Marc Faber Agrees Re Redd Fox’s “Big One”

  One Response to “Marc Faber Agrees Re Redd Fox’s “Big One””

1. 

   P. W. Dunn says:

   September 24, 2011 at 8:24 pm

   Over and over again Faber says that central banks will resort to money printing to resolve the problems. If that is the case, the current down turn, if one can find the bottom may be the beginning of new bubble in the stock market. Twist, from what I can see and understand, has an easing affect in that it makes the current balance book of the Fed–three times what they started with in 2008 when this all started–a permanent thing. So this is the new normal. Nearly 2.8 trillion dollar adjusted money base–until the next time there is more QE. That is ominous in terms of the possible inflationary affect that will have.

   Chris Mayer at Daily Reckoning is suggesting the following:

   As investors, you stand pat. Or you use the opportunity to pick-up a few things. As I’ve said before, the time to prepare for times like now is before they happen. I don’t know what the market will do from here. No one does. I do know that we own some very cheap securities. I look over the back page of Capital & Crisis and just in the class of 2011 I see a bunch of stocks trading for well under ten times free cash flow. Not earnings, but real free cash flow. These are all very cheap stocks in well-capitalized companies run by owners.

   I’m not selling anything at these kinds of prices. And anyway, when we bought them, we didn’t buy them thinking we would flip them in months. So it is silly to get upset because the stock is down six months in or whatever. These are stocks whose stories will play out over the next year, at a minimum.

   I think they will all trade significantly higher in a year or two. Remember 2008, when stocks melted to hardly anything. We saw many stocks plunge — from $16 to $2, from $40 to $13 and so on… But if you just went about your business, tending to the daily affairs of your life and not your portfolio, you were well rewarded for your patience in less than two years as these stocks recovered the ground loss and then some. And that was 2008.

   Read more: Operation Dumber http://dailyreckoning.com/operation-dumber/#ixzz1Yv1n76U7

   I tend to agree with Mayer; because I didn’t sell off in 2008 but rather bought bargains at great prices, I was able to recover. Now, I’m down a lot for the year, but as the bargains get better, I’ll be looking to continue shopping–in the CDN oil and gas, and gold mining sectors–they still have great cash flow and many of the oil companies are paying dividends in the 8-11% range now. I remain bullish on these sectors, because those who have money, the ones that still have buying power, will still want energy and gold.

   Always a pleasure Monty. I really appreciate the work you do for us.

   Reply