Marc Faber, author of the Gloom Boom & Doom Report, is as bearish as ever.
“People with assets are all doomed, because prices are grossly inflated globally for stocks, bonds, and collectibles,” says the investment advisor in a new interview published in this week’s Barron’s.
But Faber is the first to admit that at least the timing of some of his calls has been wrong. From Barron’s:
I thought the U.S. market would have a 20% correction last fall, but it didn’t happen. I also said the market might explode to the upside before the correction occurred. We might be in the final acceleration phase now. The Standard & Poor’s 500 is at 1650. It could rally to 1750 or even 2000 in the next month or two before collapsing.
Fortunately for Faber, he’s actually been exposed to stocks, which might surprise some people who have been listening to his message of doom. From Barron’s:
I own equities, and I should thank Mr. Bernanke. The Fed has been flooding the system with money.
I don’t know how the world will look in five years, so I have heeded Ray Dalio’s advice to diversify. [Dalio heads the investment firm Bridgewater Associates.] I keep 25% of my assets in equities. I haven’t shorted anything yet, although I am tempted to short the S&P or the Russell 2000. I don’t own U.S. stocks, but I hold some Asian shares, including Singapore real-estate investment trusts, which I will discuss momentarily.
Even the most aggressive bears understand that it is prudent to be broadly diversified, which sometimes means having an underweight exposure to the asset they deem so risky.
Unfortunately, the intensity of the bearish growl often scares investors away from the asset class altogether.
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