Marc Faber explains where to invest but not for the next 10 days

Posted on 25 July 2012 with 2 comments from readers

With the eurozone sovereign debt crisis coming to a head the man voted the fifth wisest investor in the world by a Bloomberg poll was advising caution over any investment in the next 10 days when he addressed the Agora Financial conference in Vancouver this morning.

Dr Marc Faber,

Marc Faber is a Swiss investor based in Thailand. He is a market pessimist and the publisher of Gloom boom and doom report on global market outlook. He is the director of Marc Faber Ltd, an investment advisor, and funds management company. He was born in Zurich and earned his Ph.D. from Zurich University. Read Bitcoin Code review to know more about him.

said he favored equities over bonds for the long term after that and if forced to choose a 10-year investment would prefer equities, preferably in Asia. He remains as bullish as ever on gold that he promises never to sell.

Golden asset

‘Talk of a gold bubble is nonsense’, he said. ‘There is no sign of the price surge you saw with the Nasdaq bubble or oil stocks in the late 70s, or the jump in the gold price from $380 an ounce to $800 between November 1979 and February 1980.’

For US citizens Dr Faber thinks housing is a great buy as a distressed asset in places like California, Nevada, Atlanta and Pheonix, noting that one of his friends in the business says rents are up nine per cent nationwide.

He noted: ‘Basically there are two strategies: you can be an aggressive trader and try to switch at the right times between asset classes or go for diversification. I prefer diversification because I don’t feel confident about getting the trading right.’

Dr Faber is also uncomfortable about sitting on large amounts of cash because inflation will erode its real value over time and he does not accept protestations that there is no inflation in the system.

Fiscal cliff

He is also very confident that the US will continue to print money undermining the dollar and said the US ‘fiscal cliff’ – with taxes set to rise and spending fall at the end of the year – might turn out to be an endless Grand Canyon, though he doubted politicians had the will to make it happen.

‘The Middle East will go up in flames with a military confrontation and the oil price will go higher,’ he forecast, though with several countries already in a virtual state of civil war that is an easy prediction. The scale and contagion are far harder to predict.

In short a holding statement from the giant of the contrarian analysts and a reluctance to commit to anything while financial markets remain so vulnerable to a eurozone meltdown scenario.