When investment guru Robert Prechter recently predicted that the Dow Jones Industrial Average will drop to 1,000, many dismissed him as being very unrealistic.
After all, that would be a 90 percent drop from the recent level of 10,680.
Not so fast, says fellow investment icon Marc Faber.
In his newsletter, "The Gloom, Boom & Doom Report," Faber points out that people also rolled their eyes at Prechter in 1978, when he predicted the Dow would more than double to 2,300, CNBC reports.
"Prechter is right when he says that when manias come to an end, prices tend to retreat to where the mania started,” Faber writes.
“So from this point of view, a Dow Jones at 1,000 should not be excluded."
The implications of Dow 1,000 will be positive for one industry – printing, Faber says. “Does anyone really think that the money printing presses won't run 24 hours a day?”
Faber has an interesting suggestion for investors if the plunge comes to pass.
With tongue apparently in cheek, he says buy a farm you can tend to yourself way out in the boondocks. And protect it with high voltage fences, barbed wire, booby traps, military weapons and Dobermans.
Star economist David Rosenberg is bearish on stocks too, though he sees them as “only” 20 percent overvalued.
“The market is overbought, and there is a renewed sense of complacency that could get shattered pretty quickly,” he told Yahoo’s Tech Ticker.
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