Legendary investor Marc Faber spoke with Bloomberg’s Rishaad Salamat yesterday about his 2009 global economic outlook and his investment strategy going forward. Notable excerpts from the interview included:

I think we are faced with a global recession that will last a very long time. I mean, I think a recovery will not come for the next couple of years— maybe in five, ten years time. But I really don’t see a catalyst that would propel economic growth to a higher rate. I think we’ll fall sharply like we fell in economic activity in October, November, early December. And we’ll be at the bottom of the valley for quite some time, and maybe we’ll go even lower. I think 2009 is going to be a catastrophe, economically speaking…

Well, I personally, I think that the Chinese economy will suffer very badly. They’ll have a bad recession. And I also think that politically in the world, geopolitically, we have tensions coming up. And so I would be trading Chinese stocks— maybe you buy them here and you resell them like other emerging economy stock markets that have underperformed the U.S. over the last 14 months. Since the market peaked in November 2007, the emerging markets and those of commodities have been hammered. And so the rebound may occur there more than, say, in the United States. But, as I said, look at it as a trading opportunity…

Well, I continue to like gold. And, at the present time, what is very depressed compared to physical gold are gold miners— the exploration companies. I would also say that oil at around this level is becoming attractive, and that oil companies are reasonably attractive. So these are the investments I would carry out at the present time. And the big mining companies— CVRD, Rio Tinto, BHP, and larger gold producing companies like Newmont. But after their very strong rebound I think we have to wait for a correction…

Well, again, I think the dollar is a disastrous currency. But the others are not much better. The Swiss franc is not the Swiss franc we had in the 1950s. It’s quality has gone down very substantially. And the Fed, by pursuing this zero interest rate policy, that leads essentially to dollar weakness, it’s to some extent a trade war. You cheapen your currency, so you export problems to somebody else. But since the whole world is engaged in trying to lower the value of their currencies, it may very well happen that all currencies lose value against, say, hard currencies like precious metals, silver, platinum, gold.

You can view the 13 minute 41 second interview here.

Source:

Marc Faber Interview
Bloomberg, December 22, 2008

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