Marc Faber was interviewed this morning by the Asian TV CNBC-TV18. Marc Faber sees a high risk in entering equities now and is quoting as saying..
“This is not a good time to enter equities, except for traders.”
Marc Faber also believes that commodities are also about to top out. This comes at a time when many resource stocks have more than doubled from the November and March lows and some have even tripled. Thus, Dr. Faber believes that it is not an very attractive entry point to buy commodities and commodity-related stocks.
Among the commodities discussed is Oil in which Marc Faber believes it is not a good time to buy as oil has doubled from its lows despite rising demand. On India, Marc Faber said that he would rather sell India than buy it ” I think that India has of course good growth potential, but there are still lots of uncertainty, both political and economic. As a trader, I would rather sell India than buy it. But as a long-term investor, I would hold here in India.”
Marc Faber believes certain Asian equities are attractive but has taken some money off the table due to the recent run up.
“I have taken some money off the table. In Asia, we have lots of stock markets and lots of stocks that have reasonable valuation. I wouldn’t say very cheap, but reasonable valuation. If you have a long-term time horizon and have cash flow whereby you can buy more shares if they should go down, then I would say hold them. But as a trader, I think as of today I would rather sell than buy.”
Like Jim Rogers, Marc Faber is bearish on the dollar. Part of the problem with the U.S dollar is the federal government is printing so much money that sooner or later inflation will catch up. Marc Faber recognizes that the U.S dollar will depreciate and will become a weak currency but also acknowledges the volatility involved in the market which could go either way. Thus, he believes the problem with the U.S. Dollar is that “No paper currency is very desirable.”
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Good interview and it comes at a good time. With the markets sitting in this 880 – 950 trading range, it is difficult for people, especially indivdual retail investors, to figure out what to do.
One thing is clear based on Dr. Faber’s comments: DON’T BUY RIGHT NOW!
Though, I am looking at natural gas and UNG today and I am really close to clicking the “BUY” button. I respect Dr. Faber’s opinions, so I suppose I will hold off a little longer to see if a better price happens. Faber reco’d natural gas in his May 2009 GBD report because it was so oversold (and still seems to be).
My point is — if you are going to enter the commodities markets, look no further than UNG for an undervalued (compared to other commodities) energy asset.
At the same time, if a correction were to occur as a result of a strong US Dollar, I have no doubt that Natural Gas would get slammed along with oil, base metals, agribiz and even gold/silver!
Mac