Japan Stocks Will Outperform All Others in 2012 – Marc Faber
Faber, publisher of the Gloom, Boom and Doom Report, spoke
to Bloomberg Televisions Betty Liu this morning and said that
the Japanese market may outperform all the other markets against
all expectations in 2012.
that investors should be very careful at this stage
because he believes that earnings may begin to disappoint
and corporate profit margins could deteriorate. Also
that the economy has bottomed out, but is far from robust.
Excerpts from the interview can be found below, courtesy of Bloomberg
whether hes finding more shorts in the equity market:
money-printing environment Im reluctant to short. But say
whereas I recommended investors to increase their positions last
October, November, December, now I think that if people are overweight
in equities they should reduce positions somewhat
The U.S. dollar is desirable at the present time. And we have to
say one thing. The market consists of thousands of stocks and the
market consists of many different stock markets globally. The S&P
has done exceptionally well relative to, say, emerging economy stock
markets, most of which are still lower than they were in 2011. So,
if you look at the advance-decline line of all the share markets
in the world, then it is definitely being deteriorating. And I happen
to believe that money printing will continue and I would probably
buy financial shares and I believe that the Japanese market may
outperform all the other markets against all expectations in 2012.
that earnings will deteriorate and profit margins will shrink:
I think there are some cost pressures creeping in terms of rising
raw material costs, especially energy, and the problem with, say,
a QE3 would be that you are doing it in an environment of very elevated
oil prices. So, maybe the energy prices would go up more and squeeze
the margins of some corporations. And certainly squeeze the consumer.
And my sense is that the economy has bottomed out but is far from
robust because the typical household is being squeezed by higher
cost of living increases. There are various measurements. You can
measure the CPI. It is rising by less than 3%. Everywhere I look
I see households essentially paying between 5% to 10% more for goods
and services than a year ago.
Q2 will be as strong as Q1 for investors:
that if you look back at a year ago we made a peak of 1370 on S&P
on May 4 and then dropped sharply to 1074 on October 4. Then we
recaptured the lows in November and December. Since then, the first
quarter has been very powerful and has surprised investors because
of its strong performance. And I think now the expectations are
very high. The market is no longer oversold the way it was in December.
And everybody thinks that the race is on, go along with equities,
the hedge funds have positioned themselves on the long side and
optimism is high. I would be very careful at this stage.
the rest of the article
2012 Wall Street Pit
Marc Faber [send him
mail] lives in Chiangmai, Thailand and is the author of Tomorrow's
Best of Marc Faber