Veteran trader Marc Faber explains how to protect your money from market uncertainty
Investment manager Marc Faber, a.k.a. “Dr. Doom,” earned that moniker after advising his clients to get out of the stock market before the October 1987 crash.
Faber, publisher of the investment newsletter “The Gloom, Boom, & Doom Report,” doesn’t foresee an imminent market crash now, but is wary of the U.S. stock market and continues to be concerned about stock valuations.
Says Faber: “The market has been driven higher by a handful of stocks,” that is, “any stock that has anything to do with artificial intelligence.”
These stocks, Faber notes, are “grossly overvalued.”
After 50 years of investing and trading experience, Faber has learned many important lessons.
No. 1: Respect the power and unpredictability of the stock market
MarketWatch: What are the red flags you’re seeing in stock prices?
Faber: First, if you look at valuations by historical standards, they’re very high, especially the favorites I just mentioned.
Second, the profit margins of American companies will come down because of inflationary pressures, and also because of weak demand.
Faber: I have a very good lesson that everyone should remember:
The market is unpredictable. On any trading day, we don’t know how the market will close. And in six months, where will the market be? Do you know? I don’t know.
What must be done — and will be done eventually — is to bring fiscal deficits down.
There are three choices. First, politicians could increase taxes.
Second, politicians could cut government spending
The third option, which is what every government has embarked upon, is inflation.
I love inflation because the value of my assets goes up.
But as a social observer, historian and economist, I know it’s a disastrous policy with a disastrous outcome.
The poor people get hurt the most during inflationary times because they have no assets.
That’s why if you look at every inflationary period in history, wealth inequality increased dramatically.
Michael Sincere MarketWatch 10 September 2024
“The Gloom, Boom, & Doom Report”
https://www.gloomboomdoom.com/
Kommentarer