Tags: Faber | 20% | decline | bed

Marc Faber: ‘Don’t Get Out of Bed’ if You Can’t Take a 20% Decline

Wednesday, 24 Oct 2012 09:36 AM

By Michael Kling

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Stocks could drop 20 percent from their recent highs, says Marc Faber, publisher of the Gloom, Boom and Doom Report.

"I believe globally we are faced with slowing economies and disappointing corporate profits, and I will not be surprised to see the Dow Jones, the S&P, the major indices, down from the recent highs by say 20 percent," Faber told CNBC.

"That is not a big decline. If you can't take a 20 percent decline, don't get out of your bed in the morning."

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

Faber noted that the S&P 500 has rallied this year, surpassing 1,470 in September.

"The markets have rallied hugely. They are not that depressed."

Faber also told CNBC that he believes monetary stimulus is not working. "It may have side effects and unintended consequences, but it is not empirically proven that if you throw money at the system you solve any problems."

Lackluster corporate earnings reports and worries about Spain's pitiable economy and large sovereign debt have caused stocks to fall recently, with the Dow Jones recently to its lowest level in seven weeks.

Revenue is down for over half the companies reporting financial results so far, J.J. Kinahan, a derivatives strategist for TD Ameritrade, according to NBC News.

“That’s high. Clearly people, and companies, are not spending at a pace we would like to see,” he said

"The writing has been on the wall for a while. It's a very tough environment. It's tough to generate new revenues so it shouldn't be too big a surprise we are having people miss on that front," Peter Jankovskis, co-chief investment officer at OakBrook Investments, told NBC.

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

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