Dr. Doom? Marc Faber sees opportunity
The contrarian investor says that a variety of asset classes may be worth buying for short-term gains.
The dean of doom, Marc Faber, told CNBC on Tuesday that a variety of asset classes -- including equities -- may be worth buying for short-term gains.
In the midst of market volatility on concerns over Federal Reserve tapering, he said, "Treasury bonds, gold and equity markets are oversold in the near-term and they can rebound for the next 10 days or even the next month."
But beyond that, he sounded more like the author of "The Gloom, Boom & Doom Report."
"The best course of action is to actually not buy anything, but rather to reduce positions on a rebound," Faber said.
The S&P 500 (SPX) could "rebound to around 1,630-1,640" in the short-term, Faber added, but warned the index could drop 20% to 30% from its all-time intraday high on May 22 of 1,687.
Also known as "Dr. Doom," Faber said that new highs in emerging markets were unlikely, and he did not see any buying opportunities in emerging markets, yet.
New highs in emerging markets and in high yield bonds are out of the question, and if it happened in the S&P, which I don't believe, it would be driven by very few stocks. Longer term, the market is far from oversold. It still has considerable downside risk everywhere," he said.
"The economy will weaken and not strengthen globally because if you look at where the growth came from over the last 10 years, it came almost 80% from emerging economies. These are not growing now and corporate profits will come under pressure, and that will have an impact on Western European companies and U.S. multinationals," he added.
"I don't see any buying opportunity from a longer-term perspective yet. Short term some of them are very oversold because they dropped 20% or more, so they can rebound, but from a long-term perspective I think they'll still move lower."
He said that if he looked around as a trader, he would rather buy the 10-year U.S. Treasury "which is very oversold, where everyone is bearish and where sentiment is terrible" rather than the S&P "where everyone is still relatively optimistic."
More from CNBC
I love it when I read something that confirms what I am doing. Although I would not touch Treasuries with a 10 foot pole. I am watching the ETF TBF trying to decide when to start a short on Treasuries.
I believe the next bubble will be Treasuries. The party will end soon, I'm just not sure when.
We can't even cut the waste in the foodstamp program approx. 3% without the dems saying the children and the old will suffer when in fact it will probably only affect those who shouldn't be getting the benifit in the first place.Farmers in the FARM BILL are actually taking a 10% haircut in the safety net of the farm bill.
Copyright © 2014 Microsoft. All rights reserved.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.