THE gall of the man is amazing. Marc Faber - Captain Contrarian and Bishop of Bad News - has turned the gun on himself.
The latest issue of Mr Faber's monthly dose of depression, otherwise known as the Gloom, Boom and Doom Report, contains a damning indictment of investment professionals, including the Brigadier of Bearishness himself.
It makes worrying but refreshing reading, marking the first time in Hong Kong that any professional money-man has stopped making excuses for their dismal performance in 1994 and admitted: 'We got it wrong.' Mr Faber's initial volley said: 'Looking back on last year, I am less surprised by some of the moves of financial markets around the world than by the totally erroneous forecasts made by most of us 'financial experts'.
For example, Mr Faber said: 'Baring's strategist [Alan Butler-Henderson] was quoted as predicting that Hong Kong's Hang Seng Index may climb by 50 per cent to a record 15,000, as early as mid-1994.' He added a quotation from Asia Equity's current head of sales and research, Clive Weedon, who was then working for the Nomura Research Institute. 'No market anywhere is as attractive as Hong Kong. People who move out will live to regret it.' Indeed, a survey of 10 brokerages commissioned by Sunday Money at the start of 1994 unveiled an average figure of 13,000 points for the index by the end of the year.
But having fired one barrel at his compatriots, Mr Faber has the grace to save the second for himself.
'I should like to stress that I am not mentioning these forecasts to be trivial or to demonstrate a low regard for the forecasters in question. After all, a number of our predictions have been horrendous.' Mr Faber said the reason he was drawing attention to the issue was because 'it raises a number of questions', adding reassuringly: 'We certainly do not have any of the answers to these questions nor do we have any confidence in our own forecasting ability.' Anyone who invested their tax money on Mr Butler-Henderson's early 1994 advice would indeed be asking some serious questions.
Indeed, Mr Faber admitted to a degree of professional fear as a result of disastrous predictions.
'I feel rather like the soldier in battle whose best friend has been hit by a land mine. Happy to have escaped, yet shell-shocked by the loss of a friend and deeply concerned about how to avoid the next land mine.' Lest potential investors head for the hills and take their dollars with them, Mr Faber said 1994 was an extraordinary year, with unprecedented macroeconomic changes and surprisingly huge capital flows out of emerging markets and back to industrialised nations.
'The popularity of emerging markets reached a cyclical peak in 1994. We expect a longer period of under-performance to follow as growth expectations are scaled down,' he said.
He added: 'Under normal conditions, the recent sell-off in emerging markets would provide an excellent buying opportunity. However, these may not be normal times. Extreme caution is, therefore, now in order.' Unfortunately, as Mr Faber mentioned a few paragraphs earlier, he has absolutely no confidence in these predictions whatsoever. But at least he has the honesty to admit it.