[ Marc Faber ] 28 June 2017 Stock market plunge of 40% or more

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01. you you kind of scared me recently and when you wrote that you could see stocks falling 40% from present levels in other words roughly cutting what we've got right now in almost half why are you so bearish well first of all we had on June the 9th a break and it's interesting that uh the week before I had uh come out and said that these Bank stocks and related stocks like Nidia could easily drop 10% in one or two days Nidia was down 15% in Day on June 9th Netflix was down 10% Apple was down 9% in three days and of and some have recovered but some others have not recovered there's another question that I think many investors overlook uh they say look the NASDAQ is at a new oldtime high it's exceeding the high in the year 2000 but it's driven by stocks that were not even in the index in the year 2000 in other words uh Google went public in August 2004 Netflix in 2002 Facebook in 2012 Salesforce in 2004 these stocks were not even in the index in 2000 and stocks like Intel and Yahoo they're still about half as high as they were in 2000 technology is vulnerable to Innovation and to new competitors and we don't know whether the current uh stocks the bang stocks and related stocks that have driven the index higher the typical stock hasn't gone up a lot whether these stock will still be in business in five or 10 years time so you had doubts about that sort of but Mark a lot of people look at how much the market has run up since Donald Trump's election last November and uh how technology particular has benefited virtually all sectors have are are you saying that the Trump effect is over now um or what well not necessarily what I'm saying is if you look for instance at today's market action the leaders that were pushing the market higher this year like the Hightech stocks that I just mentioned Amazon uh Netflix also Tesla and all these stocks were down today and even if someone is very bullish on stocks I think a changing leadership could have occur or has occurred you look at European markets as an example all the European markets have essentially outperformed the us this year in US dollar terms except for the foot in Britain because the pound was so weak but other markets are up between 16 and 20% and you see that Trend continue to play out you see that Trend contining to play out and if so then uh what are you buying in this environment what do you recommend investors listening to you now do well I I would rather the European stocks than US Stocks because the profit margins in Europe are much lower than in the US but they seem to be recovering and the News out of Europe is not exactly brilliant don't misunderstand me but it's starting to improve somewhat so I think that European stocks given their lower valuation than US Stocks I mean Dan L he bought the big stakes in Nestle the swis uh food company uh these kind of stocks are reasonably priced when you compare them do the prevailing interest rate in Europe in the case of nestle yield 2.7% in Switzerland the 10 years bond has a negative interest so you have some cion of safety in the US the treasury still over 2% all right Mark uh thanks I think it's always good tapping your fine brain Mark faor the Gloom boom and doom report he's one of the well not necessarily what I'm saying is if you look for instance at today's market action the leaders that were pushing the market higher this year like the Hightech stocks that I just mentioned Amazon uh Netflix also Tes lines of all these stocks were down today and even if someone is very bullish on stocks I think a change in leadership could have occur or has occurred you look at European markets as an example all the European markets have essentially outperformed the us this year in US dollar terms you you kind of scared me recently and when you wrote that you could see stocks falling 40% from present levels in other words roughly cutting what we've got right now in almost half why are you so bearish well first of all we had on June the 9th a break and it's interesting that uh the week before I had come out and said that these Bank stocks and related stocks like n Nidia could easily drop 10% in one or two days Nidia was down 15% in Day on June 9th Netflix was down 10% except for the foot in Britain because the pound was so weak but other markets are up between 16 and 20% and you see that Trend continue to play out you see that Trend continuing to play out and if so then uh what are you buying in this environment what do you recommend investors is listening to you now do well I I would rather buy European stocks than US Stocks because the profit margins in Europe are much lower than in the US but they seem to be recovering and the News out of Europe is not exactly brilliant don't misunderstand me but it's starting to improve some work so I think that European stocks given their lower valuation than us stocks I mean Dan Intel and Yahoo they're still about half as high as they were in 2000 technology is vulnerable to Innovation and to new competitors and we don't know whether the current uh stocks the than stocks and related stocks that have driven the index higher is the typical stock hasn't gone up a lot where these stocks will still be in business in five or 10 years time so you had doubts about that sort of but Mark a lot of people look at how much the market has run up since Donald Trump's election last November and uh how technology particular has benefited virtually all sectors have are are you saying that the Trump effect is over now um or what was down 9% in three days and and some have recovered but some others have not recovered there's another question that I think many investors overlook uh they say look the NASDAQ is at a new oldtime high it's exceeding the high in the year 200000 but it's driven by stocks that were not even in the index in year 2000 in other words uh Google went public in August 2004 Netflix in 2002 Facebook in 2012 Salesforce in 2004 these stocks were not even in the index in 2000 and stocks like