Marc Faber is a definite bull right now, despite his title as Dr. Doom. In the video below he makes his case for gold miners and for a general equity rally through to the end of April (Hat tip Chris Martenson).
His main points are:
- Many miners are facing a cash crunch. So, this is bullish for gold mining companies that can put cash to exploration.
- But gold itself is at a record high compared to the CRB index. Faber likes industrial commodities more.
- Global GDP ex. government has already contracted 10% in his view.
- Money printing and deficits will make it difficult to rein in inflation in future.
- Markets have tumbled 50% so he believes you will make money in stocks over a ten-year horizon if you start buying here. He sees few scenarios where this is not true.
- Markets will go higher due to money expansion. “Don’t underestimate the power of printing money.” That is surely the money quote here.
- The dollar will weaken and this will be a sign that liquidity is flowing into the market.
- Extreme negative sentiment is a contrarian indicator.
Again, Faber is not the only bull here: Buffett, Grantham, Fleckenstein and Leuthold are all bulls.