Faber Says Oil, Stocks, Real Estate Are Overvalued

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"Stocks, property and commodities
are overvalued as an economic slowdown and inflation will
curb earnings growth and erode the value of assets,
investor Marc Faber said.    

Oil may have peaked after a 43 percent increase this
year, said Faber, the Gloom, Boom & Doom report publisher,
in a Bloomberg Television interview today. He said he
favors the dollar against the euro, as well as gold.    


"I don’t see any compelling value in equities, real
estate or commodities,” Faber said from Zurich. “Contrary
to the last 25 years, we are in a period of de-leveraging.
Corporate profits in particular are still far too high for
2009 and have to be adjusted downwards, and valuations
become less compelling.”



Stocks, Real Estate and Oil Are Overvalued, Marc Faber Says
Carol Massar and Alexis Xydias
BLOOMBERG, June 9 2008

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Discussions found on the web:
  1. Jim commented on Jun 11

    WOW …looks like Bloomberg can’t HANDLE THE TRUTH!

    This guy sounded spot on to me, but he started talking badly about Bernanke towards the end and they conveniently ran out of time!

    He also mentioned things like …how can I buy Citi Group when I have no clue what they are really worth! :)

    Great clip Barry …thanks!

  2. Melancholy Korean commented on Jun 11

    He also said the dollar was one of the few assets out there not overvalued. Come on, USD. You can do it!

  3. Jim Haygood commented on Jun 11

    As a China hand, Dr. Faber probably is watching the Shanghai stock market’s slow slide into oblivion after its ‘Nasdaq 5000’ style Bubble. Today it fell another 1.5%, following yesterday’s 8% slide, and closed just above the 3,000 round number — which acted as resistance in early 2007.

    Jesse Livermore correctly divined that the 1906 San Francisco earthquake would have a delayed disinflationary impact, which was indeed followed by the Panic of 1907. Reports out of China indicate that consumers have been demoralized by the somber earthquake tragedies.

    There’s also the ‘Olympic curse,’ which has a similar record to the ‘tall building curse.’ That is, the building boom which precedes the Olympics tends to bust afterward. Eight is regarded as a lucky number in China, and the Olympics are scheduled to kick off on 8/8/08 at 8:08:08. But after the luckiest run of eights in a hundred years, where does your luck go from there? Only one way …

  4. rickrude commented on Jun 11

    He has been ranting about the overvalued
    OIL for the last several years.
    Why does he not just shut up. He has been wrong on oil.

    His doom and gloom should remain with the
    US financials.

  5. Edward Harrison commented on Jun 11

    De-leveraging is the key word. Faber believes the short-term problem is inflation, but longer term deflation, as a result of de-leveraging, is the real problem.

    It’s funny when he’s at Barron’s roundtable versus Abby Joseph Cohen. They seem to come from different planets

  6. lurker commented on Jun 11

    rickrude–if he shuts up he can’t get more subscribers….the name of the game is make lots of predictions and then point to the ones you got right in the marketing literature (for examples please see Motley Fool and the world’s greatest living example of guru self-promotion JC lord of Cramerica!) and actually I think Faber is pretty smart from the days when I used to read Barron’s and his roundtable stock and commodity picks regularly crushed the motley collection of egomaniacs Barron’s trots out annually…

  7. Bruce commented on Jun 11

    Well, I think things are going to get even more overvalued…I noticed for the first time today on my Schwab site that a callable 6% C.D. is being offered (Lehman Brothers)….and no matter what the time interval, this is the first callable cd with this rate in a couple of years….I think rates are going to rise this summer, and this will make mortages, credit, the usual suspects have more impact on the economy with our stubbornly high oil prices….

    I think this will get more serious before it gets any better…

  8. scorpio commented on Jun 11

    as our esteemed President says, “bring it on…”

  9. Michael C. commented on Jun 11

    That was annoying with those teleprompt readers constantly asking “what should investors buy, what should investors buy.”

    So Faber talks about what an overvalued environment we are in, and they are stumped…”then what should investors buy?!?”

    Listen to what he is saying for crying out loud and so some of your own thinking. Why do they always feel the need to spoon feed their audience?

  10. Jay commented on Jun 11

    I can see getting long the USD, but not until there is a *real capitulation in equities. Like 10.5k-11k on Dow and vix 40ish. If Uncle Ben would stay out of the way that would help. He’s just putting off the inevitable. Except for Don Luskin and Jerry Boyer, no one believes the March bottom.

  11. lunatic fringe commented on Jun 11

    I was busting up the entire interview:

    “Marc, what should we be buying”?

    puts, maybe?

  12. VJ commented on Jun 11

    Speaking of overvalued, the head of OPEC said there is no reason the price of a barrel of crude should be over $60.

  13. cbobby commented on Jun 11

    “but just give us one…..where you can bet the bank for the next 6 to 12 months”

    Bloomberg “pretty face boy”

  14. patfla commented on Jun 11

    Does anyone have any info on Marc Faber’s prediction (apocalypse) hit rate?

    How often has he been right – and how often wrong? (and of course: how often somewhere in between).


  15. rickrude commented on Jun 11

    Speaking of overvalued, the head of OPEC said there is no reason the price of a barrel of crude should be over $60.

    Posted by: VJ | Jun 11, 2008 12:36:35 PM
    So then he should sell his oil for $60 to me.

  16. Tewhi commented on Jun 12

    Some of your critiscism of Marc Faber isn’t very accurate. He’s been very bullish on commodities, includig oil. What he’s stated is that oil is likely to “correct” and that it’s on the high side now. Which sounds reasonable, we don’t think it will go up 12x again without a hyperinfaltionlike scenario do we? So perhaps oil isn’t a “great” buy right now.

    His US$ prediction is a short term prediction and the prediction isn’t that the US$ is should rally merely that it will hold it’s value for some time and perhaps gain a litle. His long term prediction is down.

    In my limited experience(a few years) he’s been very accurate, but have often left the trend a bit early.

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