Financial media talking heads can’t help themselves. They can’t stop making fun of Marc Faber’s view by pointing out how wrong he has been over the last few years. Here is what most people don’t realize. There is a difference between being wrong and being too early. Something I have experienced firsthand after predicting the 2007-2009 meltdown as far back as 2005.
Marc is not wrong, he is early and we are working under the conditions where a bubble can be expanded much further than most “rational” people would believe. That is the environment today.
With that in mind, think about it in the following fashion. Should the S&P correct just 30% here, something that wouldn’t even bring today’s valuations back to their historical norms, it would wipe out the last 4 years of capital gains. Pardon me, the first time the S&P saw the 1,400 level was in 1999. So, it would wipe out 16 years of market progress. It all depends on your perspective.
