Via: Bloomberg
Marc Faber told Bloomberg on April 6, 2009 the Standard & Poor’s 500 Index may drop as much as 10 percent before resuming gains.
“The economic news, while it won’t be good, the rate of getting worse will slow down.”
“We need some kind of correction, maybe around 5 to 10 percent, and after that we can maybe rally more into July”
Bank Rebound
Faber said he bought some commodity producers in November and is now less “interested” in these companies after some stocks more than doubled. He is also buying some bank stocks and predicted that Citigroup Inc. shares could “easily rebound” to around $5 from $2.72 currently.
“The rebound potential for some of these banks and financial institutions is quite high”
Asia
“If you buy Asian equities in the next three months, over the next five to 10 years, for sure you will make money,” he said. “Asian exporting countries will benefit the most from an expansion when it happens.”
“All the Asian markets look actually quite OK but we had a strong rally already”
More of that yellow stuff please
Investors should also diversify into the currencies of Canada, Australia and Singapore because in the U.S. dollar “may weaken somewhat,” he added. The dollar has strengthened against all of the so-called Group of 10 currencies except the yen in the last 12 months, according to data tracked by Bloomberg.
Faber still advises investors to buy gold even though the precious metal is going to be “dead money” in the next three to six months. He plans to buy more gold if prices drop to between $750 and $800 an ounce, he added. Prices retreated yesterday to $872.8, the lowest in more than two months.
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