After years of being famous for the Gloom & Doom part of his Gloom, Boom & Doom report, Marc Faber was sounding a different note on Bloomberg television this morning. The investor and newsletter said that all the new government spending and money creation, might not fix the economy but would cause a stock-market rally from now to the end of April. What’s more, he said that now that the S&P was off 56 per cent from its high, investing in equities was likely to be profitable over the next 10 years.
“Equities could rally between here and the end of April,” Faber said. “The government’s efforts will fail to boost economic activity. They can boost stocks. Stocks have adjusted meaningfully.”
Faber thinks the rally will likely be short-lived, saying that after the March to May rally, the S&P 500 could drop 27 per cent to below 500. But on a long-term perspective, he sounded very bullish, saying investors will make money over the next 10 years.
Hard-money investments–like gold–had climbed too far and fast, he said. He urged investing in industrial commodities instead. Faber had been something of a gold bug, advising his readers to buy gold at the start of its eight-year rally, when it traded for less than $300 an ounce. Yesterday gold traded at $932.78 an ounce.