Marc Faber: Bull in the short term, bear in the long term

It can be tough to sift through the rubble of the most recent market carnage to find buying opportunities, so perhaps it’s best left to someone who has historically said “sell.” Marc Faber, author of the ”The Gloom, Boom & Doom Report,” and often called “Dr. Doom” because of his bearish sentiment, says there are buying opportunities — at least in the short term. He told CNBC Tuesday morning:

“Near term, Treasury bonds, gold and equity markets are oversold and they can rebound for, say, the next ten days or even the next month. New highs in emerging markets and high yield bonds, out of the question.”

Faber told MarketWatch Monday that in a deflationary environment, he would prefer gold to government bonds and equities.
But he hasn’t ruled out government debt yet. He said if he was a trader he would be trading Treasurys over equities (in contrast to BlackRock, which said the opposite yesterday). Here is why:

“As a trade, I would rather buy the 10-year U.S. Treasury, which is very oversold, where everybody is bearish, where sentiment is terrible, compared with the S&P, where sentiment is still relatively optimistic.”

He noted that he expects the 10-year Treasury note yield 10_YEAR , which is currently trading at 2.50% Tuesday, to end the year around this level, or slightly higher, but not before dipping back down to about 2.20%.
That outlook on the 10-year note seems to embody his longer-term outlook on the markets: while some markets are oversold in the short term following signals from the Federal Reserve that it may act to wind down its bond-purchase program later this year, markets as a whole are still overbought in the long term. In that sense, he appears to have retained his bearish sentiment. Here he is on CNBC again:

“Longer term, the market is far from oversold. It still has considerable downside risk everywhere.”