Is Marc Faber Crazy? – The End Of The World As We Know It

Is Marc Faber Crazy? – The End Of The World As We Know It by Dr. Robert Johnson, CFA, CAIA

There, that headline caught your attention, didn’t it?  I use it to make a point about the state of financial reporting and the dangers surrounding the “infotainment” industry.  I refer to the industry as infotainment because what often passes of as news is really some sort of strange hybrid between information and entertainment.  The problem is that many people fail to understand the entertainment aspect and treat many stories as purely news.

Last Friday a story caught my eye and warrants a revisit of my March 9 ValueWalk post, entitled “Economic Forecasters: A Cry for Attention.”   A headline on Bloomberg via Yahoo! Finance stated “Faber: I’d vote for Trump because Hilary Clinton will destroy the whole world” appeared and, no doubt, piqued the interest of many internet surfers.  Realize now that this story wasn’t coming from TMZ, but had its genesis in an interview at Bloomberg.

Charlie Munger: Invert And Use “Disconfirming Evidence”

Charlie MungerCharlie Munger is considered to be one of the best investors and thinkers alive today. His thoughts and statements on investment research, investment psychology, and general rational behavior are often incredibly insightful. Anyone can learn something from this billionaire investor and philosopher. Q2 2020 hedge fund letters, conferences and more If you’re looking for value Read More


Now, Marc Faber didn’t provide a ringing endorsement of the presumptive Republican nominee in his Bloomberg interview.  He stated that he would vote for Trump because “Trump may only destroy the U.S. economy, but Hilary Clinton will destroy the whole world.”  In other words, Trump was the lesser of two evils.

It is easy to pass these remarks off as simply someone making an attention grabbing statement  or exaggerating for effect, but this is indeed the heart of the problem with our 24/7 news cycle.  Many uninitiated observers will take Faber’s comments to heart.  After all, he is a successful investor whose opinion seems valued by the mainstream financial media.  And, his statements do have consequences.

Does Marc Faber really believe that if elected president of the United States Trump would “destroy the U.S. economy” or Hillary Clinton would “destroy the global economy?”  Of course not.  If one is familiar with Marc Faber’s history they realize that is his modus operandi.  The issue is that many people hearing these remarks may not have that context.

Is Faber crazy?  Yes.  Crazy like a fox.  In the same interview he made very reasoned comments about valuations in emerging markets, making a cogent case on the basis of fundamental analysis for greater commitment to these markets that are undervalued and have seen precipitous declines in recent times.  I am convinced that his outlandish Hillary Clinton statements were simply made to generate interest in his thoughts on emerging markets.   Faber is all about infotainment and he is certainly not alone in that orientation.

One of the most memorable debates on the confluence of economics and entertainment was the widely-viewed appearance of CNBC’s Jim Cramer on The Daily Show in the midst of the financial crisis in early 2009.  Jon Stewart famously admonished the host of Mad Money for blurring the lines between information and entertainment – “I understand you want to make finance entertaining, but it’s not a [expletive] game.”  It appears Stewart needs to reprise his remarks this election season.

 

Marc Faber

Previous article9.7-inch iPad Pro vs iPad Air 2: How Does The ‘PC Replacement’ Differ?
Next articlePlayStation 4.5, Not PS5 Could Be Next Sony Release
Dr. Robert Johnson, CFA, CAIA is the President and Chief Executive Officer of The American College. Prior to joining The College, he served as Professor of Finance in Creighton University's Heider College of Business. From 1996 to 2011, he held a number of senior executive positions at CFA Institute. Bob served on the board of RS Investment Management from 2012 to 2014. Bob is the author of multiple books and over 70 scholarly articles. He is co-author of the books Invest With the Fed, Strategic Value Investing, The Tools and Techniques of Investment Planning, and Investment Banking for Dummies. He has published in the Journal of Finance, Journal of Financial Economics, Journal of Portfolio Management, Financial Analysts Journal, and Journal of Investing, among others. He also serves on the editorial board of the Journal of Portfolio Management. Bob has extensive media relations experience and has been quoted in the Wall Street Journal, Financial Times, Barron’s, and Forbes, among others. He has appeared on ABC World News, Bloomberg TV, and CNN, among others. He is the recipient of the 2013 Alfred C. “Pete” Morley Distinguished Service Award from CFA Institute, the Robert F. Kennedy Memorial Student Award for Teaching Achievement (Creighton University), and Outstanding Faculty Member of the Year Award at Creighton for three years. He holds the CFA charter, the CAIA charter, a BSBA degree from University of Nebraska-Omaha, an MBA from Creighton University, and a Ph.D. from the University of Nebraska-Lincoln.