Marc Faber: US Stocks Overvalued, Gold & Oil Shares Ripe

February 24, 2015

Marc Faber is the editor and publisher of "The Gloom, Boom & Doom Report" and the founder of Marc Faber Limited, an investment advisory and portfolio management firm, based in Hong Kong. Nicknamed "Dr. Doom," he is a famous contrarian investor known to scope out deeply depressed and overlooked assets. Faber has authored several books, including "Tomorrow's Gold: Asia's Age of Discovery." Widely followed by institutions and retail investors, he appears regularly on CNBC and Bloomberg TV.

Faber recently sat down with ETF.com to discuss his views on valuations in the US and European markets. He tells us which emerging markets look attractive, why he still likes gold, and points out two favored sectors with "rebound potential."

ETF.com: The S&P 500 just hit an all-time of 2,100. What is your forecast for U.S. stocks in 2015?
Marc Faber: The forecasting record of all strategists, including myself, is not particularly good. But if you look at the valuation of U.S. stocks, there is little value. I believe that the market will close the year lower than it is now. If the markets go up further because of additional money printing by central banks around the world, other markets will do better than the U.S. It's interesting that recently, many emerging markets have performed much better than the U.S.

ETF.com: When you say other markets, what markets in particular do you think will outperform the U.S. this year?
Faber: There is a meaningful slowdown in China, there's no question about it. There is no question about the fact that emerging economies are not growing much at the present time. But the valuations are reasonable. They're not inexpensive, but compared to U.S. stocks, and compared to the economic outlook of Europe, they're reasonable. Equally, if you said, "You have to either invest your money in Europe or in the U.S.," I find better value in Europe.

ETF.com: A lot of money has been flowing into Europe ETFs, obviously on the back of the ECB's quantitative easing announcement. Do you prefer a broad approach, or are there specific countries that are poised to do better than others?
Faber: Somebody wrote recently a piece suggesting you should buy the worst, because that's where the outlook is more likely to improve. So there is still some value in Italy, France and Spain. I wouldn't go necessarily for Greece.

But equally, the news about Russia has been so negative; politically because of the declining oil prices. But I feel that, at this level, we're getting into a buying zone. I am not suggesting that an investor put all his money into Russia. I'm just saying that, if you take a longer-term approach, five to 10 years, there is some value in Russian equities.

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