another Buffet quote about him having no interest in investing in gold.

     

    As far as Mark Faber goes, here is an year old article of him explaining how gold bottomed out in the $1600s.

     

    http://read.bi/1cUpG7M
    10 Aug 2013, 03:22 PM Reply Like
  • jakoba
    , contributor
    Comments (345) | Send Message
     
    Mr Faber stock picks from 2005-2012, the period he was a member of the BarronĀ“s roundtable, would have given a cumulative return of over 300%. BRK had 50% return during the same period.

     

    While Mr Faber has not been very correct this year, he has also mentioned multiple times that if there was no correction earlier this year, then a more serious (1987-type) correction could happen later, like end of the summer.

     

    Given that almost half of the DOW 30 companies now have posted negative revenue growth (y/y), and yet the S&P 500 is up 19% YTD, perhaps some caution should be made. The two best performing years for the S&P past decade was 2003 with 26% and 2009 with 24%. But in both cases this was after a very poor year (2002 -23% and 2008 - 38%).
    11 Aug 2013, 05:38 AM Reply Like
  • sethmcs
    , contributor
    Comments (3410) | Send Message
     
    Mark Faber should apply for the position replacing Boris Karloff. He sure is a scary dude.
    10 Aug 2013, 04:47 PM Reply Like
  • Jason Burack
    , contributor
    Comments (1824) | Send Message
     
    Faber is still 25% in stocks last time I heard. People call him a perma bear but he hedges his market predictions by being diversified. His ideal asset allocation for his own money and what he thinks is ideal for others is: 25% stocks, 25% real estate, 25% bonds and 25% gold.
    10 Aug 2013, 08:41 PM Reply Like
  • Jason Burack
    , contributor
    Comments (1824) | Send Message
     
    Gold and Silver will eventually have another move a lot higher. Not sure when the move will occur. I don't think any expert does. I speak with many of them. Not all miners will go bust. The ones who survive this long shakeout will do superbly.
    10 Aug 2013, 08:43 PM Reply Like
  • Tactical Technician
    , contributor
    Comments (146) | Send Message
     
    Faber has his best interests in mind . . . he hasn't helped a solitary soul from an investment perspective since 2009.
    10 Aug 2013, 10:12 PM Reply Like
  • Agbug
    , contributor
    Comments (1147) | Send Message
     
    For those looking for potentially undervalued miners, the BMW list has a nice assortment. Potentially overvalued are listed as well.

     

    http://bit.ly/19a0A2D
    11 Aug 2013, 11:50 AM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs