Marc Faber : I like both IT and Pharma

ET Now: Good to hear that. Finally you are turning bullish on Indian stocks. Since you do not track individual stocks and companies, I am going to ask you a very broad top-down question. Broadly Indian stock markets have got two legs -- the domestic leg and the export leg. The export leg is mounting on two industries - IT and pharma. The domestic leg is a function of infrastructure and consumption. So which leg do you think is looking stronger and better?

Marc Faber : As it happens, to some extent, I like both sectors because I think in India productivity can be improved a lot and that the export sector - IT and pharma, has a great longer term potential. Talking about valuations, some maybe stretched. Domestic consumption is very important but some consumer related stocks in India became overpriced like NestleBSE -1.30 % was selling at over 50 times earnings last year. Now it has come down somewhat. I believe this and this applies to other countries as well. I was recently at the ETF conference. It was in Miami and it is all now indexed market where stock selection and sector selection has become very important. I believe smaller funds will have a better potential to actually outperform the huge ones that are managing $100 billion or $500 billion.

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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.