Marc Faber, Swiss economist, forecaster, renowned investor and the original Dr. Doom, may need a new nickname.
In an interview on CNBC’s “Trading Nation,” the Gloom, Boom & Doom Report editor revealed he may not be as bearish as some may think and that he is actually a “great optimist.”
“I always tell people, ‘I am a great optimist … because one of the most dangerous things to do is to drive motorcycles in Thailand and I have five motorcycles.”
The blunt-spoken, truth-telling Faber may have helped people understand that one may be worried about the economic outlook and bearish on stocks and other markets and yet be an optimist about life and all the wonderful things it has to offer and on the human spirit and our capacity to overcome even the worst financial and economic crashes. Swords Into Plowshares... Best Price: $4.00 Buy New $15.99 (as of 11:36 EST - Details)
On the risks of being a perma bull, he warned:
“You can’t be always sitting there and saying ‘Stocks always go up, real estate always goes up’ and so forth and so on”.
“You could have zero interest rates and stocks go down – as they’ve done in Japan until three years ago. Even at these very low interest rates, something can happen and dampen the enthusiasm for equities.”
Scarlet Letters: The E... Best Price: $3.00 Buy New $9.84 (as of 08:10 EST - Details) Faber admits that he is bearish on the global economy. “I’m most gloomy about the prospects of the global economy, but it doesn’t mean that markets will go down,” he told CNBC. But on the other hand, he says “you have the mad professors at central banks around the world who think that because of a weakening economy they have to do more [quantitative easing].”
On a more positive note, Faber says he is most optimistic about the Indochinese region, which he likens to Los Angeles.
“Provided there is peace and not tensions that explode, I think the region of Indochina is right now like Newport Beach and Huntington Beach and Manhattan Beach, where I’m at right now,” he told CNBC. “It’s a boom region, Indochina. It includes Vietnam, Cambodia, Laos, Thailand – which is not booming right now – Myanmar, Malaysia, Singapore.” How an Economy Grows a... Best Price: $1.99 Buy New $7.20 (as of 11:05 EST - Details)
According to Faber, this region could “easily” grow at 6%-8% per annum for the next 10 years as long as there is peace.
“Cambodian exports were up 20% this year,” he added. “Vietnamese exports are up approximately 10% this year. So relative to the rest of the world, this is a boom region.”
Faber said he would invest in both this region’s stock and real estate markets. Faber believes that U.S. equities are fully priced. And while he says it’s possible that indexes could make a new high, he thinks that the Economics in One Lesso... Best Price: $2.43 Buy New $7.43 (as of 12:35 EST - Details) majority of shares would not.
When asked if he’d bought any U.S. stocks recently, Faber said he’s done very little.
“The only thing I’ve really done recently is I added to my gold position about two months ago, and I bought some gold-related equities.” “But other than that, I’ve done very little because I believe that in this extreme volatility where markets suddenly drop 10%, individual stocks drop 10% or 20% in one day – it’s a very difficult environment to make a lot of money unless you take huge risks.”
The shrewd investment adviser is staunch advocate of owning physical gold bullion which he describes as being a way to become “your own central bank.”
He believes an allocation to bullion is vital financial insurance and that the biggest question is where to store your gold? He believes that Singapore is the safest place to own gold in the world today.
Reprinted with permission from GoldCore.