L2 Capital Podcast #07: Chat with Marc Faber – Gloom Boom & Doom

In today’s episode, Marcelo López talked to Marc Faber, editor and publisher of the famous report Gloom Boom & Doom and a contrarian investor known for bold investment decisions in the past.

 

Marcelo begins the conversation by asking about the behaviour of markets from December 2018 to the present. Marc Faber attributes the December declines and reaction seen in 2019 to a number of factors, including the Fed’s capitulation, Modern Monetary Theory and the flow of investor’s capital. He also brings his perspective to the stock market in 2019 and comments on the possibility of a crash.

 

Following on, Marc discusses the monetary policy of the Fed and other central banks, about their recent decisions, asset bubble, Quantitative Easing (QE) and his expectation regarding the next steps that will be taken by the American central bank. He also talks about the economy in some European economies, in the US, in Japan and in China.

 

Marc Faber comments on the possibility of a recession in the US and China, for which he makes an interesting sector analysis, highlighting sectors that may suffer great contraction and others that may even benefit by an expansion.

 

Marc then reflects on the impacts of monetary expansionism on the real economy, on the effectiveness of this kind of policy as a growth stimulus and he cites the examples of Japan and Europe.

 

Faber, who has almost 50 years of investment experience, talks about negative interest rates and gives his opinion on why investors would look for assets with this so unusual feature.

 

When questioned about where to find yield at the moment, Marc Faber talks about the countries he follows in Asia, especially Vietnam. As for his expectation on the foreign exchange market, he mentions some emerging currencies and what he thinks about how the US dollar should behave in the long run.

 

When it came to America versus Emerging Markets stock market, Faber offers his insights into how the relative pricing between them is at the moment and what he considers the best strategy to profit from this difference.

 

Regarding commodities, Marc stated specific examples of how some types may perform according to the global economic environment and also gave his assessment as to the current pricing of the asset class as a whole.

 

Specifically on gold, Faber talks about his views on the metal as a form of investment, especially in the current context of high liquidity injected by central banks.

 

Finally, Marc highlighted those he believes are the main risks to the financial markets and asset prices, such as the issue of political polarization and China’s slowdown.

 

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The L2 Capital Podcast focuses on potential opportunities in the market, and brings to you industry leaders and intelligent conversation about their respective areas of expertise.

 

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