Marc Faber, the editor of ‘The Gloom, Boom & Doom Report’ recently told CNBC: “We have a bubble in everything” His caution is also echoed by Nobel Prize-winning economist Robert Professor Shiller, who has urged investors to keep their optimism in check because market valuations are at “unusual highs”.
Whats more, the bubble in everything is about to come to an abrupt end, according to Marc Faber
“We have a bubble in everything”
“The warning signs that a market crash is looming are becoming louder and more frequent. Despite this, most market participants are behaving like it can never happen. In fact, bullish trading is pushing the markets to new highs on an almost daily basis. The warnings are seen, heard and then ignored” said Marc Faber in his blog.
“For most people, these warnings are like the graphic images printed on today’s packets of cigarettes, they spell out the dangers and yet all the same people are still smoking,” adds Marc Faber.
So investors continue to long stocks even though they know they can see red flags, they see and understand the warning signs, according to Marc Faber. But they continue to go long stocks.
Why? Becuase they believe we are in a stock bull market by default.
But Marc Faber reckons that the good times are coming to an end. He has been predicting gloom, boom, and doom for the last decade. Even a broken clock gets it right once a day so Marc Faber is bound to be right soon. That the bubble of everything is about to come to an end.
“Bullish trading is pushing the markets to new highs on an almost daily basis. The warnings are seen, heard and then ignored”
In a recent interview with CNBC, he said:
“We are at a high level, and it’s concerning” highlighting that the only time’s valuations have been higher being in 1929 and 2000.
Last month HSBC issued a Red alert warning. They’re looking at two key levels: 17,992 in the Dow Jones Industrial Average and 2,116 in the S&P 500.
“We are at a high level, and it’s concerning” – Mark Faber
“As long as those levels remain intact, the bulls still have a slight hope. But should those levels break and the markets close below, which now seems more likely, it would be a clear sign that the bears have taken over and are starting to feast,” said the head of technical analysis Murray Gunn. “The possibility of a severe fall in the stock market is now very high” he added.
But in the age of Central Bank “managed markets” where the fundamentals and even the technical indicators have been disconnected from the market perhaps the best indicator whether the bubble of everything comes to an abrupt end is what the Central Banks will do next.
If the Fed (in cahoots with the ECB, BoJ, BoE) decides that now is the time to pull the plug (unload its 4 trillion dollar balance sheet of assets and start aggressive hikes in base rate) then Marc Faber’s “we have a bubble of everything” (also echoed by many) could be about to burst.
Dan Loeb targets Sony. Dan Loeb is an activist investor and founder of Third Point, which oversees about $14.5 billion in assets.
Last year the activist investor viewed Campbell soup as a bargain when Third point reported that the soup maker could fetch a takeover value of $52 to $58 per share.
A year later and the activist investor Dan Loeb targets Sony
Dan Loeb's activist hedge fund Third Point is raising an investment vehicle to generate between $500 million and $1 billion so it can continue to buy Sony shares, according to a recent report in Reuters.