Marc Faber Predicts Markets Will Fall Over 30%

Longtime bear Marc Faber is known for his contrarian investment views, which is how he earned the name “Dr. Doom.” Over the last few weeks, Faber has been continuously predicting a “correction” in equity markets of over 30% when talking to financial news channels including CNBC and BNN. Although Faber has also built a reputation as ‘the boy who cried wolf’ in the eyes of many market enthusiasts, the rate at which equity markets are currently selling off makes me wonder if there is some truth in his bold statements.

The S&P/TSX Index is at multi-month lows after losing about 11% in six weeks. This comes as our neighbours south of the border are witnessing their markets wipe out all their gains for 2014.

It does seem scary. But should investors really be afraid? I continue to think not. I’ve said it before, and I’ll say it again: such a selloff in the markets is rather normal, and might I add, healthy. It’s been a while since we’ve seen the markets erase some gains and many traders expected such movements. Add to that seasonal volatility, ebola scares, slowing growth in Japan, and oil price declines and its only natural for investors to get the jitters.

But while Faber sees gloom and doom, Warren Buffett’s motto is to “be fearful when others are greedy and greedy when others are fearful.” And that’s a concept I agree with strongly. After all, it’s hard to disagree with one of the most legendary investors of our time.

- The Motley Fool