Tags: Faber | stocks | plunge | cash

Marc Faber: Stocks Headed for 20% Drop

Friday, 05 Oct 2012 08:28 AM

By Dan Weil

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Marc Faber, publisher of the Doom Boom & Gloom report, says the stock market has peaked and is set for a plunge, which will present a buying opportunity.

The economy isn’t uniformly weak, but equities have risen a long way in a short period, he notes. The Standard & Poor’s 500 Index has surged 6.9 percent in the last three months.

Faber tells CNBC that he has been lightening his stock positions since April.

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

"I just want to have a lot of cash, because I think that within the next six to nine months we can buy just about anything 20 percent lower than it is now."

Among the stocks that are overdone is Apple, Faber says. The company’s shares have generated a sizzling total return of 62 percent so far this year.

Another expert who sees stocks as ripe for a correction is Sean Clark, chief investment officer of Clark Capital Management Group. "We've just come too far, too fast," he tells CNNMoney.

He anticipates a 5 to 10 percent stock slide in the next month alone, as investors sell ahead of the election.

Now that the Federal Reserve and European Central Bank have announced their latest easing programs, there is no new source of support for stocks, Clark says.

Then there’s the fiscal cliff. While neither Congress nor President Barack Obama is reckless enough to drive over the edge, “we still could see a lot of political drama and market volatility," Clark says.

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

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