“If you look at the markets, there are lots of stocks that are lower, and significantly lower than they were at the highs. And so, it’s not an all-clear signal,” he said, adding that the risks have increased. Marc Faber pointed out to huge disparity between the returns in gold and gold ETF index. While the S&P index is up 23% since January 2016, gold has returned 20% in the same period. Meanwhile, the GDX, the Gold ETF index, is up by 80% since January 2016, indicating that the markets are very distorted and investors are in a very artificial environment, he said.
To counter this, as alternatives to US stocks, the perennially bearish investor invests in “very simple” areas of investment involving real estate, overseas equities and commodities. “I don’t change that asset location a lot, but I am aware that there is a risk because if equities go down, then obviously all my bonds will likely go down,” Marc Faber said.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.