Investor Marc Faber said, \u201cInstead of interest rates going down, they could start to go up, instead of the dollar being weak, it could strengthen.\u201d<\/p>\n
Global markets are heading for an \u201cimportant turning point\u201d as interest rates begin to rise within about three months and the U.S. dollar gains, according to investor Marc Faber.<\/p>\n
Investors should buy stocks and sell cash and bonds because governments are continuing to print too much money and may create a new \u201ccredit bubble,\u201d Faber, publisher of the Gloom, Boom & Doom report, told reporters during a forum in Seoul today.<\/p>\n
\u201cInstead of interest rates going down, they could start to go up, instead of the dollar being weak, it could strengthen,\u201d Faber said. \u201cI\u2019m ultra-bearish on everything, but I believe you\u2019ll be better off owning shares than government bonds.\u201d<\/p>\n
The Dollar Index slid 8.5 percent last quarter, the most since June 2002, and dropped 1.3 percent this month after Federal Reserve Chairman Ben S. Bernanke signaled he may add money to the economy. That new supply is reflected in exchange rates, based on how the currency reacted to the last round of so-called quantitative easing, said HSBC Holdings Plc, BNP Paribas SA and Nordea Bank AB. The central banks of Israel and Taiwan raised borrowing costs in the last 15 days.<\/p>\n
Faber\u2019s recommendation on stocks is shared by Warren Buffett, the billionaire chairman of Omaha, Nebraska-based Berkshire Hathaway Inc. Investors buying bonds now \u201care making a mistake,\u201d he said Oct. 5 at Fortune magazine\u2019s Most Powerful Women conference in Washington.<\/p>\n
\u201cIt\u2019s quite clear that stocks are cheaper than bonds,\u201d Buffett said. \u201cI can\u2019t imagine anyone having bonds in their portfolio when they can own equities.\u201d<\/p>\n
U.S. stock dividends are paying more than government bonds. Ten-year Treasuries yield 5.2 percentage points less than equities of companies in the Standard & Poor\u2019s 500 Index when adjusted for annual inflation, near the most since March 2009.<\/p>\n
Faber told investors to abandon U.S. stocks a week before 1987\u2019s so-called Black Monday crash and said in August 2007 that U.S. shares were entering a bear market. The S&P 500 peaked two months later before retreating as much as 57 percent.<\/p>\n
My philosophy is conservative:\u00a0 Bonds provide assured income, no matter their day to day “value.” Stocks are for gambling. They’re doing nicely at present. They’ll probably do nicely for a while. They could turn from one moment to another. The economy is not that splendiferous, although companies are earning more with fewer people. Meantime I’m keeping my stops tight.<\/p>\n
The foreclosure\/mortgage fraud sca<\/strong><\/strong><\/span>ndal is the ultimate Cockroach.<\/strong><\/strong><\/span><\/p>\n His name is Egbert the Cockroach. <\/em><\/p>\n You know about cockroaches. You see one in your kitchen today. You will it. Three days later, his brother appears. You kill him. Four days later… you get the idea.<\/p>\n There are three reasons to sell stocks:<\/p>\n 1. When the stock’s price has gone into overdrive. You’ve made several times your money. And now is the time to take some money home and to play with the bank’s money.<\/p>\n 2. When the stock’s fundamentals turn seriously sour. Or the founder leaves.<\/p>\n 3. When a cockroach appears. A cockroach event is something that doesn’t happen in the normal course of business. The classic cockroach is an “accounting irregularity.” The freeze on foreclosures is the biggest cockroach to come along in years. This one is going to be a dozey. Egbert has a huge family. We’re going to see more and more of them in coming weeks.<\/p>\n I wouldn’t go near the banks with a 12 foot pole. Maybe it’s time to short Bank of America (BAC) and Wells Fargo (WFC)?<\/p>\n Shingles revisited.<\/strong><\/strong><\/span> <\/strong>Here’s what I’ve learned:<\/p>\n 1. Shingles is a seriously awful disease. If you had chicken pox when you were young, you will get shingles when you’re old — i.e. over 50. Getting vaccinated with Merck’s Zostavax vaccine makes huge sense.<\/p>\n 2. The vaccine is not easy to get because Merck makes it in batches. The next batch will be out in December. the previous batch was out in June.<\/p>\n 3. Do not trust your doctor get a vaccine for you and the spouse. Call every doctor, pharmacy and hospital in your area until you find the vaccine now. And get vaccinated NOW. Do not wait. If you can’t find the vaccine, leave a Comment below.<\/p>\n![\"\"](\"..\/wp-content\/uploads\/2010\/10\/cockroach2.jpg\" "\\"cockroach2\\"")
<\/a><\/strong><\/p>\n