Thursday, April 16, 2015

There is very little value in Financial Assets

Sonia: So, according to you Marc which Asian equities have value now? What is your pecking order looking like? 

Marc Faber : If we talk about value, there is very little value in financial assets. If you look at bond yields in Europe and now the 10 year Swiss Bank government bond has a negative yield. And the French government bonds 10 year yields half a percent. In the US government bonds yield 1.9 percent. So, when we talk about value there is not that much value, what there is, is relative value. So, let us say we are obtaining today USD 1 million and our choice is to invest in the US stock market which is relatively high or in India or in Asia in general for a period of 10 years, the Asian markets over a 10 years period will perform better than the US stock markets. You see, India has one advantage and it is that in my view, not everybody will agree with that but in my view, India has probably the world’s best central banker, Rajan and he has kept interest rates at the high level. Now, some people say that is not necessary, you should cut rates, but I think the message from the Reserve Bank of India is really currency stability is number one goal, objective. And once they achieve the currency stability inflation is going to come back and confidence will come back and money will flow into India and then they can start to lower interest rates. - in CNBC TV 18

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.

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