The author of the widely followed Gloom Boom & Doom
Report said the current rally, which has seen the Standard & Poor's 500
gain more than 5 percent in 2013 and 12 percent since its November 2012 low, is
getting tired and will run out of steam soon.
"We are very overbought, but it is also possible that
we have a mild correction in February and then a further increase in stock
prices," Faber said on "Closing Bell." He added it would be "something that
would be similar to '87 where in the first half of the year until August the
market went up by 41 percent (only) to lose 40 percent in months in October and
November. So it's a possibility that we have a lot of volatility this year in
equity prices."
Though he is more widely known for his dour outlook on
stocks and the global economy, Faber occasionally has advocated for the U.S. stock
market.Now, though, he is unwinding his long positions. Indeed, there are some signs that investors have amped up
their bullishness. Money flows to mutual
funds that track stocks have soared to record levels of $55 billion in January,
and sentiment surveys are showing a strong positive bias for equities.
"There is a chance that corporate profits will
disappoint in 2013. But, by the way, there could also be some geopolitical
problems, he said.......
Read all about Dr. Doom at http://www.cnbc.com/id/100417361
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