Marc Faber July 2013 Market Commentary

Marc Faber has just published the July 2013 edition of his monthly market commentary (MMC) entitled "Only Losses can teach us about the Value of Assets" on gloomboomdoom.com.


He explains that American economists has viewed consumption as the motor of economic growth since the early 20th century. This led to what he called the Affluenza, an All-Consuming Epidemic, accompanied by an unprecedented array of escalating imbalances:

• ever-declining personal savings
• a large fiscal and current account deficit
• exploding government and consumer debts
• a protracted shortfall in business fixed investment, employment and available real incomes.

The current fashionable move in the markets is to sell emerging markets and buy the US, and this investing philosophy is likely to disappoint even if the US stock market continues to outperform.

He stresses that the sell-off in late May/June has been extremely benign by historical standards and that far more downside volatility is likely to occur in the months ahead.


Marc Faber concludes with some wise words by Roy D. Chapin:

Be ready when opportunity comes...Luck is the time when preparation and opportunity meet.

There isn't any attachment to this month commentary.

Marc Faber June 2013 Market Commentary

Marc Faber has just released the June 2013 monthly market commentary (MMC) entitled "The Hidden Dangers of Political Correctness" on gloomboomdoom.com.

Marc Faber first explains "Political Correctness" (PC), which has become the outcome of a distinctive 'turn' in Leftist politics. There's a list of things one must think or say together by the elites, and goes against the right of the individual to establish his or her own beliefs. He goes as far as to say PC "is indeed a purely totalitarian concept, and it asserts the fight of those in power to suppress all but the party line's official lies."

Moving on to deal with to asset markets, Mr Faber explains bond yields have been rising all around the world, and this may negatively affect equities. Based on that fact and several technical indicators, he believes there's significant downside right for stock markets worldwide, and at least it's much more risky than perceived by the crowd of investors.

Marc Faber also mentions one investment he's done recently: gold stocks, as Gold and Silver mining stocks have the potential to rebound by between 30% and 40% following the dramatic slump experience in the last few months.

There's one attachment to this MMC:

• "The Importance of Being Diligent" by Shinya Deguch, working for Star Magnolia Capital, which provide details about fraud at Bayou Management.
  The report is also available on Slideshare.

If you want to access the full Monthly Market Commentary (MMC) by Marc Faber, it is available for 300 USD per year.  

Marc Faber May 2013 Market Commentary

Marc Faber has just published the latest monthly market commentary on Gloom Boom Doom website. The May 2013 report is entitled "I find it difficult to write and not to be misunderstood".

Here's the summary:

First, I am discussing capital flows and the general belief among some economists that trade and current account deficits do not matter because the money flows back in the form of investments in equities, bonds, real estate, direct investments, and corporate takeovers.
According to Barron’s Big Money Survey, “74% of large portfolio managers are bullish about stocks, which is the Highest Level Ever.” Time to be a contrarian?
I am reluctantly maintaining an approximately 25% weighting in equities (mostly in Asia and in Europe) and I have not yet shorted any stocks because I have learnt that a bubble can get bigger still and exceed my expectations - before it implodes violently.
I want to make clear that I own equities not because of the belief that they are inexpensive and that they will move up substantially but because I do not trust the banking system and, therefore, I do not wish to be overexposed to bank deposits.
Finally, has gold completed its correction and are we entering another major advance as the gold bugs tell us, or are we at the beginning of a major gold bear market as the bears want us to believe?
I am enclosing a report by my friend Michael Gayed entitled “Cognitive Dissonance and the Reflation Disconnect.” I highly recommend our subscribers to read Michael’s report. He opines that, “What is disturbing here is the message the market is giving if inflation expectations do not converge with the level of the stock market. If after all of this monetary action expectations are still faltering for reflation, then something far deeper may be underway which we might only understand with hindsight.”

If you want to access the full Monthly Market Commentary (MMC) by Marc Faber, it is available for 300 USD per year.

Marc Faber April 2013 Market Commentary

Marc Faber has just published the latest monthly market commentary on Gloom Boom Doom website. The April 2013 report is entitled "I am writing and I shall tell you later what it is about".

Marc Faber explains that when a government goes bust in a democracy, as it's inevitably is going to happen in most Western governments, the majority of people who have no assets or few assets will always find it appealing to collect money from the “fat cats”, for example the so-called 1% in the US who own 42.7% of financial wealth. It should be obvious that if 80% of the population owns just 7% of financial wealth, they will be tempted to transfer at some point in future, part of the wealth of the 5% or 10% richest Americans to the masses that have no savings.

He goes on to explain that we are here today because the people who work hard for a living are now vastly outnumbered by those who vote for a living. This changes the way you would invest. Normally, various asset markets and individual investment opportunities would be analyzed according to their merits, but now wealth taxes must be taken into account.

There's one  attachment with this MMC:

• Update on recent trends in the art market by Kenny Schachter, 

If you want to access the full Monthly Market Commentary (MMC) by Marc Faber, it is available for 300 USD per year.  

Marc Faber March 2013 Market Commentary

Marc Faber has just published the Gloom Boom Doom market commentary for March 2013 entitled "I do not believe in a deflationary Collapse but I am afraid of it".

After telling investors to relax about short term volatility last month, he explains why he worries about the time when the current asset inflation will give way to a serious asset deflation, which has to happen eventually.

The decline in the gold prices concerns him, as it could mean we are about to enter a period of asset deflation. He stresses 2 points:

• Uncertainty about the asset deflation timing. Most likely, different asset classes will deflate at different times and with different intensity. 
• In a deflationary environment, financial assets (stocks, government and corporate bonds especially high yield bonds) would likely be the most vulnerable assets. That's why he can envision money flowing into a sound currency, and move out of fiat money. This is why he still continues to  recommend the gradual accumulation of physical gold.

This month market commentary comes with one attachement:

• “The Indian Budget & the Broken Window Fallacy” by Shanmuganathan “Shan” Nagasundaram. This report shows well-intentioned government plans may not have been as beneficial as thought, and it my have even hurt the ones it intended to help (poor people).

If you want to access the full Monthly Market Commentary (MMC) by Marc Faber, it is available for 300 USD per year.  

Gold - Long Term Chart Says Buy Now!

Since 2001, Gold has been behaving very nicely and stayed in a narrow range in its logarithmic chart. So If Gold has gone down for an extended period of time and suddenly drop at level not seen for a while, or alternatively if it has gone up for a long time, and makes new highs, I like to have a look at the logarithmic chart since the bull market started in 2001, and see is we've hit the higher or lower bound of the trend

(Source: Boursorama)

Guess what, we've just hit the lower bound last Friday. Assuming long term fundamentals remain the same (debt issue, money printing...), Gold is likely to go up over time, and this could prove to be the right time to buy. The 14-day RSI is at 30 (and hit this level 3 times) which means Gold is oversold short term. So it looks like a long and short term buy at this level.

The only thing that bothers me is that is has mostly corrected through time, and not really through price (it only lost 15%) which means it keep it amazing record of 12 positive years. Which is probably why Georges Soros recently lightened his position, and Jim Rogers said he would not buy at those levels. however, Marc Faber still continues to advice buying every month.

The Gold chart may also indicate it's a good time to buy Silver which has gone down by over 40% since the $50 it hit in 2011, but it's still not technically oversold (yet).

Marc Faber February 2013 Market Commentary

Marc Faber has just released the market commentary for February 2013 entitled "A good Life is not a State to arrive at - but a Way of Traveling" on gloomboomdoom.com.

Marc Faber first explains that investors should learn to relax and ignore what markets do in the short term in order to outperform. He takes one of his reader question as example:

"Why I would rather not sell my gold and subsequently buy it back at a lower price.?" 

The reason he is not selling his gold is because he wants to diversify and keep approximately 25% of his assets in gold (also 25% in equities, 25% in corporate bonds and cash, and 25% in real estate). That way if the price of gold declines, it is likely that the value of his financial assets would increase, so a decline in the price of precious metals would actually be beneficial to the overall value of his assets since he has around  50% of his portfolio in bonds, cash and equities. But now that stocks and bonds have both rallied very strongly, he feels much more comfortable holding gold than financial assets.

There is no attachment with this month MMC.

If you want to access the full Monthly Market Commentary (MMC) by Marc Faber, it is available for 300 USD per year.  

Marc Faber January 2013 Market Commentary

Marc Faber has just released his January 2013 market commentary entitled "A Great Attitude Creates a Happy Future" on gloomboomdoom.com.

This month, Marc Faber discusses about what may constitutes the best investment: Education of one's children in the greater sense of the word including morality, generosity,. From one investor perspective, the best returns are achieved with "boring" stocks with lower volatility., and the very best way to even lower volatility further is to hold a diversified portfolio of different assets: properties, equities, bonds, precious metals, and cash.

The monthly market commentary including one attachment:

• “It’s time to ‘Bet the Farm’ on farming and farmland” by Coast Sullenger. founder of GAIA Capital Advisors.

I could not find the report online, but GAIA capital advisors provides GAIA farming index and GAIA/ EFG Tracker Certificate.

If you want to access the full Monthly Market Commentary (MMC) by Marc Faber, it is available for 300 USD per year. 

Marc Faber December 2012 Market Commentary

Marc Faber has just released his December 2012 market commentary "Always try to be a little kinder than Necessary" on gloomboomdoom.com.

This month report explains that something is clearly not quite right with the economy, as the recent performance of Wal-Mart, Tiffany, Genesco, and Kohl’s show. What concerns Marc Faber greatly is that most asset markets had outsized gains since early 2009, excluding Vietnamese, Chinese, Japanese, and European equities, as well as US housing. He believes that investors’ expectations about future returns are far too optimistic, and that in a world that currently hardly grows, investors will need to reduce their future return expectations. Therefore, 2013 will most probably not be a good year for holders of assets, and he has now shifted to the preservation of the outsized gains he has achieved over the last 3 years.

Marc Faber also wishes Merry Xmas to everybody and reminds his readers to try to be as nice and kind to other people quoting Albert Schweitzer: "Constant kindness can accomplish much. As the sun makes ice melt, kindness causes misunderstanding, mistrust, and hostility to evaporate." 

The monthly market commentary including one attachment:

• The Fed’s Last Hope by Michael A. Gayed,Chief Investment Strategist at Pension Partners, LLC.

I cannot find the attachment, but Gayed mentions it in a marketwatch.com articles, and explains bonds have now very little value, and the relative advantage of dividend yields over bonds yields, will be bullish for stocks.

If you want to access the full Monthly Market Commentary (MMC) by Marc Faber, it is available for 300 USD per year.

Marc Faber November 2012 Market Commentary

Marc Faber has just released the November 2012 market commentary on the gloomboomdoom.com website.

This month report is entitled "No Rational Thought will have a Rational Effect on a Man who has no Rational Attitude" where he explains it is about time that the so called “new-Keynesians” or “neo-Keynesian” (aka Voodoo economists :)) should consider that current interventions with expansionary fiscal and monetary policies have led to the current economic crisis. He also discuss a view shared by Robert Gordon, an economist at Northwestern University, who believes that the poor US productivity performance since the 1970s is a harbinger of things to come, and that “the rapid progress made over the past 250 years could well be a unique episode in human history rather than a guarantee of endless future advance at the same rate.”

Marc Faber is now negative about most asset classes, and believes equities could easily decline by 20% or even more from their recent highs, and expects better buying opportunities to emerge sometime in 2013, although a post election rally could always take place.However, he very much doubts US equities will make new highs the next twelve months or so.

There are two attachments to this monthly market commentary (MMC):

• "US CEO Confidence Stuck in a Rut" by Alan Zafran, a partner at Luminous Capital.
  This attachment is available on CNBC website, and discusses the lack of enthusiasm of 1,000 CEO who have been surveyed recently.
• "Albert Einstein was right" - Some photos which clearly show that Mr. Gordon has a point.

If you want to receive the Monthly Market Commentary (MMC) by Marc Faber, it is available for 300 USD per year. 

Marc Faber: 2013 Will be a Difficult Year for Equities

Marc Faber is interviewed on CNBC Fast money about his market outlook. He explains stocks (and gold) have traded in a narrow range in the last few days, and he expects a breakout, most probably on the downside, but he does not rule out new highs... If the market goes down around 150 points, he expects the Fed to start QE3, 4, and the market could rebound, but he still think we have probably seen the high 

for the year. He concludes by saying 2013 will be a difficult year for stocks. 

Marc Faber August 2012 Market Commentary

Marc Faber has just published the August 2012 market commentary on the gloomboomdoom.com website.

This month report is entitled "False Knowledge; it is more Dangerous than Ignorance." where he discusses the debate between the China “bulls” and the China “bears” with the China bulls accusing the China bears of ignorance. But a close analysis of the Chinese economy reveals a meaningful economic slowdown, which is likely to have a negative impact on growth in the region since most Asian countries have larger exports to China than to Europe or the US. Markets have become complex. Few stocks are still breaking out on the upside and a large number of stocks are breaking down. Caution is advised.

There are two attachments to this monthly market commentary (MMC):

• "Market update July 2012" by Brett Heath of KSIR Capital 
• A report about Oslo Bors a deep value stock, by Dov Plitman and Boris Zhilin at Armor Capital.

If you want to receive the Monthly Market Commentary (MMC) by Marc Faber, it is available for 300 USD per year. 

Marc Faber - Coming Next: Global Crash and U.S. Treasury Bubble Popping

Marc Faber is interviewed on Capital Account (Russia Today) by Lauren Lyster, where the talks about his views on US treasuries and capital markets, the Chinese economy and the consequences of a Chinese slowdown.


First, he explains that since 1981 were the yield was above 15%, US treasury have been in a bull market and is in bubble territory. But as with the Nasdaq in 1999, a bubble can continue inflation, and some friends of Marc Faber think 10 years trasuries will eventually yield less than 1%, and 30 years less than 2%. But his own view is that if yields increase again in markets such as the US and Japan, money will flow into equities, so he's not really worried if stock markets go down, even though he does not rule out a crash.

When asked about China, he basically says that Chinese government numbers are bogus, and when you look at Taiwan and South Korea, you'll find their exports to China are flat, and electricity consumption in China also show a weak picture of the Chinese economy.

Finally, he gives his outlook on what is happening now, and explains there is clearly a recession in Europe, the US is slowing down, but a China slowdown would be more important to the global economy, because it would have a strong impact on emerging economies. Currently Asia is certainly not in recession, but there is basically no growth.

Marc Faber appears in the first 10 minutes below, and the second part is about Libor with a zero hedge contributor.

Marc Faber: China is Weak, Don't Short Commodities and Buy Europe

Marc faber is interviewed on CNBC on the 15th of July to discuss the (fake) Chinese GDP number and his outlook on commodities and stocks

His view is that China economy is much weaker than  expected, and there should be some stimulus. He would not short Copper, because it can be easily manipulated, and rally in commodities could be in the making.

He sees good investment opportunities in Europe in countries such as Spain, Portugal and France.

Marc Faber July 2012 Market Commentary

Marc Faber has just released the July 2012 market commentary on the gloomboomdoom.com website.

This month report is entitled "We are most deeply asleep at the Switch when we believe to control all Switches" where he discusses investors overconfidence both on the long and short side, and the lack of diversification that may result due to this overconfidence.

He explains that investors should consider carefully that win/win transactions are far less common than win/lose transactions, and usually, either the buyer or the seller makes a big mistake. In order to be successful, you have to make sure that you do not make that big mistake.

There is just one attachment to this monthly market commentary (MMC):

• “Money Illusion and Why the ‘Bond Bubble’ Must Burst.” by Michael A. Gayed,Chief Investment Strategist at Pension Partners, LLC

The report is no available publicly, but Gayed regularly contributes to Marc Faber MMC, and it's not the first time he talks about a "Bond Bubble". His investment outlook is that stocks are going to vastly outperform bonds, at least in real terms.

If you want to receive the Monthly Market Commentary (MMC) by Marc Faber, it is available for 300 USD per year.

Barron's Midyear Roundup: Marc Faber Markets Outlook

Now is the time for Barron's Midyear Roundup. They had 10 experts on their panel including Marc Faber. Here are Marc Faber's picks.

Investment/Ticker	Price 6/6/12
Gold (spot, per ounce)	$1,619.30
Goldcorp/GG	40.24
Singapore REITS
Mapletree Comm Trust/MCT	S$0.92
Frasers Centrepoint Trust/ FCT	1.63
K-REIT Asia/KREIT	0.98
Mapletree Logistics Trust/MLT	0.98
Ascott Residence Trust/ART	1.06
Cache Logistics Trust/CACHE	1.03
Parkway Life/PREIT	1.81

and what he had to say:

Are things really as bad as they look?

FABER: The global economy has slowed considerably. Europe is in recession, and growth in U.S. GDP might owe more to statistical aberrations than reality. In Asia, the Chinese economy has been decelerating sharply, which impacts China's trading partners and industrial commodity prices. Lower demand for commodities hurts commodity producers, whether in Argentina, Brazil, Africa, or Russia.

Will things get worse before they get better?
Yes, possibly much worse. Central bankers will argue that more stimulus is needed. But the crisis has occurred in large part because governments have grown excessively large. The private sector produces growth. When government is 40%, 50%, 60% of the economy, the economy won't perform well. If you cut government spending meaningfully, you produce more growth, although this can be painful in the near term. Canada took this course in the mid-1990s. The outlook is grim for the federal deficit in the United States. Regardless of who wins the election, there will be compromises. But spending cuts will be back-end loaded and tax increases will be postponed. We won't see a federal deficit below a trillion dollars for a long time.

What will the stock market do for the rest of this year?
Most markets peaked in May 2011. The S&P 500 fell to 1,074 by Oct. 4 from 1,370. Then we had a strong rebound with the index making a new high at 1,422. This high wasn't confirmed by other indexes, such as the Value Line Index, the Russell 2000, and the Dow Jones Transportation index. The S&P 500 is vulnerable at this level. I anticipate further weakness in the second half of the year. Corporate profits will disappoint. Some 40% of S&P 500 earnings come from overseas, and a large proportion are generated in Europe.
There is no resolution to the problem in Europe because no one wants to accept austerity. The best outcome for Greece probably would be to exit the euro zone. But the new Greek drachma would depreciate by 50% to 70% against the euro. The Greeks don't want their pensions paid in a depreciating currency. Nor do they want austerity, as their pensions and government salaries would be cut by 50%.

How will the stalemate end?
The breaking point could be three, four, five years away. The world is heading toward a major crisis. In the meantime, central banks can continue to print money and markets might move up. Since 2009 stocks around the world have more or less doubled. But the economy hasn't performed well, and the typical household hasn't been helped. With quantitative easing, money flows into the hands of relatively few people. I am very negative about the outlook longer term.
It is safest to buy U.S. Treasuries because the U.S. can print money. It will pay the interest. But you are earning only 1.6%, and the cost of living is increasing by about 5% a year around the world. You are getting a negative real return.

So you're recommending equities, despite the poor backdrop?
I still like my January investment picks. As a group, Singapore REITS look OK. Among them I like Mapletree Commercial Trust [MCT.Singapore], Frasers Centrepoint Trust [FCT.Singapore], K-REIT Asia [KREIT.Singapore], Mapletree Logistics Trust [MLT.Singapore], Ascott Residence Trust [ART.Singapore], Cache Logistics Trust [CACHE.Singapore] and Parkway Life [PREIT.Singapore].
I am also warming to gold shares. Gold corrected to $1,522 last December from $1,921 in September. It rebounded to $1,795 in February and is back down around $1,600. The correction could last longer, but given that governments will print more money, gold is relatively effective as a currency. My preference is physical gold, but I would also own some gold shares, which have been decimated. Goldcorp [GG] is attractive because most of its properties are in the U.S., Canada, and Mexico. The company isn't exposed to regimes that are talking about nationalizing resources. In general, stock markets are oversold. The U.S. government-bond market is overbought. The U.S. dollar is overbought, and gold is oversold near term.

 Source: http://online.barrons.com/article/SB50001424053111904470204577446414018834948.html

Marc Faber June 2012 Market Commentary

Marc Faber has just released his June 2012 market commentary on the gloomboomdoom.com website.

This month report is entitled "The Political Function of Inflation is to Mislead Public Opinion" and he talks about the distortions created by inflation. He explains that scholars had longer discovered the viciousness of monetary inflation long time ago quoting Nicholas Oresme (14th century):

Among the many disadvantages arising from alternation of the coinage which affects the whole community is....that the prince could thus draw to himself almost all the money of the community and unduly impoverish his subjects. And as some chronic sicknesses are more dangerous than others because they are less perceptible, so such an extraction is more dangerous the less obvious it is.

He carries on saying that we need to consider seriously Sheila Bair’s tongue-in-cheek proposal to fix income inequality with a $10 million loan for everyone, especially if we are to believe the Keynesians that the "economy desperately needs a short run fix" (Krugman).

The main issue is that Keynesian economic policies are directly responsible for the current global economic crisis, because they have led to excessive debts in most Western societies, which will remain for a long time and be a drag on growth.

There is only 1 attachments with this monthly market commentary (MMC):

• "Natural Gas: A Contender for the Greatest Thematic Tailwind over the Next 20 Years" by Pedro Noronha, Noster Capital LLP

I could not find the report online, but this simply makes the case for investing in Natural over the long term. With peak oil, the limitations of coal both in terms of energy as well as political & environmental reasons, natural gas will become more and more prominent in the energy mix. Pedro Noronha is long on CHK.

If you want to access the full Monthly Market Commentary (MMC) by Marc Faber, it is available for 300 USD per year.

PS: Last month he also issued a temporary (and short) report in the middle of the month. I don't have access to it, but this kind of "urgent" report is usually not a good thing...

Marc Faber: Global Recession in Q4/2012 Q1/2013

Marc Faber is interviewed on CNBC on the 25th of May 2012.

He explains that the best solution would be for a Greek exit, but what's likely to happen is a softening of the German position and the start of Euro-bonds which would be negative for the Euro. However, currently the Euro and the stock markets are oversold and we should anticipate a counter trend rally.

He also mentioned that as everybody focuses on Europe, the real threat to the economy could be the slowdown in India and China.

Some analysts estimate that a Greek exit could lead to a 50% correction in European stocks, but Marc Faber disagrees and views this as a good outcome likely to be positive for stocks.

He then goes into technical analysis and explains that many stocks are breaking and we should except a significant recession, so significant that he's 100% sure there will be a global recession by Q4 2012/Q1 2014 and recommends to hide in US dollars.

Marc Faber: If the Market Makes New Highs, It Will Crash Like It's 1987

Marc Faber is interviewed on Bloomberg on the 10th of May 2012.

When asked if Greece will leave the Eurozone, he answered that it would be much better for Greece and the entire Europe, going even further Spain, Italy or even France should leave the Euro. European countries should all go back to their local currencies and trade internationally with the Euro. If you keeping bailout them out, it just compounds the problem. The public has just been brainwashed into thinking that there would be an economic catastrophe would the Eurozone break up, although it could just be th solution to the European crisis. He then comes hard on European bureaucrat saying they make the government in the U.S. look like an organization consisting of geniuses. The problem in European is too much debt and lack of fiscal discipline.

He has a bearish view on the economy, but investments in Europe might still go up if this print enough money. Speculators should look at high quality stock in Spain, Portugal and Italy, as the market is oversold.

There has been a minor correction in the US, but it could become more serious. A new high has been made in April (S&P at 1422), but technicals look bad and he does not see the S&P 500 making new high unless there is a HUGE QE 3. But if QE 3 occurs, and the markets make new highs, you can expect a massive crash like in 1987.

Marc Faber May 2012 Market Commentary

Marc Faber has just released his May 2012 market commentary on the gloomboomdoom.com website.

This month report is entitled "Economics is the Sum of all our Choices". In this report, he refers to Alfred Marshall, one of the greatest economists that ever lived, who wrote in “Principles of Economics” that, “economics is a study of mankind in the ordinary business of life” and that, “the laws of economics are to be compared to the laws of the tides, rather than with the simple and exact law of gravitation. For the actions of men are so various and uncertain, that the best statement of tendencies, which we can make in a science of human conduct, must needs be inexact and faulty.” Mar Faber then explains that the same principles can be said about the movement of asset markets. Any forecast is therefore going to be inexact and faulty. 

There are 3 attachments with this monthly market commentary (MMC)

• A report by Geoffrey Batt,  Managing Member at the Euphrates Iraq Fund Ltd.
• "Another tsunami of cash is hitting Dubai, get invested!" by Peter Cooper at Arabianmoney.net
• A newsletter by the Child’s Dream Foundation, a charitable, not-for-profit organisation dedicated to empowering marginalized children and youth in the Mekong Sub-Region, which includes Myanmar, Laos, Thailand and Cambodia.

If you want to access the full Monthly Market Commentary (MMC) by Marc Faber, it is available for 300 USD per year. Sometimes, Summaries or highlights are available on the web, I'll repost it here if one becomes available.