Marc Faber: Stocks Will Crash 20 Percent to 30 Percent in Next Year

Friday, 11 Apr 2014 05:09 PM

By Dan Weil

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Stocks are headed for a painful tumble — one that's bigger than the 1987 crash, says Marc Faber, publisher of the Gloom, Boom & Doom Report.

The S&P 500 plunged 20 percent on October 19 of that year.

"I think it's very likely that we're seeing, in the next 12 months, an '87-type crash," he tells CNBC. "And I suspect it will be even worse."

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Stocks slumped Thursday, with the S&P 500 dropping 2.1 percent and the Nasdaq Composite sliding 3.1 percent.

The market may rebound before it takes a 20 to 30 percent nosedive, Faber predicts. But, "it's not a very good time right now to buy stocks."

The Federal Reserve's incompetence will help push stocks down, he explains.

"I believe that the market is slowly waking up to the fact that the Federal Reserve is a clueless organization. They have no idea what they're doing. And so the confidence level of investors is diminishing."

Internet and biotechnology stocks have more room to fall, Faber argues. "I think there are some groups of stocks that are highly vulnerable because they're in cuckoo land in terms of valuations."

Tech and biotech stocks led the market down Thursday. "There's been a lot of selling in these highfliers. Anything with the huge [valuations] is really getting hit," Dave Rovelli, managing director of equity trading at Canaccord Genuity brokerage, tells The Wall Street Journal.

Investors are "putting their money into safer stocks," he states.

Editor's Note: 250% Gains Bagged Using Secret Calendar (See Video)

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