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Thursday, January 2, 2014
Equity Markets Will Be In A Volatile Trading Range
"In equities though, investors seem to be obsessed with “what the stock
market will do” because they focus almost entirely on stock market
indices. There is a possibility that equity markets will move, in 2010
and thereafter, into a volatile trading range as was the case in the
1970s. The point I wish to make is that good stock selection is at least
as important as, or even more important than, “guessing” where the
markets will go. Even in recessions and down-markets, some companies can
continue to thrive.
I think it is important to understand that
in emerging economies, where markets are far from being saturated,
companies that execute well can continue to grow even in a poor economic
climate. So, investors should focus on identifying well-run and
promising companies, and fund managers who are conservative,
disciplined, and focused.
Still, I continue to notice a large
number of stocks all over the world have recently broken out on the
upside with heavy volume. I concede that some stocks have also broken
down, but for now there seems to be a preponderance of upside breakout
moves, which suggests that a bear market is not imminent. Therefore, I
would still use market corrections as an opportunity to add to positions
in fundamentally sound companies."
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.