Tags: Faber | tech | Nasdaq | Fed

Faber Unimpressed By Gains in Nasdaq

Friday, 18 Oct 2013 08:30 AM

By Dan Weil

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While the Nasdaq Composite Index has outperformed the Standard & Poor's 500 Index and the Dow Jones Industrial Average this year, Marc Faber, publisher of the Gloom Boom & Doom Report, is unmoved.

"There are very few tech stocks that have made new highs," he tells CNBC and Yahoo's Talking Numbers.

"Microsoft, Cisco, Intel, IBM are all way below their previous highs. The Nasdaq is being driven by the Netflix of this world, Amazon, Facebook and so forth — mostly stocks that have actually no earnings. So, they can go to any price level."

Editor’s Note:
5 Reasons Stocks Will Collapse . . .

That makes Faber afraid to short those names. "I don't want to short these kinds of shares, because if you have no earnings, who knows what the peak is?" he asks.

Meanwhile, the Federal Reserve is creating bubbles in stocks and other assets by keeping interest rates artificially low, Faber argues.

"How are you going to value a Warhol painting or a Picasso if interest rates are at zero? How are you going to value stocks when interest rates are at zero? You create a complete mispricing of everything in the system."

But it won't last forever, Faber maintains. And, "it will not end well."

"The markets will eventually completely destroy the Federal Reserve."

Meanwhile, stocks in general might fall as a result of the budget/debt ceiling saga in Washington, says BlackRock CEO Laurence Fink.

"We are going to see a lower equity market and a longer period of lower rates" if corporate earnings slump in the fourth quarter as a result of Washington's trials and tribulations, he tells Bloomberg.

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

Related Stories:

Faber: Apple 'Could Go Bust'

Strategist Cohen: Earnings, Revenue Are the Real Obstacles Facing Stocks

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