Friday, September 25, 2020

Marc Faber: Banned by Broadcasters, Read by Decision Makers

Nobody less than Jamie Dimon, CEO of the largest US bank JP Morgan, regularly reads the "Gloom Boom & Doom Report" by the stock market guru Marc Faber, who fell out of favor with the major networks some time ago. With this reading, Dimon is not alone among important decision-makers.

For decades, Marc Faber was a welcome key note speaker at conferences and a popular interview partner for journalists in general and TV anchor (wo) men of the major US networks in particular. But almost three years ago it was all over. 

With the statement that he was glad that whites and not blacks had immigrated to the USA because the latter had not brought the USA forward, the economic situation in South Africa and Zimbabwe after the change of power from white served as evidence for his assessment too black. 

This made him a "persona non grata" in a flash for the media, the NZZ headlined "Dr. Doom argues stupid", and several board members subsequently decided not to work.

Well-known investors and decision-makers up to CEOs among the readers

that Faber's openly expressed opinions and assessments, apart from the permanently indignant public, still resonate with important decision-makers today became evident. At the beginning of August, none other than JPMorgan boss Jamie Dimon came out as a loyal reader of Faber's paid stock letter "Gloom Boom & Doom Report". And Faber repeatedly made it clear that other prominent actors read his letter regularly.

Plain words

Whether or not Faber's view that a black America would have been less or less economically successful is right or wrong is at best an academic discussion. We will never know if it is right or wrong. By contrast, his view of the central bank policy of our day is much more interesting. He describes the economists in the central banks as idiots, and the printing of money as a mistake. If one could actually generate wealth with the help of the printing press, one would have to ask the question why someone is still producing or working. Faber assumes that the unrestrained printing of money will cause us serious problems sooner or later. And if you look at the development of the gold price, you can assume that he is no longer alone with this assessment.

No more discourse

The fact that the liberal media brainwashed the public with regard to political correctness, Keynesian and political interventions is another Faber statement that one should think about in times of ever narrowing corridor of opinion. Because many discussions that used to be taken for granted and, in the Hegelian sense of thesis, antithesis and synthesis, ultimately led to progress through the discourse, no longer take place thanks to the increasing number of manslaughter arguments.

More of that, please!

We should therefore be glad that there are old, wise - yes, and also white - men like Marc Faber who are not ailing from the zeitgeist, no longer have to be considerate, stand by their opinion and do not adjust their flags to the wind. Because the truth is reasonable for people, as Ingeborg Bachmann said.

Monday, September 21, 2020

Three Bank Stocks to Buy Whose Day Is Coming

Marc Faber is a legendary investment advisor and fund manager. He publishes a monthly market commentary, which carries his view on different investments and asset classes, including bank stocks.

In his September issue, Faber opines that “at some point, the Awesome 8 will turn down and that investors will move funds into value type of stocks including resource stocks and banks.”

The “Awesome 8” here refers to Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), Google (NASDAQ:GOOGL,NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), Netflix (NASDAQ:NFLX), Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA).

I am bullish on the Awesome 8 for the long term. However, I do believe that bank stocks can outperform these names in the coming quarters as investors look for value.

Reuters points out that banks sector’s forward price-book ratio is significantly below historical average. Valuations have not changed in the last few months with most bank stocks remaining sideways.

The Federal Open Market Committee expects U.S. GDP growth to decline by 6.55% for 2020. However, GDP growth is likely to bounce back to 5.25% in the coming year. The banking sector is the backbone of the economy and if GDP growth accelerates, bank stocks are likely to outperform.

With these factors in consideration, let’s take a look at the following bank stocks. These three bank stocks are attractive for the coming quarters as the economy gradually crawls back to normalcy...

- Source,, read more here

Friday, September 11, 2020

Gloom Boom and Doom Report: Precious Metals Are Overbought, But the Potential For Gains is High

By now, with the strong performance of Treasury bonds, equities, and especially precious metals, all my readers who even had just a small allocation in gold and silver, have earned far more than the subscription price of this commentary.

Although we gold holders should all be happy about its performance, other assets such as US equities have also done fabulously well and have actually outperformed gold over the long term – this especially if we were to include dividends.

I just read an interview by Kate Welling with Joel Greenblatt, a well-known deep-value investor According to Greenblatt, stocks like Amazon, Google, and Microsoft, all stocks which he holds in his portfolio, were inexpensive.

However, Greenblatt adds that, “it just seems quite unlikely that we have hundreds of companies that will match the performance of the best of all time. But people are giving them advance credit, in terms of their stock valuations, for being the next Amazon, the next Google. So, we are short hundreds of those companies.”

Maybe we are in a period during which a value stock is a company such as Microsoft, selling for 10-times sales and 31-times estimated earnings but not according to my value criteria. Noteworthy is that whereas the tech sector now accounts for 37% of the S&P market capitalization, aggregate sales for the sector make up for only 10% of the index. In other words, the ownership of FAANG and related stocks seems to be an extremely "crowded" trade.

Actually, I believe asset markets reflect closely what is occurring in the world. Take precious metals markets. They are moving up not necessarily because they expect high consumer price inflation but because investors realize that the purchasing power of paper money is being eroded through the excess creation of money and negative interest rates.

Also, a safe assumption is that central bankers around the world will continue to print money. In other words, the central banks' balance sheets will further expand. How does an investor protect himself from this monetary inflation? He seeks refuge in assets, which cannot be multiplied at the same rate that money can be printed, such as precious metals or crypto-currencies. The investor may also choose to move money into assets whose supply cannot be increased at all such as Rembrandt, Picasso, van Gogh, etc. paintings or old stamps.

I concede that precious metals are near-term overbought, and that the bullish consensus is high. But, at the same time, there is huge pool of potential investors which do not own any precious metals at all and could come into the market – most likely at far higher prices.

My advice is to hold a basic allocation to precious metals, and if desired take occasionally trading positions. Should confidence in the system erode (I am surprised there is still any confidence left) it would take little money in the context of the entire size of global financial assets and of the liquidity, which central bankers create, to boost precious metal prices much higher.

- Source, Marc Faber via the Gloom Boom and Doom Report