Marc Faber: S&P 500 Will Soon Crash by 50%

bear-1397235-640x480The bear is back. Marc Faber, the editor of the Gloom, Boom & Doom Report just made another gloomy call on the S&P 500, this time forecasting a 50% downside to the benchmark index.

In an interview this morning on CNBC television, Faber said “I think we can easily give back five years of capital gains, which would take the market down to around 1,100.” Continuing, “The fact is, the market hasn’t really been driven by genuine buying, but by stock buybacks, takeovers and acquisitions, and market leadership has been narrowing. It’s not that many stocks that have been making new highs. It’s quite a narrow growth of stocks that have been very strong.”

Faber’s bearish prognostications are nothing new. He’s been negative on stocks since the recovery from the financial crisis began, making call after call for massive pullbacks. So far, he’s been completely wrong.

Faber called stocks “very overbought” at current levels and noted that “the excess liquidity that have been generated by central banks will lead to a great deal of volatility.” In reality, we’ve actually seen historically low volatility for several years now.

Defending his position, Faber recounted some ghosts of markets past. “I’ve seen, repeatedly in my life, markets drop 40 or 50 percent, and in some cases I’ve seen a market like the Dow Jones drop 21 percent in one day,” he said.

Eventually, Faber will be proven right and the markets will in fact pull back. Waiting for that to happen, however, could cost investors many more years of gains.

The SPDR S&P 500 ETF Trust(NYSE:SPY) isn’t paying any mind to Faber’s commentary today. The largest ETF tracking the S&P 500 rose $0.26 (+0.12%) to $218.31 in Tuesday morning trading. SPY has now gained about 7% year-to-date.


You are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (

Powered by WPeMatico