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All right. Uh, what does any of this mean? Are you piecing any of this together? Well, gloom boom and doom report publisher and sort of someone the markets follow very very closely. Mark Fabber says um, not only these items, but a but a recession is in the all thing. Mark, it's good to have you joins us on the phone.
What are you what are you seeing? Well, thank you for having me. Uh what I'm seeing is a global economy that is uh slowing down massively with some countries already in a severe recession and we have to agree on how do we measure global GDP. If we measure global GDP in US dollars, then countries like Australia, Canada, uh the Euro zone, Japan, which have all had a declining currency are depressing global GDP and as a result of that uh by definition, the world is actually in recession already.
In the US, we have also in industrial production already a recession and in my view it will spill over into the service sector. Now um we've had a bumpy start to the year. China gets a lot of the blame a lot of the blame for that Mark and I'm wondering whether we just throw it on the Chinese. It was just a slight down tick in their in their manufacturing sector.
What what do you think? I like bumpy starts. So we had a big downdraft on the first day of trading on an annualized basis. It would be horrible. But anyway, the market has become a little bit oversold and may rebound, but I wouldn't bet on it. I think what has happened since the 80s, we had massive asset inflation in bonds, stocks, since 99 in commodities, and this is now over.
So what happens now? Well, as you know, so many hedge funds have closed down or are closing down because they can't make any money. And these are the smart people. I'm not as smart as they are, but if they can't make any money, uh typical investors will not make much money in the years to come. In my view, it will become uh stock pickers market and you will have to be very selective in individual markets.
So for instance, I could say Russia is cheap and the US market is very expensive. I could say Vietnam is relatively inexpensive and the US is expensive and divorced. But in general, if the US goes down, it's likely that the other markets won't go up substantially. So if you are one and you know a lot of people either through their 401ks or pension plans that are automatic investors and they're buying you know indexes that mirror the performance of the S&B, the Dow, NASDAQ, a fool hearty venture this year or how would you describe it?
I wouldn't buy any index right now really. I would uh certainly not in the US. What about gold? What about gold and some of the ones that I think uh this is the only sector that has significant and by significant I mean an upside potential for gold shares of three to 10 times and the downside risk is 100%.
Do you understand? So the upside vastly uh outweighs the downside whereas on the S&P 500 the downside outweighs the upside. You know Mark the eighth year of a presidential term a two-term president has at least with recent examples proven problematic. We all know what happened during George Bush's eth year in the fall of that year and the meltdown.
We all know the recession started the implosion of the internet with Bill Clinton's eth year. Do you see things like that going on? Obviously George Bush's a year much worse, but but that things just unravel and politically who who does that damage? Well, it's interesting that you mentioned it because uh under the indices, the typical stock is already down substantially.
That's right. I mean, you know, the very few stocks that have held up the index. So, the S&P is down 5%. But the average stock or the median stock on the New York Stock Exchange is down something like 20% already. And there lots of stocks that are down 40% from the highs. Even Apple is down 20% from the high.
So my sense is that once these so-called fang stocks, Facebook, Amazon, Netflix, Google, crater, that the market has actually more downside risk than people perceive. You're talking about those issues, those big names you mentioned, the Amazon, the Netscape, the Google, the Alphabet, whatever they call themselves, that they they they crater, they could crater here.
Yes. I mean they are essentially uh priced for perfection and uh I remember in 1973 in January we had the nifty50 stocks right right these were stocks like a Xerox and uh Boros and so forth and nothing could go wrong with these companies Polaroid Kodak nothing could ever go wrong I worked at that time at White Well and people said for these good companies no price is too high then they created by 80%.
Wow. Well Mark aren't you a font? All right. Aren't you a font of good news? Good catching up with you my friend. Thank you very very much. Mark um very influential market watcher and a precient one. Hasn't gotten everything right but he's gotten a lot of things right, a lot of trends right in the past.
So you heard his words here. some of these big names that have had these big runups, they could crater his opinion, his view. But as you know, in this show, we like to hear from bulls. We like to hear from bears. And I always similar to this is when we're done.
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