Marc Faber : In a free market
economy, you will always have price fluctuations. The Federal Reserve
today artificially manipulates asset prices up. It’s a huge mistake but
that’s what they do. To answer your question specifically, we had a bear
market that ended March 6th, 2009, at S&P 666. We are now over
1800, up almost three times. Over the last two years, most equity
markets around the world, emerging market stock markets have been down
or moving sideways, they’re no longer following on the upside. In the
U.S., an increasing number of shares are breaking down.
We had extremely optimistic sentiment
just before Christmas. We had very heavy insider selling and we have
high valuations and extremely high corporate profits by historical
standards if you look at margins and so forth.
So my view is in a month’s time, the
bull market will be five years old. This is the second longest bull
market in the last 100 years. I wouldn’t buy shares here. I’m not
interested.
Now can the market go up another 20
percent? I wasn’t interested to buy the NASDAQ in late 1999, but between
January 2000 to March 2000, the NASDAQ went up another 30%. Afterwards
people were crying when they realized their losses.
So I think yeah, the markets go up and
down. I think that the upside potential now is very limited and there is
considerable downside risk, considerable. Probably more downside risk
than investors realize. - in bullmarketthinking Click here to watch the full interview
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.
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