Marc Faber is a contrarian. To be a good contrarian,
you need to know what you are contrary about. It helps to be a worldclass
economist-historian, to have been a trader and Managing Director of Drexel
Burnham Lambert when the firm was the junk bond king of Wall Street, to
have lived in Hong Kong for a quarter of a century, and to have a contact
book crammed with the home numbers of many of the movers and shakers in
the financial world.
Famous for his contrarian approach to investing, Marc Faber does not run
with the bulls or bait the bears but steers his own course through the
maelstrom of international finance markets. In 1987 he warned his clients
to cash out before Black Monday in Wall Street; he made them handsome
profits by forecasting the burst in the Japanese Bubble in 1990; he correctly
predicted the collapse in US gaming stocks in 1993; and he foresaw the
AsiaPacific financial crisis of 1997/98 and the resulting global volatility.
Nury Vittachi writes in "Riding the Millennial Storm":
Faber has style. A ski racer in his youth, he remains a flamboyant character.
He plays to the press, who call him Dr Doom; his monthy newsletter, always
an excellent read, is called 'The Gloom, Boom and Doom Report'. He wears
a ponytail, in defiance of the expectation (in Asia, especially) that
investment managers should look conventional. His book, The Great Money
Illusion, written in a hurry after the 1987 crash, was dedicated "to many
beautiful and kind women whose names are better kept confidential".
His office is eclectic. Nineteenthcentury oil paintings of Hong
Kong and Macau, mingle with Korean paintings, an amazing collection
of Mao memorabilia (including one white alabaster statue with a red
scarf tied round its neck), an ancient horned gramophone with old
Chinese records, soft flufly yellow toys and a china polar bear, bottles
of XO brandy and cases of Grolsch beer. He has a superb library of
first editions of works on economics and stockmarket cycles in a variety
of European languages, being a multilingual Swiss and a collection
of a quarter of a million Mao badges.
What he says is usually impeccably well argued, but
it is the delivery which makes him so sought after as a speaker: he is
a master of rhetoric, and of vivid everyday examples, and the very dry
sense of humour and the heavy Swiss accent provide an irresistible mix.
(He describes his own writing as 'SwissGerman pidgin English, but is actually
one of the most articulate and grammatical people I know.)
It is amazing how much vitriol the mention of Faber's name can generate
mainly from traders with a limited sense of historical perspective. He
is well aware of this reaction. Back in 1987, he wrote: 'No one likes
a party spoiler, and as long as the stockmarket orgy goes on the pessimists
are shunned almost as badly as AIDS carriers.' The more intelligent professionals
around town give him considerably more respect even when they don't understand
the detail of his operations. Some assume that he says one thing and invests
differently. Other people assume he is a simplistic and publicityseeking
contrarian. A large number think of him as 'Dr Doom', the congenital pessimist.
He plays up this image, or is at least amused by it and lets it run.
What do others say?
"One does not go to see Marc Faber, Hong Kong's iconoclastic share pundit, in the expectation of good news. But after listening to him, no investor could claim he had not been warned. For Faber, a blunt-spoken Swiss, says the things nobody want to hear..."
The Sunday Times (London)
"(Faber) is the region's (Asia's) most notorious bear."
The Wall Street Journal
"(Faber) is something of an icon."
The Financial Times (London)
"Marc Faber, congential contrarian and shrewd Swiss investment advisor..."
The lighter side of Dr. Doom
Magic mushrooms for breakfast
A 1998 South China Morning Post polled public figures in Hong Kong with the question, 'Have you ever taken Cannabis?' Cannabis is illegual but not uncommon in Hong Kong, and freely available in many countries around South-East Asia. Most people said no, or refused to be quoted. Faber was as usual more straightforward and more confident: 'Naturally, I have smoked a lot of marijuana, but for breakfast I prefer omelette of Balinese mushrooms.
The bar index or how to judge if a market is overvalued (January 1998)
In Thailand 4 beers for me and 8 beers for the girls cost USD 40. In Wanchai - Hong Kong's red light district - a lady's drink alone costs already USD 40. Meaning Hong Kong is just too expensive.
Favourites (Bull & Bear, Fourth Quarter 1997)
Saying: Being bi-sexual doubles your chances of a date on Saturday night
Motto: Follow the course opposite to custom and you will almost always be right.
Cocktail recipe: Chew fresh Peruvian cocoa leaves, after 10 minutes take two ecstasy pills, after one hour smoke some Laotian hillside marrijuana, finish off with a bottle of Petrus.
Sports team: I am a member of the Eskimo waterballet team and a former member of the Swiss National Alpine Ski Team.