Marc Faber Issues Grim Warning
Perma-bear investor Marc Faber’s current stock investment advice to retail traders is to expand their exposure to precious metals and Asian economies, while staying away from the U.S. dollar.
“[The U.S. dollar] is not a desirable currency,” Faber, publisher of The Gloom, Boom & Doom Report newsletter, told CNBC on Tuesday. “I think the most desirable currency will be gold, silver, platinum and palladium. I still think the mining sector has embarked on a new bull market.” (Source: “Marc Faber turns bullish on these investments,” CNBC, March 22, 2016.)
The U.S. dollar has depreciated over the past four months, with the U.S. Dollar Index losing 4.4% since its 52-week high of 100.51 on December 2.
Gold, silver, platinum, and palladium, on the other hand, have all made gains in 2016. They are up 15.3%, 10.7%, 7.4%, and 1.9%, respectively.
Faber said many sectors have had huge declines over the past 12 to 24 months and investors would see some opportunities there.
The 70-year-old Swiss investor cited the gold miner Market Vectors Gold Miners ETF (NYSEArca:GDX).
After falling 81% from its 2011 peak of $65.80 to its five-year-low of $12.40 on January 19, the ETF rebounded up to $21.42 on March 17.
Marc Faber thinks that ETF will be going higher.
As for the Asian economies, Faber said much of the economy and the market is still struggling.
“I think that in Asia, the sentiment turned very bearish at the end of last year and especially concerning China and the Chinese economy. And as a result of that, Macau gaming companies got slaughtered,” Faber said. “And now they are, in my view, at a relatively attractive level. They started to move up: [Las Vegas] Sands China, Wynn China.”
After crumbling from its all-time high of $87.03 in March 2014, Las Vegas Sands Corp. (NYSE:LVS) fell to a 52-week low of $34.88 in January, but has since regained 48% to $51.77.
Wynn Resorts, Limited (NASDAQ:WYNN) plunged 80% from $246.65 in March 2014 to $49.95 in January. Since then it has recovered 81% to $90.50. Faber believes it could still surge higher.
“I don’t think it’s a bargain by any means, but I believe China despite its near-term problems that could be very substantial, will in the long run be a very rewarding investment destination,” Faber concludes.