Survival And Prosperity

Crash Prophets

Welcome to Survival And Prosperity’s “Crash Prophets” page, where the latest investment activities/recommendations of the “Crash Prophets”- Dr. Marc Faber, Jeremy Grantham, Jim Rogers, and Peter Schiff- that can be found through freely-available sources on the Internet are compiled. For the corresponding SP blog post, please select the dated link found at the end of the line of text. Please note the date represents when the activity/recommendation took place (approximately, in some cases), not the corresponding SP post was published.

(Editor’s note: I am not responsible for any personal liability, loss, or risk incurred as a consequence of the use and application, either directly or indirectly, of any information presented herein. It’s recommended that you consult with a licensed, qualified professional before making any investment decisions.)

Last updated 5/21/13

Dr. Marc Faber:

Bonds- “Bonds, which are extremely oversold, could rebound” (2/21/13); “Not hugely attractive” (3/25/12)
Bonds-Corporate- “I still have 25 per cent in equities and 25 per cent in corporate bonds.” (5/8/13); “Equity-like corporate bonds could form 25% of a portfolio” (3/25/12)
Cash- As he now predicts 100% chance of global recession, likes cash (5/25/12); “Not hugely attractive” (3/25/12)
Farmland- “Investment in remote farmland could pay off, as growing social tensions could make urban life intolerable” (3/25/12)
Precious Metals- “I bought gold at $1,400. I buy every month some gold. And I have an order to buy more at $1,300 because I want to keep an allocation towards gold- physical gold- and not stored in the United States at all times.” (5/20/13); holding some investments in gold and other precious metals was vital (2/6/13) could make up 25% of one’s portfolio (3/25/12)
Precious Metals-Gold- Maximum allocation to gold was 25% of assets (5/8/13); buys every month, sees another 10% or so decline still ahead, waits for 20% correction before adding significant stake (1/8/13); gold price going higher, own it, but get it out of the U.S. or it will be confiscated (9/14/12); “I think we’ve bottomed out” (6/7/12); says investors should own some gold, but it’s still in a correction period (5/25/12); “And I think people should own some gold” (4/2/12)
Real Estate- “Own some land and some property, not necessarily in the financial centers but in the secondary cities, is a desirable investment relatively speaking” (4/2/12); real estate in certain areas (like Asia) could be a part of one’s portfolio (3/25/12)
Real Estate-U.S.- “There is one asset class that is relatively depressed, and these are properties in the South of the United States. In Georgia, in Arizona, in Florida- I think there, property values will not collapse much more, and stabilize” (4/2/12); calls some southern U.S. housing markets “very attractive,” specifically Atlanta, Miami, and Phoenix (2/22/12)
Stocks- “I still have 25 per cent in equities and 25 per cent in corporate bonds.” (5/8/13); “I think we have made an intermediate top. And it could be a longer-term top.” (2/21/13); the higher the U.S. stock market goes “the more likely we will have a nice crash, a big time crash” (1/30/13); “Near-term, a correction is overdue” (1/25/13); “Stock markets, from the recent highs, can easily drop 20 percent” (9/28/12); “And I think people should own some equities” (4/2/12); overvalued by March through June 2012? “Big setback” second half of year? (2/2/12); could make up 25% of one’s portfolio, especially emerging markets equities (3/25/12)
Stocks-Gold Mining- “Some gold mining shares have become very very inexpensive compared to the reserves they have” (6/21/12)

Jeremy Grantham:

Bonds-”All fixed income duration is dangerously overpriced;” long-term “developed market” government bonds unattractive; “Underweight as much as you dare long-term bonds, especially higher-grade sovereign bonds.” (2/29/12)
Commodities- “In the long term, resources in the ground, forestry, and agricultural land are attractive, but come with the usual caveats of the risk of short-term over pricing, so average in.” (2/29/12)
Commodities-Agricultural- Thinks prices could come down short-term (2/29/12)
Commodities-Industrial Metals- Anticipates a falling supply in the long run (4/30/13)
Commodities-Natural Gas- “Everyone who has a brain should be thinking of how to make money on this in the longer term.” (2/29/12)
Fixed-Income Investments- “Fugetaboutit!” (3/4/13)
Real Estate-Farmland- Only moderately overpriced (3/4/13); reasonable investments can still be made (2/29/12)
Real Estate-Forestry- Only moderately overpriced (3/4/13)
Stocks-European-”Only a little expensive, but in today’s world are substantially more risky than normal” (3/4/13)
Stocks-Foreign- Emerging market stocks overpriced (3/4/13); moving closer to fair value; “Slightly overweight other global equities, which are almost fair price… In total, be about neutral in global equities” (2/29/12)
Stocks-Japan- Moderately overpriced (3/4/13)
Stocks-U.S.- Ex-quality, “brutally” overpriced (3/4/13); avoid in 2013 (10/24/12); “Materially overpriced;” “Heavily underweight U.S equities, but not the high quality quartile, which is almost fair price…”(2/29/12)
Stocks-U.S.-Metals Producers- Look promising in long-run (2/29/12)

Jim Rogers:

Agriculture- “I would rather own agriculture than anything” (2/5/13); long here more than anything else (10/17/12); “Put your money into anything related to agriculture.” (3/13/12)
Asia- Likes China and Myanmar (1/21/13); “Rogers has put his money where his mouth is and is heavily into Japan, Taiwan, China, Korea and Singapore” (3/13/12)
Asia-Myanmar- “I find it wildly exciting” (3/22/12)
Asia-North Korea- “The only way to invest is to buy the stamps or the coins. And your viewers are not going to go out and buy North Korean gold and silver coins. But that’s a fabulous, fabulous opportunity.” (2/7/13); has invested here (2/5/13)
Bonds-Government- Short long-term U.S. government bonds- main U.S. investment these days (2/7/13, 3/22/12)
Commodities- Undergoing correction, doesn’t see massive new supply coming into the markets that can keep prices down (5/17/13); maybe two-thirds of the way through commodity bull market (12/3/12); bull market continues, still long (9/7/12); mainly owns raw materials (4/25/12); long (3/22/12); “If the world economy gets better, the shortages of nearly all commodities are developing and I am going to make money in the commodities. If the world economy does not get better, they are going to print a lot more money. The place to be is in real assets…” (2/22/12)
Commodities-Cotton- Has potential (9/7/12)
Commodities-Crude Oil- When it goes down, buys more, as he thinks it’s going over $200/barrel in the coming decade (9/7/12)
Commodities-Sugar- Has potential (9/7/12)
Currencies- Predicting turmoil in currencies- “There is not a sound currency anymore” (2/5/13); owns some U.S. dollars, but owns more Swiss Francs than any other currency these days (12/23/12); long (9/7/12); owns Euro (2/22/12)
Currencies-Chinese renminbi- Interested in (2/5/13)
Currencies-Japanese yen- Thinking about buying again (2/15/13)
Currencies-Russian rubles- Interested in (2/5/13)
Currencies-U.S. dollar- “The dollar is terribly flawed, terribly flawed over the next few years, so be very careful” (6/5/12); owns U.S. dollar (2/22/12)
Energy-Crude Oil- “The surprise with oil is going to be how high it stays, and how high it goes… the International Energy Agency has done a study. The world’s known reserves of oil are in steady decline. We have to find a lot of oil or the price of oil is going to go to unheard of heights. (4/25/12); owns it (2/22/12)
Europe-Russia- Thinks single best investment opportunity right now and investing there- “I’m buying the bonds, the currency, and stocks (2/7/13); “Optimistic” on the country and noted he had invested there (2/5/13); likes Russia (1/21/13)
Industrial Metals- “Owns them all.” (2/22/12)
Precious Metals- If he were investing for grandchildren, would choose precious metals in “real assets” (1/21/13); “Precious metals are going to make a lot of money for a lot of people in the next decade (6/5/12); long (3/22/12); “I expect the precious metals bull market to last at least for several more years.” (3/20/12)
Precious Metals-Gold- Undergoing correction, might start buying more around $1,300 level (5/17/13); wouldn’t buy gold at these levels- unless they were North Korean gold coins (2/7/13); don’t sell (2/5/13); sitting and watching it (12/23/12); still bullish (9/7/12); despite recent consolidation, “I’m not selling my gold by any stretch of the imagination.” (4/25/12); doesn’t see it reaching $2,000/ounce in 2012 (2/10/12); “So I own gold. I am not selling my gold. I bought some gold on Monday a little bit. Not very much, but if gold goes down a lot, I would buy. I hope I am smart enough to buy a lot more gold. Gold is going to go much higher over the course of this decade. Do not sell your gold, not yet.” (2/22/12)
Precious Metals-Palladium- Use to protect against money printing (9/7/12)
Precious Metals-Platinum- Use to protect against money printing (9/7/12)
Precious Metals-Silver- Don’t sell (2/5/13); still bullish and likes better than gold (9/7/12); invested in (3/13/12); “Looks more attractive than gold at the moment.” (2/22/12)
Stocks- Short Apple and JPMorgan calls (2/7/13); Short (9/7/12); “I have only started to get back into stocks now, nothing serious” (3/13/12)
Stocks-China- “I hope that the Chinese market collapses so I can buy Chinese shares” (3/22/12)
Stock-Japan- Owns them (2/7/13)
Stocks-Emerging Country- Short (3/22/12)
Stocks-Technology-Short tech stocks (1/30/12)
Stocks-U.S.- Sees “serious problems” by 2014 (10/15/12); “I’m very pessimistic about the U.S. stock market” (3/22/12)

Peter Schiff:

Bonds- “On the verge of collapse” (3/18/12)
Bonds-Foreign- Likes bonds denominated in foreign currencies (1/30/12)
Bonds-U.S.- Treasuries not safe havens, don’t want to own them if you expect significant money printing down the line (6/1/12); doesn’t like long-term U.S. dollar-denominated bonds, government bonds, municipal bonds (1/30/12)
Commodities- Prices will be going higher (2/1/13)
Currencies-U.S. Dollar- The dollar is going lower (2/1/13); “Get out of dollars. Get out while you can.” (9/14/12); not a safe haven (6/1/12)”I think it could go a little higher, but ultimately I think it’s going to turn around” (5/25/12); “On the verge of collapse” (3/18/12)
Currencies-Foreign- Look at foreign currencies where governments are much less “irresponsible” (12/3/12)
Precious Metals- Personally buying gold (5/20/13); gold- May 2013 gold carnage= just a correction, speculators being flushed, but fundamentals remain the same- “It is a buying opportunity.” (5/16/13); “I think gold’s about to take off” (2/1/13); QE4 bullish for gold, buy it, as it’s still cheap (12/14/12); buy gold (9/14/12); “Maybe we’re ready to have another move up in gold” (5/25/12); thinks gold prices not going to collapse, thinks “they’re going to rise and make new highs” (4/22/12); likes gold (1/30/12, 2/7/12); Fed money printing “will basically put a rocket ship beneath gold prices” (3/18/12)
Precious Metals-Silver- QE4 bullish for silver (12/14/12); sees “incredible opportunity” now in silver (10/1/12); buy silver (9/14/12); likes silver (1/30/12)
Real Estate- Fed creating another housing bubble (3/1/13)
Stocks-U.S.- Sees “downside risk in the near-term,” but predicts another round of quantitative easing and the stock market to “turn up again” (5/25/12)
Stocks-Foreign- Looks at other stock markets where you might have some real growth (12/14/12); “Own stocks outside the United States, in currencies with dividends and income that are not U.S. dollars.” (9/14/12); likes high dividend-paying foreign stocks (1/30/12)
Stocks-Gold- May have a bottom in gold stocks (5/25/12); real investment opportunity (4/22/12)

Vice President Dick Cheney says that his boss, President George W. Bush, has no need to apologize to the American people for not doing more to head off the financial calamity, saying no one saw the crisis coming.

During an interview Thursday with The Associated Press in his West Wing office, Cheney defended the administration’s performance on an economy that is growing weaker daily and which recently collapsed in spectacular fashion. Cheney said that “nobody anywhere was smart enough to figure it out.”

-Associated Press, January 8, 2009

(Editor’s note: Italics added for emphasis)

Who are the “Crash Prophets?”

Contrary to the former Vice President’s assertions, a small number of individuals did see the current economic crisis coming. Among them were prominent investors, advisors, and money managers who, despite being ridiculed by their so-called “peers,” bravely warned others that a financial storm was coming. Perhaps their now-discredited colleagues should have known better, for these same persons also have impressive track records when it comes to calling the markets. Today, the “Crash Prophets” are positioning their or their clients’ money and continue to share their insights for what they see is more financial turbulence ahead. The “Crash Prophets” include:

Dr. Marc Faber

• Head of Marc Faber Limited, where he serves in the capacity of investment advisor and fund manager
• Labeled “Doctor Doom” by the press for his contrarian investment style that is often interpreted as being bearish
• Famous for advising clients to get out of the U.S. stock market one week before the October 1987 crash and for predicting the 2008 global financial crisis
• Correctly forecast the rise of commodities, emerging markets, and China in the 2000s, as well as the decline of the U.S. dollar
• Called the March 2009 U.S. stock market bottom and subsequent rally
• Publishes the monthly investment newsletter The Gloom Boom & Doom Report and is the author of several books. Dr. Faber also contributes regularly to several leading financial publications around the world.
• Website: www.gloomboomdoom.com

Jeremy Grantham

• Founder and former chairman of Grantham, Mayo, Van Otterloo & Co. (GMO), a privately-held global investment firm with $106 billion under management as of June 30, 2011. Currently GMO’s chief investment strategist.
• Grantham started one of the world’s first index funds in the early 1970s
• In 1982, said the U.S. stock market was ripe for a “major rally.” That year was the beginning of the longest bull run ever.
• In 1989, called the top of the Japanese bubble economy
• In 1991, predicted the resurgence of U.S. large cap stocks
• In 2000, correctly called the rallies in U.S. small cap and value stocks
• In January 2000, warned of an impending crash in technology stocks, which took place two months later
• Saw the 2008 global financial crisis coming. In April 2007, said we are now seeing the first worldwide bubble in history covering all asset classes.
• Individual clients have included former U.S. Vice President Dick Cheney and former U.S. presidential candidate John Kerry
• Writes quarterly investment letter on GMO website
• Website: www.gmo.com

Jim Rogers

• CEO of Rogers Holdings and Beeland Interests, Inc.
• While seen as a commodities “guru” by many, his accomplishments reveal he is a “jack of all trades” in the world of finance and investing- investor, author, financial commentator, instructor
• Co-founded the Quantum Fund, one of the first truly international funds, with George Soros in 1970. Over the next 10 years, the fund gained 4,200% while the S&P advanced 47%.
• In 1980, he “retired” at age 37 and rode a motorcycle around the world. Subsequent record-breaking travels and a profound global awareness contributed significantly to his investment strategy and books.
• In 1998, created the Rogers International Commodities Index (RICI)
• Predicted commodities rally that began in 1999
• In 2006, anticipated the coming crisis and shorted U.S. financial institutions, home builders, and mortgage lender Fannie Mae
• In December 2007, sold his New York City mansion for $16 million and moved with his family to Singapore. Sees the world’s financial center shifting from West to East, with China at the forefront.
• Correctly called the 2008 global financial crisis
• In February 2011, announced the Rogers Global Resources Equity Index, which tracks the price of a basket of leading natural resources shares (agriculture, mining, metals and energy sectors, as well as solar, wind, and hydro)
• Website: www.jimrogers.com

Peter Schiff

• CEO and Chief Global Strategist of Euro Pacific Capital, and CEO of Euro Pacific Precious Metals, LLC
• Like Faber, labeled “Dr. Doom” by the press for being bearish on the U.S. economy, the U.S. dollar, and dollar-denominated assets
• Predicted 2008 financial crisis
• In late 2006, gained notoriety for not only predicting the U.S. housing bubble and resulting subprime mortgage crisis but for challenging various housing bulls on a number of financial news shows
• In 2008, served as an economic adviser to Congressman Ron Paul’s 2008 presidential campaign
• In late 2008, predicted the automotive industry crisis and the crisis in the banking and financial markets
• Schiff’s popularity grew when a YouTube.com video entitled “Peter Schiff Was Right” became popular in late 2008 and 2009. The video is a compilation of clips of his many appearances on various financial news programs from 2005 to 2007.
• Hosts The Peter Schiff Show (www.schiffradio.com) radio program and The Schiff Report YouTube video blog (www.youtube.com/user/SchiffReport)
• Websites: www.europac.net, www.europacmetals.com