Marc Faber recommends precious metals for the average investor

In an interview with ET Now Dr Marc Faber advises the average investor to go for physical gold and silver :" For the typical investor, I would look at precious metals. They are now correcting on the downside, but I do not think there is a huge downside risk. I would recommend investors to gradually accumulate precious metals." he said , and when asked which one of the precious metals he prefers gold or silver he answered " They move in the same direction, and silver is more volatile. Each individual has to decide himself what he prefers - a more volatile commodity or a more steady commodity. I prefer gold for a variety of reasons, but I can see that may be silver will outperform gold in a bull market."

Marc Faber : Precious Metals are still Cheap

Marc Faber : “Some pundits will argue that precious metals are expensive, but this isn’t my view. Why would anyone not own some gold, rather than US dollars, when interest rates are near zero? Dollars can and will be printed en masse, whereas the supply of precious metals is extremely limited.”


Dr Marc Faber author of the Gloom Boom and Doom is an international investor well known for his contrarian investment approach. He is also associated with a variety of funds including the Iconoclastic International Fund, The Overlook Partners’ Fund, The Income Partners Global Strategy Fund, The India Capital Fund, Matterhorn Ventures, Winstar India Investment Company Limited, The China Mantou Fund, Sofaer Capital Inc, Peach Office Products, Ivanhoe Mines Limited, Equity Partners Limited and Muse Global Partners LP

Marc Faber : I consider precious metals money

Marc Faber : "...An investor has the choice to invest in real estate, in equities, in bonds, in commodities, and I separate precious metals from commodities, from industrial and agricultural commodities, because I consider it money. Also we can buy art, and stamps,and other collectibles.I have a large subscriber base for my Gloom, Boom and Doom Report , and I asked each one of them to let me know if they have the impression that the cost of living increases,in other words, the percentage of how much they pay every year, more, for their families,is less than 5%. So far I have not received a single email, so I think inflation is around 5%. The return on deposits is essentially zero. And then people begin to worry, because paper money is no longer a store of value, and at the same time, it is a bad unit of accounts, because it is debased by the central bank.So people buy paintings, they buy real estate, they buy stocks, they buy, to some extent,bonds – last year, we had large inflows into bond funds– and they buy precious metals.The problem with all these easy monetary policies and artificially low interest rates, is that not everything goes up at the same time. In other words, we had a bubble in the NASDAQ in 1997 to March 2000, then the bubble burst. Then we had a real estate bubble 2000-2006. Then in September 2007 and July 2008, oil went from $78 to $147and the CRB went ballistic, so we had a commodities problem. In 2008 everything collapsed. Oil, in an unprecedented move, went, in July 2008, from $147 to a low of $32in December 2008. In other words, in six months, oil fell from $147 to $32 a barrel.These kinds of moves are brought about by the Federal Reserve monetary policies, and for the investor, there is no point to be overly dogmatic. From 1999 to 2007 and 2008,gold outperformed equities by a huge margin. Also, silver outperformed equities by a huge margin. In 2009, equities outperformed gold, and from here onward, it is going to be the same pattern. There will be suddenly other assets that appreciate, and some assets go down.I happen to think that some prices will go down, but they have become oversold on a year-term basis, because over the last three months, the whole world became overly enthusiastic with the inflation phase, so the thinking was, government bonds are bad, and equities are good. That may reverse for a little while, but I think long-term if you look at ten years, one of the worst investments will be long-term U.S. government bonds."

This was an extract of the long interview that Dr. Marc Faber did with McAlvany on 23 February 2011 , below is the full interview :

Marc Faber : Precious Metals will be higher than they are today In three years ,

Marc Faber : "...In three years or 10 years time, precious metals will be higher than they are today. But we may have a correction coming in the next, say, three months. But in general, when I look at the risk and the reward, it is very likely that precious metals will continue to perform reasonably well. But if S&P drops to around 950, then the Fed will again massively ease and print money. So the surprise could actually be that in nominal terms, equity markets actually go up. They may not go up in gold terms, but they may go up quite strongly in nominal terms. So I would not be overly bearish about equities...."
in www.economictimes.indiatimes.com

Marc Faber identifies The golden trade for the next 3 years

Marc Faber :" ....In three years or 10 years time, precious metals will be higher than they are today. But we may have a correction coming in the next, say, three months. But in general, when I look at the risk and the reward, it is very likely that precious metals will continue to perform reasonably well. But if S&P drops to around 950, then the Fed will again massively ease and print money. So the surprise could actually be that in nominal terms, equity markets actually go up. They may not go up in gold terms, but they may go up quite strongly in nominal terms. So I would not be overly bearish about equities. "
in www.economictimes.indiatimes.com

Marc Faber : precious metals will continue to perform reasonably well over the next years

Marc Faber :"...I have cash and because I am in the investment business, I benefit when markets go up. So my asset allocation into equities does not have to be as high as, say, somebody else’s is.

If I put a gun to your head and if I tell you, ‘Marc, lock a trade for next three years, only one trade, long/short you take your pick but only one trade,’ which will you open and keep it open for next three years? Identify that golden trade for us.

In three years or 10 years time, precious metals will be higher than they are today. But we may have a correction coming in the next, say, three months. But in general, when I look at the risk and the reward, it is very likely that precious metals will continue to perform reasonably well. But if S&P drops to around 950, then the Fed will again massively ease and print money. So the surprise could actually be that in nominal terms, equity markets actually go up. They may not go up in gold terms, but they may go up quite strongly in nominal terms. So I would not be overly bearish about equities. ..."
in www.economictimes.indiatimes.com

Marc Faber on Silver Gold precious Metals and China

Marc Faber on CNBC Squawk Box 21 April 2010

Marc Faber : well I have maintained the same view regarding Gold and other precious metals for essentially the last ten years and this is to gradually accumulate physical gold and silver and if you want to have a riskier exposure to buy some gold exploration companies from time to time when they become cheap as a year ago , or some of them are still reasonably good value at the present time ...so this is say a long term strategy because in an environment where government will print money , and I am convinced they're going to bail out Greece which means you transfer essentially bad assets onto the balance sheets of the government and when that happens the purchasing power of paper money goes down , it is not that precious metals go up , it is the paper money that goes down relative to precious metals so in that environment I think you and also Bernie should all accumulate some gold , I told Bernie since gold was at $300 the day the Swiss national bank sold gold I said to Bernie now you should buy it because that was a buy signal ..

Marc Faber : That's true I do not trust anyone and I do not even trust myself a hundred percent , so here you have it ..how you can trust yourself , we are all humans we make mistakes ...
regarding China Marc Faber says : well I want to tell exactly what I think about China and also about the world , I think the growth such as we have at the present time in China is completely unsustainable in the long run , now can they sustain it for another half a year , can the property price increase go on for while ? yes ...I thought that Japan was overvalued in 1988 and it took another two years until it collapsed , i thought the NASDAQ bubble was very mature already in a998 it took until march 2000 until it broke down , but the longer you postpone crisis and this is what I object to the current government intervention i so called solving the crisis , they have not solved anything they just postponed it , and the ultimate Armageddon will be much worse than had they taken the recession already ..in 98 when LTCN went bust instead of bailing it out they should have lt it go bust that we should have given the signal to the market that the government and its agent the federal reserve does not bail out institutions all the time , in year 2000 we could have taken a minor recession it would not have been a disaster , but in year 2008 it was much worse and next time around the government will go bust and we will be all doomed because before they'll go bust they'll print money and they'll go to war ...



Dr Marc Faber was born in Zurich, Switzerland. He went to school in Geneva and Zurich and finished high school with the Matura. He studied Economics at the University of Zurich and, at the age of 24, obtained a PhD in Economics magna cum laude.
Between 1970 and 1978, Dr Faber worked for White Weld & Company Limited in New York, Zurich and Hong Kong.
Since 1973, he has lived in Hong Kong. From 1978 to February 1990, he was the Managing Director of Drexel Burnham Lambert (HK) Ltd. In June 1990, he set up his own business, MARC FABER LIMITED which acts as an investment advisor and fund manager.
Dr Faber publishes a widely read monthly investment newsletter "The Gloom Boom & Doom Report" report which highlights unusual investment opportunities, and is the author of several books including “ TOMORROW'S GOLD – Asia's Age of Discovery” which was first published in 2002 and highlights future investment opportunities around the world. “ TOMORROW'S GOLD ” was for several weeks on Amazon's best seller list and is being translated into Japanese, Chinese, Korean, Thai and German. Dr. Faber is also a regular contributor to several leading financial publications around the world.
Dr. Marc Faber also known as Dr Doom is an investment adviser, investment analyst and fund manager author and publisher of the Gloom Boom & Doom Report ,and the author of "Tomorrows Gold" . Dr Faber is known for his contrarian investment approach. Dr Marc Faber is associated with a variety of funds and is a member of the Board of Directors of numerous companies.
In 1987 he warned his clients to cash out before Black Monday on Wall Street. He made them handsome profits by forecasting the burst in the Japanese Bubble in 1990. He correctly predicted the collapse in US gaming stocks in 1993; and he foresaw the Asia-Pacific financial crisis of 1997/98 and the resulting global volatility. Dr Doom motto is "Follow the course opposite to custom and you will almost be right"
Mr. Faber is also the author of several books, including Tomorrow’s Gold – Asia’s Age of Discovery, and is a director of Ivanhoe Mines Ltd. , a mining firm focused on the Asia Pacific region. He is also an adviser to a number of private investment funds.