Dr. Faber's 2007 outlook

You can't ask for better press than this.  Strategic Investment contributor Dr. Marc Faber was interviewed by Bloomberg TV..then Bloomberg did a writeup posted on its website with the lede, "Marc Faber, who predicted the U.S. stock market crash in 1987, said global assets are poised for a 'severe correction' and it's time to sell."  That was enough for Drudge to link to the article, vastly expanding the reach of the good Doctor's outlook for the coming year.

Here are some of the specifics:

  • Bullish sentiment in everything from stocks to bonds to commodities to real estate to art is as sure a sign as any that valuations are peaking.
  • Stocks in the biggest developing economies have had such a good run the last five years that it's time for a correction.  That means China, India, and especially Russia.
  • In his home turf of Asia, he likes Singapore and Vietnam, Japan too, but he says the situation in Thailand needs a while to sort itself out.
  • Gold still looks good — falling supply, rising demand.
  • And oil is set for another run upward after ending 2006 at about the same price where it began.

Dr. Faber's bottom line:  "In the next few months, we could get a severe correction in all asset markets.  In a selling panic you should buy, but in the buying mania that we have now the wisest course of action is to liquidate."

The Daily Reckoning