, Marc Faber Blog: Marc Faber: Holding Cash Might be the Gun Powder You Need in the Next Collapse

Friday, February 16, 2018

Marc Faber: Holding Cash Might be the Gun Powder You Need in the Next Collapse


First interview up, Louis Navellier of Navellier & Associates notes that the best corporate earnings in 6 years and tax cuts could spur forward the already lofty US equities markets in 2018. 

Dividend yielding stocks may be preferable in 2018, but caution is advisable before chasing high yields, which only magnifies risk / volatility. 

The host / guest concur that NVIDIA (NVDA) shares are appealing, due in part to record demand for their superior crypto-mining GPUs, a top holding of our guest. Louis Navellier also holds UCTT, Ultra Clean Holdings, and Chinese stocks in anticipation of the Morgan Stanley Chinese stock index update, including the Twitter of China, WEBCO, ticker WB. Another key holding, Align Technologies, ALGN, maker of the popular dental tool, Invisalign is in his portfolio. 

Outside of the equities markets, our guest is also adding copper and lithium contracts amid the auto battery revolution, including FMC corp and Sociedad Quimica Y Minera (SQM). Next up, globally renowned economist and editor of the GloomBoomDoom report, Dr. Marc Faber returns with his outlook on the financial markets for 2018. 

Due to excessive expansion, of central bank balance sheets, global equities prices may be overextended as robust economic conditions are heavily dependent on inflated asset prices, including real estate and cryptos. Investors will turn away from the bubble markets to the precious metals, which will likely be next to outperform competing asset classes. 

Although the Bitcoin mania reached a fevered pitch recently, approaching a total market cap for of $1 trillion (entire sector), Dr. Faber suggests that cryptos could continue to gain popularity after the current correction and increase another 20 fold to $10 trillion, rivaling the $7 trillion gold market, due in part to the limited supply of the top digital coins (figure 1.1.). Case in point, during the month long Bitcoin correction, Ethereum, arguably the silver to Bitcoin's gold, advanced over 100%, offsetting much of the selling - sector rotation is oftentimes viewed as a sign of bull market indication. 

The guest / host concur, investment portfolio diversification is key to navigating through record market volatility and impending bubble implosions. Dr. Faber finds cash the most neglected asset class; holding currency could yield the gun powder necessary to procure discounted investment assets, following imminent price plunges.

- Source, Gold Seek Radio