ETF.com: Over the past year, frontier markets have done extremely well compared to emerging markets. What are your thoughts on frontier markets?
Marc Faber: I have to go back some time, because the
expression "frontier markets" did not exist in the '80s or '90s. It's a
more recent expression for markets and economies that haven't opened up
yet and are more recently opening up and joining the global economy. So,
what you would have called emerging markets are now called frontier
markets. Some of them have colossal booms, and then also colossal
Some of them have had good performance, because the zero percent
interest-rate policy of the U.S. means that capital flows somewhere in
some kind of assets. Frontier markets are relatively risky assets. Five
years ago, all the German dentists were investing in Vietnam, and then
it collapsed. More recently, they all wanted to buy Myanmar assets.
But investors must understand, yes, long term, they will grow, but
there is an execution risk. I'm the chairman of a fund in Cambodia, and
I'm not managing the fund, I'm just the chairman of the board, so I look
after investors' interests, but the manager so far has really failed to
perform particularly well, given the strong growth rate Cambodia has,
for the simple reason that they invested money in numerous assets that
didn't work out.
So this is not such a simple game. We always have to consider,
optically China had macroeconomically the best growth anyone could
imagine for the last 15 years. But I wonder who has made money in
Chinese stocks. Not many people.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.