Marc Faber Says Stocks Have Likely Peaked for 2009

By Patrick Rial and Paul Gordon

Sept. 25 (Bloomberg) -- Stocks may have already peaked for this year and might drop 20 percent, Marc Faber, the publisher of the Gloom, Boom & Doom report, said today in an interview with Bloomberg Television.

The dollar is likely to rebound from an “oversold” position, which will be negative for equities, Faber said on the sidelines of CLSA Ltd.’s annual investor conference in Hong Kong.

“I wouldn’t be surprised if we’d seen the peak of the market for this year because the economic news isn’t going to improve very much,” Faber, 63, said.

The investor predicted on March 9 in a Bloomberg interview that equities would rally because of government stimulus measures. The Standard & Poor’s 500 Index dropped to a 12-year low that day and has since climbed 55 percent. The MSCI World Index rallied 63 percent in that time.

Official comments have been mixed even as economies around the world emerged from recession. Federal Reserve Chairman Ben S. Bernanke said on Sept. 15 that the U.S. recession is “very likely” over, while warning that growth may not be strong enough to quickly reduce unemployment. The Bank of Japan upgraded its assessment of the economy on Sept. 17 though said it remained concerned about the strength of the recovery.

Faber predicted today that gold “should correct” like equities. Gold futures rose above $1,000 an ounce for the first time in seven months on Sept. 11.

“We probably had a false breakout on the upside,” Faber said. “I wouldn’t be surprised to see a little bit more of a correction down to maybe $920 per ounce.”

Faber expects the dollar to rally as concerns about deflation prompt risk-averse investors to repatriate funds back to the U.S. The Dollar Index has slumped 8.4 percent in the past six months amid speculation investors are using borrowed dollars to fund asset purchases in other countries.

To contact the reporters on this story: Patrick Rial in Hong Kong at prial@bloomberg.net; Paul Gordon in Hong Kong at Pgordon6@bloomberg.net.