Marc Faber, The Gloom, Boom & Doom Report says it’s time to short stocks as the Fed “has lost control” of the bond market and stocks have become overbought. Faber explains why he is looking at a gold play in mining stocks and Treasury Notes. And a trade on the housing sector and the S&P 500, with CNBC’s Jackie DeAngelis and the Futures Now Traders, Jim Iuorio at the CME and Anthony Grisanti from the Nymex. The perma-bear also is predicting (again) that stocks will drop.
Marc Faber video interview clips and transcript below
and europe has been better, look what’s going on with european banks today the all of a sudden, a lot of the big names up. aunds it looks like some of the winners in the u.s. are being sold to buy some european companies. we’ve seen inflows into european etfs. i know we’re waiting for a bottom in europe, but there’s some money being committed here. i think that’s the story. we see the effect of china, positive expos data on the overall group. materials are on the up side, and take a look at what it’s doing with commodities countries, again all because of china. copper aluminum, zinc, nickel, terrible numbers for days and months now, and here’s commodity country, sue. australia, brazil, these are all exchange-traded funds. you can buy them. they’re all with the wind at their back as a result of the positive — between 1% and 3%. good news on china, hopes of europe bottoming, and some better numbers on europe. i think it’s shifting a bit of money around. ben, come on into the picture. tyler asked the question at the beginning of the hour. are you better off buys stocks, or do you try to catch that falling knife? you’re with us. also hugh johnson will join us from albany as you know, hugh is basically the chairman of ciof hugh benson advisers. it depends on what kind of investor you are. obviously. a trader would approach the market differently. as a trader, are you better off trying to catch the falling knife? or do you wait until you think you see a bottom and wait until the market turns? as a trader my instinct is to sell when the market is rising. i know sooner or later it will pull back. that’s been a pain ffl trade. the pullbacks have been very short-lived and shallow. as a long-term investor, i continue to say, if you’re an investor, you want to buy things when you go on sale, not when you’re going up. you do the same thing the rest of your life. why would you change when you’re invest if you followed that thought process four or five years ago and bought the major banks or the home builders, you have a veryfully portfolio right now. not cheap, though. that’s the problem. that is the problem. so, hugh, weigh in on this. you tend to take the longer view of things, but it is tempting when you see prices get cheaper and cheaper. that doesn’t mean they aren’t going to continue to decline. well, that’s the whole problem, sue. you do want to buy things when they represent really good value. right now we need things to get cheaper, whether we’re talking about the whole market or whether we’re talking about individual stocks, but that’s not enough. you mentioned the right point, and that is when they get cheap, as we found out in 2007, going into the financial crisis, they can get cheap, but they can get cheaper. what you want is both. you want stocks getting the levels to represent good value, and then after they represent good value, you want them to start to post good relative performance orerformance relative to the s&p 500, when you get that positive momentum or positive performance of cheap stocks, you have the right combination, you should insist on both parts of this equation. are you anticipating a pullback, hugh? everybody’s been waiting for a pullback. maybe there will be in august. this is traditionally a crumby month. exactly. we had three days in a row. do you think there will be a significant pullback, hugh? you know, i don’t know whether to say i anticip a pullback or i’m crossing my fingers and hoping for a pullback. my guess is, based on my crunching of the numbers, we’re about 1.5 to 2% overvalued. common sense, plus that number crunching, common sense, of course suggesting we’ve come very far, very fast, suggests that we should at least guess some kind of decline. i’m hoping for 5% or 6%, for the important purpose of getting things to a level that represent muchr value, otherwise i’m not going to buy. hopefully then we start to see better performance. you can also buy protection. that’s one way to play it. that’s where the etfs are an important role, whether they’re a sophisticated trader, etfs are a great model for protecting, because you can buy the bearish side of the equation, the negative etfs, if you will, rather than buying puts that have a whole different pricing structure. that’s another reason why the vix doesn’t trade the way it used to. and you can hedge the etfs. listen to the tone here. it’s we’re wait fog it to drop a bit, so we can buy it cheaper. if that’s not a floor under the market, i don’t know what is. we’ll leave it there. gentlemen. good to see you, hugh, bob, i’ll see you in a bit. ty up to you. tesla is soaring. the electric car company knocking its quarterly earnings out of the market. look at tesla shares today alone. life is good for tesla’s ceo elon musk. well, i’m glass that bmw is bringing an electric car to market. that’s cool. i think there’s room to improve, and i hope that they do. my comments about the manufacturers — sorry — a little giddy there, you know? tesla up a whop 350% in 2013. that’s why barclays downgraded the stock to equal rate while raising the price target. groupon also surging as it continues its recovery, having the best day since the ipo, the company reporting a record quarter for its north america business on a better than expected 7% jump in revenue. it named cofounder eric lefkofsky, and announced — the stock is up about 125, 126%. fannie mae bringing in — the government-controlled mortgage giant has earned a profit six straight quarters. da olick is live on the real debate in washington. diane that? reporter: well, that’s right. that net income is nearly twice the income earned in q2 of last year. as you said the company’s sixth consecutive quarterly profit. the mortgage giant, which along with freddie mac, now backed nearly two thirds of all new loans, reported a positive net worth of $13.2 billion as of june 30th and will may taxpayers as a different on the senior preferred stock. treasury performed