“The S&P has rallied 19 percent in 2013, which is impressive by any measure. But the market did far better in 1987, when stocks added more than 30 percent from the beginning of the year to Aug. 8,” Alex Rosenberg reports for CNBC. “The problem?”
“The market ended up tanking in the second half of that year—dropping 36 percent from the Aug. 25 peak to the October low, before closing out 1987 nearly exactly where it began,” Rosenberg reports. “And Marc Faber, publisher of the Gloom, Boom & Doom Report, predicts that the very same thing will happen in the back half of 2013.”
Rosenberg reports, “‘In 1987, we had a very powerful rally, but also earnings were no longer rising substantially, and the market became very overbought,’ Faber said on Thursday’s Futures Now. ‘The final rally into Aug. 25 occurred with a diminishing number of stocks hitting 52-week highs. In other words, the new-high list was contracting, and we have several breaks in different stocks.’ Faber says that’s exactly where we find ourselves this August… His year-end market call lives up to his ‘Dr. Doom’ moniker. Faber expect to see stocks end the year ‘maybe 20 percent [lower], maybe more!'”
Read more in the full article here.
He must be a fun guy to live with. I wonder if there is a Mrs. Faber.
Stock Market “experts” / “analysts” are like Weathermen – they’re wrong 90% of the time they try to predict something, then will spend the next two days telling you why what they originally said didn’t actually happen, but they were still right.
Can I buy Apple at $400 again ?
I believe I have heard this from him before.
The only way his predictions will ever be “right” is the way a broken clock is right twice a day. Why’s MDN promoting this FUD?
But in 1987 was the Fed printing $87 billion dollars a month to prop up the market?
I am so tired of reading stock market news.
When I can buy Apple stock at $16 again, I’ll concede Mr. Mark Faber is right. Until then…
It stands that slower gains are stronger.
However try to compare 2013 to 1987, is like comparing London to Rome.
These guys need to stick to facts and stop theorizing.
Just reverse the year numbers and you see that 7891 is much bigger than 3102.
There is no comparison at all.
Here is the deal. The US prints notes which are value-less and only prompt up by the oil trade. Daily they tax the world through the balance of payments interests – global trade is donee stay in dollars – whilst the digital cash printing press churns out more to prop up the crash prone economy. When the crash comes it will be devastating. Hence why the 1% have been stashing the benjis. They know the party is due for a heavy landing!! The world can wait no longer. New world order.
The Current market is being sustained by the fed buying bond buying spree.. they have indicated that September they may start slowing the purchases and tapering them down to zero. When that happens the artificial bubble in the market will either slowly deflate or have a massive correction.. knowing Wall street, a crash is more likely than slow deflation.. Faber may be proven correct in the end..
… And as we know, economists and stock analysts have a 30% chance of being correct.
I jest, sort of, of course. But their comprehension of their area of expertise verges on the statistically insignificant.
I jest, sort of, again! But we’ve been hearing this ‘Double Dip Depression’ doom mongering since 2010, and counting.
One thing can be agreed upon. Our current rung on the ladder out of the 2007 global economic depression is based on extreme monetary fiddling and number bending. We most certainly do NOT have a strong foundational economy in very much of the world. It has been SCOURED for all it’s worth by the monetary manipulators and parasites, leaving nothing much more than a scrawny skeleton to keep it aloft.
There are some exceptional companies with dependable futures, one of which of course is Apple. As for dependable country economies, I’m not sure where I’d rather be at this point. I know where do NOT what to be!
Stock market up 19% in the last year?
Uh, No, not in real terms.
The purchasing value of each individual dollar has been diminished by approximately that amount, which then requires somewhere around 19% more “dollars” to buy the same item, whether it be a share of stock (which actually is just a piece of paper declaring what something is “worth” ) It’s worth it only until enough people say it’s not worth it, and then it’s not.
Simple
When you print dollars and throw them into the money supply, each one of those devalues the dollars already out there. And now they actually have an “improvement”. They don’t bother with printing, tney literally just change the numbers in whatever app that they use to “regulate” the money supply.
Clever, huh? And the crazy (insane!) thing is that people are buying the idea. Until the moment that a large enough number figure out the game and no longer believe it. Then………………………error message 404 in terms of our money.
I call BS.
Name any commodity whose costs went up ~19% YOY from 2012-2013.
I might add that while Bernake’s “quantitative easing” is rewarding the banking magnates for their bad behavior, the value of the US dollar is on firmer footing today than it was when the prior administration was actively driving it down in an attempt to spur exports. Remember, when the Euro debuted, it was pegged at parity to the US dollar. Bush’s policies drove the value of a dollar down immediately, which of course is exactly what oilmen want. Obama’s policies have been blocked at every turn by an uncooperative and inept congress, with the end result that the Fed is the only entity able to make any changes, and Bernake’s steady hand has surprisingly opened up credit markets without decreasing the value of the dollar.
Now if you were worried about future budget deficits and potential future inflation, sure, we have plenty to talk about there. But stop acting like the current administration or Fed has done anything but assist in the recovery. The fat cats that got the world into this mess have entirely recovered everything they lost, painlessly. Meanwhile Main Street is waiting for these “job creators” to do what they claim they do. If you’re so proud of “making it yourself”, then do it already. Instead corporate entities like Apple can’t even figure out to do with all the cash they hoard.
The woods are full of doomsayers and short sellers. Perhaps this clown could be right. But long term investors roll with the waves. And so should you.
I recall the night of the ’87 crash. Dan Rather of CBS went on the air with a news special with short seller Jim Rogers, basically telling viewers that the world as we know it ended. I looked at the show with incredulous fury, boiling over at Rather for causing needless panic. If you took the often wrong Rather at his word, you would have missed out on a huge rally that followed.
That day and the day that followed, Warren Buffett and Shelby Davis (a must-read: “The Davis Dynasty” the story of one of the greatest, yet most little-known investors in history – http://www.amazon.com/The-Davis-Dynasty-Successful-Investing/dp/0471331783) dived in with both feet and bought stocks like a pride of lions on a wildebeest. They immediately sensed the stock market wasn’t doomed – it was like a January white sale at Macy’s. They made off like bandits.
Also, the day after the ’87 crash, a little company by the name of Cisco Systems opened for business. And a young man by the name of Jeff Bezos came up with an idea for an online retail establishment to sell books.
Don’t view this crap as doom. View it as a rare opportunity to buy into great companies at outstanding prices. If you are invested in a great company like Apple, stay invested and ride out any short term rough seas. You should be in the stock market for years, and not panic when fear mongers like Faber try to break your spirit, and capitalize on your worries.
Great investors like Warren Buffett, Shelby Davis, Peter Lynch and Benjamin Graham capitalized on the fears of others and saw a bigger picture. You should too.
NOTE TO MDN: Cut this crap. Shame on you. Markets go up and down, but in the long run, stocks are by far the best investment class available. Please stick to the stories that matter. Thanks.