
The market hasn’t had a correction of more than 11% since October 2011. It is possible that a well-run bond fund will do better this year than the stock market.
Enthusiasm about the U.S. market reminds me of the talk I heard nine months ago in Indonesia and Thailand. Subsequently, those markets fell 35%. While it is too late to buy the U.S., it is too early to buy the emerging markets. They aren’t incredibly cheap, except for Vietnam and Iraq, and capital could still flow out.
Marc Faber bought 10 year Treasuries
Ten-year and 30-year yields eventually will be much higher. But I bought some 10-year Treasuries when the yield rose to 3%, because in the near term, yields could retreat to 2.5% or 2.2% or even 2%.
The economic recovery is in its fifth year. On March 6, the bull market in stocks will be five years old. That’s long, by historical standards. Sometime this year, the stock market could see a big tumble, as in 1987. Then the long bond will rally and reward Bill Gross.
To clarify a point about the size of the U.S. economy and its importance in the world, China imported 12% of global metals consumed in 2000. Now it imports up to 47% a year. China’s growth has a major impact on emerging economies. The U.S. has no impact because it is a service economy. China has gone from sending less than a million travelers overseas in the mid-1980s to 100 million now. You hardly see American tourists in Asia any more.
– Via Barrons Round Table 2014
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.