Marc Faber Predicts Massive Stock Market Crash
Marc Faber, who is the author a book titled, “The Gloom, Doom, and Boom Report,” and is considered ultimately a “bear,” in the strongest sense of the word, is now predicting a market crash of epic proportions.
And yes, a guy who aligns himself might just do such a thing, but that isn’t to say that his depressing news isn’t correct, nor opportunistic to savvy investors.
Faber believes the S&P 500 will drop 40%. His reasoning is the surging (and apparently unreleastic) stocks of companies such as Apple, Facebook and Netflix.
“We’ve had more than eight years of a bull market. The Nasdaq is being driven by very few stocks,” said Faber on Friday’s “Trading Nation.” That rally “is not a particularly healthy sign from a technical point of view, and valuations are very high,” the investor added.
Two weeks ago, the Nasdaq went to a record high of 6,341.70.
“You know we have a lot of volatility, and when things will start to go down, they’ll go down a lot,” he said.
Faber believes that unbalanced wealth distribution could be the cause. He believes that the flow of income between big corporations and normal people having such deep and defined disparity could be the tinder box to blow up the market’s good health.
“Either people with money will be taxed heavily … or we’ll have a massive deflation in asset prices — I repeat: massive,” he warned. “Eventually the system will break.”
In case you are wondering, Faber’s been wrong a lot. You can take some solace in that, but he’s not backing down. And he does have a definite point when he says, “We could print enough money that the Dow goes to 100,000. All I’m saying is it will end very badly, extremely badly.”
If this crash were to occurr, longterm investors could simply hold their ETF’s and Mutual Funds and likely just buy more at discounted rates. Short term inestors would be the ones taking the screw job.
Author: Jim Satney
PrepForThat’s Editor and lead writer for political, survival, and weather categories.
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