How are the global markets looking to you at this point of time? Globally, what’s your own sense of earnings potential?
Faber: Well, in the case of earnings, it will depend on the industry and also on the country. Obviously, there is a severe recession and for a while earnings will be somewhat disappointing. I think the big earnings decline has already occurred, particularly in the US. So, I would look at the economy bottoming out at these levels. Also, I would look at further stimulus packages, if the economy does not recover, if the stock markets start going down again. The S&P went up from 666 to 956. Now, it’s below 900 at 875. If we approach 800 they will probably throw some more money into the system, I think the new money printed would kind of support the market.
How do you view Indian markets, in terms of valuations? Is it expensive?
Faber: Well, India had a huge decline between 2007 and the intra- day lows in November 2008. Again, we had a major low in March 2009. So, the market was incredibly oversold and this rebound is only natural. But, after the kind of decline we had between 2007 and 2009, usually we need a base-building period before a sustained bull market emerges again.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
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