Marc Faber Looking for a Good Gold Stock
Marc Faber—the famous analyst behind the Gloom, Boom, & Doom Report—wants you to know that he’s not bearish on all stocks, just most of them. In a recent interview, Faber said he’s looking for a good gold stock and even a few oil and gas companies.
“Some depressed sectors are showing signs of major lows,” Mac Faber said during an interview on CNBC. “I am still negative about stocks but I can see more money printing in the future, which will lift some sectors.” (Source: “Marc ‘Dr. Doom’ Faber is a big bull on these stocks,” CNBC, May 19, 2016.)
According to Faber, gold mining stocks and drillers are the way to go. His reasoning is pretty simple: gold prices move opposite to the greenback, which means “more money printing” could boost any stock related to precious metals.
From that perspective, an active Federal Reserve is great for the mining industry. Think about it: they print cash to weaken the U.S. dollar, which leads to higher gold prices.
A majority of analysts think the Fed is trying to be less active, but Marc Faber disagrees. He thinks the central bank’s history of aggressive stimulus has put it in an awkward position where letting go would mean risking an economic collapse.
After all, the stock market crashed just weeks after they first raised interest rates.
That December rate hike was supposed to be the first of many increases, but the Fed is kicking the can down the road.
Marc Faber says it’s because the Fed’s money printing is what kept stock prices inflated. He argues that the Fed will back down from its promises once this vulnerability becomes clear. That’s why he made the “more money printing” comment.
Regardless of what the Fed does or doesn’t do, Faber still thinks good gold stocks are worth a second look. Many of these companies have already seen double-digit gains this year.
“The most attractive asset in my view is gold shares and oil and gas shares,” Faber said Wednesday on CNBC’s Trading Nation. “I think they still have significant upside potential this year.” (Source: Ibid.)