Marc Faber expects India’s Prime Minister Narendra Modi to be re-elected in 2019 on the back of the development agenda, the renowned investor said in an interview with ET Now on Thursday, further reposing his faith in a government which he sees as being capable to implement reforms. Earlier last month, in an interview with CNBC TV18, renowned investor Marc Faber — the author of Gloom, Boom & Doom report — had reinforced his preference for investing in India over the US on the back of a strong government led by Prime Minister Narendra Modi, whom he had referred to as “a leader (who) is gradually implementing reforms against the opposition from vested interests and corrupt government officials”.
Marc Faber, who is usually bullish on Indian equity markets for very long term in comparison to the US markets, said on Thursday that he expects Indian markets to outperform the Dow Jones index in the current year 2017 as well. Over the past couple of years, Marc Faber, also known as Dr Doom, has reiterated his belief that the Indian equity markets will outperform the US markets over the next 10 years.
However, today, Marc Faber said he has turned cautious on Indian equities given the recent run up, and is not adding any further to his Indian positions as valuations look stretched at the moment. He said he now believes that that the Indian equities are expensive. Further, the veteran investor did not rule out a ‘healthy’ correction at these levels, saying that a further rally may lead to a market bubble.
Marc Faber believes that currently, the Index looks stretched. This is not the first time that he has raised concerns about the top Nifty stocks. In the CNBC TV18 interview last month, Marc Faber pointed out to the valuations of individual stocks which have high P/E multiple ratios of 50x or above. “Some Indian valuations are around 50 times the earnings, which I would regard to be on the high side,” he had said then.
Though, Marc Faber said he sees an opportunity in select mid-cap space. Reiterating his preference for India as an investment destination, he said that the long-term trends in India remain constructive.
Marc Faber is not a believer in the rally in the US stock markets, and is openly opposed to the US President Donald Trump’s ideas. “Don’t be overly optimistic,” Marc Faber said in an interview to CNBC television recently. Just before that, Donald Trump had tweeted: “Highest Stock Market EVER, best economic numbers in years, unemployment lowest in 17 years, wages raising, border secure, S.C.: No WH chaos!”
However, Marc Faber, as usual, was unimpressed. “If you look at the markets, there are lots of stocks that are lower, and significantly lower than they were at the highs. And so, it’s not an all-clear signal,” he said, adding that the risks have increased. Today, he told ET Now that the Dow rally has thin support.