Marc Faber’s trust in Narendra Modi ‘Trumps’ US, even as Dr Doom turns cautious on Indian equities

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Published: July 28, 2017 2:12:47 PM

Marc Faber reiterated his preference for investing in India over the US on the back of a strong government led by Prime Minister Narendra Modi, while calling the US government corrupt, in an interview to CNBC TV18.

Marc Faber has reiterated his preference for investing in India over the US on the back of a strong government led by Prime Minister Narendra Modi.

Marc Faber’s hatred for the US stock markets and his love for Indian equities is not a secret. On Friday, he reinforced his preference for investing in India over the US on the back of a strong government led by Prime Minister Narendra Modi. Not only this, renowned investor Marc Faber — the author of Gloom, Boom & Doom report — also described the US government as “corrupt like hell”, adding to his list of strong phrases to refer to the western administration. Earlier this year, he had used the phrase “rotten western democracies” while citing his preference to invest in India over the US markets.

“If you put a gun to my head and ask me should I invest in a country like the US with the kind of government they have — corrupt like hell, or should I invest in India, which has now-a-days a leader (who) is gradually implementing reforms against the opposition from vested interests and corrupt government officials… then for the next 10 years I would rather invest in India than the US,” Marc Faber said in an interview to CNBC TV18 on Friday, even as he sounded a note of caution over valuations after the recent run up.

Marc Faber reiterated his belief that the Indian equity markets will outperform the US markets over the next 10 years. “As you may have realised, I have always had some investments in India,” he said in the interview, adding that he still maintains what he had said in April 2016 that in the next 10 years India market will outperform the US.

However, at the same time, he expressed concerns over the Indian markets in the short term, citing the recent rally and the rapid run up, and saying that the markets were attractive when the Sensex was at 23,000-24,000 points last year. “Since the lows, the index is up 42% and we are probably on the high side. The market was attractive when it was at 23,000-24,000. We have gone up to 32,000. I don’t think the market is particularly attractive,” Marc Faber said.

Further, he also raised concerns on the valuations of individual stocks which have high P/E multiple ratios of 50x or above. Marc Faber said that a lot of things have to fall in place perfectly to buy those stocks at so high valuations, and that he would rather stay away from such shares.

Earlier last month, Marc Faber had made a dire prediction for the stock market, saying that it may fall by as much as 40% or even more. In an interview to CNBC television, Marc Faber had said that the stock market could see another ‘lurch’ higher, but then the investors may want to cash out and run for cover.

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