Dr Marc Faber is considered one of the world's premier economists and stock market investors. Known for his "contrarian" investment approach, Dr Faber is renowned for his timely market predictions. He is also the author of the Amazon best seller "Tomorrow's Gold" and publisher of the widely read Gloom Boom and Doom report.
"Jawaharlal Nehru (1889 - 1964) who was an Indian anti-colonial nationalist and the first Prime Minister of India from 1947 to 1964 wrote that, “Life is like a game of cards. The hand that is dealt you represents determinism; the way you play it is freewill.”
About determinism I have some doubts, but I very much agree that the way we play our lives depends on our free will. Since I am about to write about life and living a meaningful life, I need to give you, my readers, some background about me. My name is Marc Faber and I was born in Zurich (Switzerland) in 1946. My grandparents on my mother’s side (Odermatt) were from the oldest part of Switzerland. My grandfather Adelbert Odermatt was a pioneer of winter sports. In 1910 he built a large hotel in Engelberg, and one of the world’s first funiculars and later a cable car. In the late sixties, one of my uncles then built a cable car to the Titlis, which is world-famous, because while climbing to the mountain top, the gondola rotates by 360 degrees so the passengers can enjoy the entire panoramic view. My great-grandfather had built a transport business in the 19th century, which consisted of distributing goods around the mountain valleys along the lake of Luzern. By the age of 13, my grandfather was working as a carriage driver taking tourists from the Luzern area to the mountain village of Engleberg to enjoy the mountain air, and rock and ice-climbing during the summer. But when the local government approved the construction of a mountain train to Engelberg, he realized the future potential for tourism and he built a large hotel right opposite Engelberg train station, and a little later a funicular for people to enjoy the scenery in summer and in winter time for sledging and bobsleigh races. With Fritz Feierabend, who had invented an all-steel bobsleigh, he became world champion in the 1930s. He also participated at the 1932 winter Olympics in Lake Placid. Skiing was not known to the Swiss or Austrians until British soldiers, who had been training in Norway, brought skis to Switzerland at the beginning of the 20th century. But once skis were introduced it led to a winter skiing boom, and countless cable cars were built to transport the skiers up the hill. My grandmother who also came from the same area, spoke and wrote perfectly in five languages and basically ran the entire hotel while my grandfather was drinking and sledging with the guests.
In the early part of the 20th century, the mountain hotel industry was very different from what it is today. The hotel owners received the guests, and I still remember how after dinner in the “family dining room” my grandparents went to the guest dining room and greeted each table and briefly chatted with the guests. At least once or twice a week, games were organised because in absence of movies and music, the hotels needed to provide some entertainment. On the ground floor there was a large bar where orchestras would play music for dancing. One of the bands who played in the early '50s were the Teddies whose band leader was Teddy Stauffer who later developed Acapulco as a holiday destination (he became an international celebrity as Mr. Acapulco) and was briefly married to actresses Faith Domergue and Hedy Lamarr.
People who live in small mountain villages are fiercely independent and conservative. In the absence of any social security until 1948, people were fully self-dependent. If someone became sick or had an accident, the family looked after him. Engelberg had a doctor (the brother of my grandfather), but my father who was a famous orthopaedic surgeon in Zurich always warned us not to go close to his practice.
My Engelberg grandparents had four daughters. My mother was the eldest. She was educated at the monastery school and later at a Catholic boarding school near Montreux. Like her mother she was an excellent mountain climber and she was also a member of the Swiss Ski team. In the 1930s, she travelled extensively around the world, and in the US as a personal assistant to a wealthy American lady. She was very impressed how nicely American men treated their wives (certainly compared with Swiss men). Her marriage to my father did not last long, which I now understand. Both of them were completely unsuited to married life. My parents divorced when I was four but I did not know about it until I was 14 because after the divorce my mother, my brother and I moved to Geneva in the French speaking part of Switzerland.
Like her parents, my mother worked hard all her life. Although we always had a full-time maid, my mother had to look after the household, work as a tourist guide since she also spoke five languages, and was always concerned about her two sons’ education, health and skiing. We lived in an area where many UN employees and consuls lived and I remember well how when I was about 6 years old the daughter of the Portuguese consul invited me to her birthday at their house. I felt terribly embarrassed and shy but my mother brought me there and I somehow survived what I considered to be an ordeal (later, at school and university and after that in my professional life, I frequently went or had to go to parties, but I never felt particularly comfortable. My comfort zone is being alone in smoked-filled, sleazy bars in the world’s red-light districts).
When I think about these early days of my life, I think that we had a happy youth. My mother received about $1000 per month from my father but with her own earnings we could live a comfortable but modest life. Initially, we spent our holidays with my cousins at my grandfather’s hotel but after his death we no longer went there but to Zermatt. Soon after moving to Geneva, my mother bought a car and every weekend we went on an excursion, in winter skiing in France and in summer picnics in the countryside or to the lake to swim.
Although we never talked about money, I could see that my mother was very careful to spend money wisely. Each day, before going to school, my mother gave me 15 cents for a croissant. Usually, I did not buy the croissant but saved the money. By her birthday, I had enough money to buy her a beautiful small doormat for the entrance of our apartment. She was very touched.
When going skiing, my mother always prepared a picnic, so we would not need to pay for lunch in a restaurant. Equally, when we ate at home, and if there were left-overs, we packed them in small boxes, put them in the fridge and then warmed them all up for a meal once a week. What we were served on our plates, we had to finish eating. And when our clothes were damaged, my mother - having been brought up by Catholic nuns - would repair them perfectly. In the meantime, my grandmothers knitted our ski socks and pullovers. I believe this frugality and modest upbringing has stayed with me all my life.
After five years in Geneva where I attended primary school in French, we moved back to Zurich. My brother and I were devastated because we had such a pleasant life in Geneva where we also had very close friends. The two sons of the baker who had a shop on the front side of the apartment building where we stayed were particularly good friends, and there I saw for the first time in my life what hard work meant. The father, the baker, would get up at 4am, bake fresh bread and then sell it with his wife in the shop they rented. I also learned early on that one should never trust our closest friends entirely. I had begun collecting stamps early on because my Engelberg grandparents had entire wooden boxes full of stamps from all over the world. They also had entire blocks of stamps that had already expired (yearly Switzerland would issue stamps that were only valid for that particular calendar year), but gained in block form significant value. My “good” friends exchanged them with me for some worthless African stamps that had however beautiful pictures. Much later, when I realised what a lousy trade I had done, I did not feel bad but thought that I would have done the same, had I had superior knowledge of value than my stamp collecting friends. At my friends’ apartment I also learned how to play Monopoly, which I loved.
My mother, however, wanted to move back to Zurich so we the children would be closer to our father and paternal grandparents. This is what our mother told us but who knows, there may have been other reasons as well.
Back in Zurich, life was initially rather tough. Not speaking a word of German, school was difficult at first and the other school children regularly beat me up because they thought that I was a “fremde Fötzel” (a foreign scoundrel), when in fact my mother’s family was one of Switzerland’s oldest families, which we could trace to the 14th century. I got a lucky strike in a fight when I landed my right hand accidentally right into the face of my opponent and he fell unconscious for a few minutes. After that we became close friends and if I have one regret it is that we lost touch with each other when I went to the Gymnasium. I had no violent character at all but although my older brother and I got along famously, he was hot-tempered and beat me up from time to time with such violence that I still feel the pain nowadays when I think about it. I never complained because I knew very well that I had deliberately irritated and provoked him into a rage.
In the building where we lived there was a well-to-do family with two sons. We became good friends and one of them convinced me to join the boy scouts. I was too young but we faked my age and so at the age of nine, I joined the group, and I have to say that this was an enormously gratifying life experience. It was at times extremely tough but I learned a lot about camaraderie, about surviving in forests and mountains, building tents, lightening a fire with just three matches (difficult when it rains heavily), tying nots, abseiling, and finding your way with just a compass and a map that only indicated the topography of the environment.
Upon returning to Zurich we saw our father about once a month for dinner at his apartment. He was a very successful surgeon, which enabled him to buy a house on the shore of the Zurich Lake where we also spent weekends. We also spent a lot of time during holidays at my Faber paternal grandparents’ house near Zurich. This must have been a truly cultural shock for them since they were both extremely conservative, decent, and God-fearing people. At first, we were not allowed to play badminton in their garden on Sundays. Later, my uncle (brother of my father and extremely good looking) who had become a very successful executive at Geigy (nowadays Novartis) and who was some sort of a playboy and bon-vivant, told his parents to shape up and let us play and work as well on Sundays. Life was nice at my grandparents’ house because they had two maids and my grandmother started to cook lunch at 9.30 in the morning. My grandfather had just retired as a hydraulic engineer from Brown Boveri (now part of ABB) and he had large well-equipped workshop next to the garage. At about the same time, my brother who spent his time reading history books and hated playing games with other children, had read about the catapults and giant cross-bows the Greek scientist Archimedes of Syracuse/Sicily (287 BC– 212 BC) had invented to combat the Romans invaders. We convinced my grandfather to build a catapult and a giant crossbow for us. I am not sure he enjoyed it but as an engineer he was interested in these early war machines, and he built both a catapult of medium size and a crossbow that had a bow (the prod) mounted on the frame (the tiller), which measured four meters and shot an arrow that was close to a yard long. One day, we loaded the entire crossbow on a little ladder truck and pulled it to a large field which was about twice the size of a football field. We assembled the crossbow and shot the first and last arrow. The experiment was so successful that to my grandfather's horror the arrow landed beyond the entire length of the field in the garden of a private house.
While still at primary school, I asked my father to buy me a bicycle, which he, however, refused to do. I had expected a negative response and, therefore, I went to work as a runner for a nearby pharmacy for 50 cents per hour. Within a year I had 180 dollars (I frequently got tips and I also went to pick up tennis balls in sports clubs), and I could buy a bike. I actually enjoyed working as a delivery boy because I met a lot of people who were sick, and consequently, were enormously grateful that someone delivered the medicine to them.
After primary school, my mother had persuaded my father to send us to a costly high-end private school to pass final exams after six years, which allowed us to study at a university.
I hated school but I very much enjoyed the friends I made at school, with whom I always played and misbehaved on free afternoons, and we also began to party at night since rock’n'roll with performers like Little Richard, Bill Haley, Chuck Berry, Jerry Lee Lewis, and Elvis Presley was just becoming popular in Europe.
The worst part was that my Faber grandmother kept on telling us that, "school time is the happiest part of your life” and after that “you have to work seriously.” For me it was the opposite. I performed poorly at school except at cleaning the school, which was a punishment for misbehaviour. Since I was punished about once a month I had developed special skills at cleaning classrooms in record time.
Starting at 13, during the summer holidays, my mother sent me as a paying guest to a French farmer in the Loire Valley to improve my French. The farmer and his wife were very nice people and I loved working on the combine machine and filling bags with wheat. I was also allowed to drive the tractor, and I soon realised what a tough life for little money farmers had to endure. The following year, I was sent to England as a paying guest on a farm. I did not have to work but since everybody else did, I thought I better do my part. For two weeks, I picked up potatoes. This is about the most horrible job you could imagine. Although I was reasonably fit, crawling along the earth to collect the potatoes was extremely painful on my back and even worse, it was unbelievably boring. But after having done this for two weeks from 8am to 5pm, no other job in my life seemed to be a problem for me. Moreover, seeing how some outside helpers could harvest a whole row of potatoes in half the time it took me, made me realise that we all have very different skillsets.
After these two gruelling weeks, I was invited by some family friends of my Engelberg grandparents who had been regular guests at the hotel. They owned a huge property with entire villages and lived just like aristocrats had in the 19th century. They were delightful gentlemen farmers with a great sense of humour, and I stayed in touch with them until they passed away a few years ago.
Towards the end of my Gymnasium I frequently skied with a friend of mine in Davos where they had a wonderful house. My friend’s brother suggested that I join a students’ ski racing club called the Swiss Academic Ski-club (SAS), since I seemed to be a daring and fearless skier. He took me along to two races where he competed and, thereafter, I decided to enter competitive Alpine Ski races. After completing my final exams, I took a job as a ski instructor in Engelberg in order to finance my stay there (my grandmother had a large boarding house in the centre of the village, where I rented a room). I taught at the Ski School from 10 to 12am and from 2 to 4pm. I used to practice slalom from 8 to 9.30am, and from 12pm to 2pm, and downhill skiing from 4 to 6pm. During that time I also went to two ski-instructor courses which lasted altogether almost four weeks, and were also costly. But I managed to pay for them and after one winter, I began to achieve reasonable results at regional races. The SAS then invited me to participate in a training week to qualify for the Swiss National Student Alpine Ski Team. To the surprise of everybody but especially to me, I qualified and so, for the next four years while studying economics, I skied just about every day between late November and late March traveling around Europe with the ski racing circuit. I participated at several world cups, two National Ski championships (I got lucky at one and finished 7th in the downhill), two Students’ Olympics Winter Sport Games (Universiade) and won a gold medal in Giant Slalom at the Swiss National Student Championship. I was never a particularly good ski racer but I had a great and also tough time because the training camps, the races, and drinking at night were occasionally very demanding.
After the 1968 season, I decided to go for the final exams in September of that year and decided to work on the preparation for 10 hours a day net – that means excluding lunches, dinners and breaks. So, for over six months, I hardly ever went out and studied all the lectures that I had missed during the winter months. On the last day before an oral exam, at 11.30 pm, I came across a chapter in a book entitled “Cash Flow Analysis” about which I had no clue. Although I was already dead tired, I decided to study it for an hour or two. The next morning at 8am, the first question was, “what is the meaning of cash flow analysis?”
Over the years, I frequently reflected on “luck” in one’s life. Of course, I was fortunate to be born in Switzerland and to grow up in relatively favourable conditions. As a Christian, I thank God for this fortitude in my daily prayers. I think I consider myself to have had an incredibly interesting life because I never had high expectations, and because I realised soon that it was better to be grateful for what we have than to envy what we lack.
After completing my PhD at the age of 24 with magna cum laude, I wanted to leave Switzerland and try my luck on my own. By then, life in Switzerland was “too” easy and comfortable. I wanted to go somewhere where I knew nobody and build my own life and business. In 1970 I joined White Weld & Co in New York as a stock broker. After a period of two years this prominent investment bank sent me to Hong Kong to build up their Asian business. I soon realised that business with institutions at the time was still small but that I could help wealthy Asian families invest outside Asia. The 70s were a really tough time for US investment banks and brokers. Still, I managed to open some large accounts all over Asia including Australia, and when White Weld was taken over by Merrill Lynch in 1978, I had the option to join Merrill or to look for other opportunities. I understood that Merrill was not overly keen to hire me, and that it was time for me to make an important move. A headhunter introduced me to Drexel Burnham Lambert where I met the largest shareholder and the head of the international department, Mr. Eddersheim. Upon entering his office he kindly asked me to sit down and right away he asked me, “What is your annual commission income.” I had to laugh because it was an extremely direct question and upon telling him what the production was (revenue generated by commissions), Mr. Eddersheim said “you are hired.” He called his administration officer and told him to work out the details with me. We worked out the details, which I considered to be fair to them and to me. It was basically an excellent fit because they were in the process of opening an office in Hong Kong and needed a manager to develop their Asian business. Drexel Burnham was an aggressive Jewish firm (Mike Milken was the junk bond king and we became friends) and for the next 12 years until they went out of business, I was in a constant battle with the head office in New York about everything. But since my office was by far the most profitable office overseas, huge fights were settled through negotiations, and to be fair, the Drexel Jews were much nicer and more capable people than the White Weld high class WASPs who came from Boston.
My bosses called me the most difficult character they ever dealt with but they also admitted that this was the reason they had hired me in the first place. Moreover, the Drexel bosses all loved to come to Hong Kong and to go out with me to nightclubs, which had an endless supply of attractive ladies.
In 1981, I got married to a Thai lady, we then had a daughter, and so far, we are still married, although we lived very separate lives. My wife opened a very successful Thai restaurant in Hong Kong and was the agent for Singha beer and I was traveling most of the time, which ensured the marriage would last. When Drexel went out of business in 1990, I made the decision that after 20 years of working for American investment banks, I would start my own business under Marc Faber Ltd.
All went well until the end of the 1990s when I took huge short position in tech, communication and media stocks. As the dot.com bubble got bigger and bigger, I decided to cut my losses and lost almost 50% of my money. But this was fine with me because money never interested me per se, what I always wanted is to be free to do whatever I pleased, and not live pay cheque to pay cheque.
Furthermore, in 1997/98, the Asian crisis decimated stock prices and it was my view that it was a time when stocks had become great value.
Already in the early 1980s, I had bought a huge piece of land in Chiang Mai, which is in the north of Thailand. During the 97/98 Asian crisis, I told my wife that I wanted to buy property in the city centre on the river. My wife’s brother found a property on the river, which I liked and which was selling at a bargain price. So, we bought it.
By 2000, the nature of my business was changing rapidly. I suggested to my wife that it was a pity to have beautiful but empty property on the river in Chiang Mai, and that we should rebuild the existing old Thai wooden house, and that we should live there. I kept my office in Hong Kong but closed the brokerage business and reduced the number of my staff considerably. After almost thirty years in Hong Kong, where offices and apartments are relatively small, I looked forward to move to a large house with garden and dogs, where I could write in peace when not traveling around the world, which was then around 80% of my time. After the residential house was completed (my wife lives on the right side of the house and my quarters are on the left side), I built my office building, where I keep my book collection and the collection of communist memorabilia.
Because my business involved a lot of socialising, which I never particularly liked, I now enjoy - especially after Covid - my solitude. Arthur Schopenhauer observed that, “Sociability belongs to the most dangerous, even destructive inclinations, since it brings us into contact with beings the great majority of whom are morally bad and intellectually dull or perverted,” and that, “A man can be himself only so long as he is alone, and if he does not love solitude, he will not love freedom, for it is only when he is alone that he is really free.”
There is no question that I grew up in privileged conditions. Equally, as a Christian, I consider it is as my duty to continuously learn because as Baruch de Spinoza observed, “The highest activity a human being can attain is learning for understanding, because to understand is to be free.” Along similar lines Jiddu Krishnamurti suggested that, “There is no end to education. It is not that you read a book, pass an examination, and finish with education. The whole of life, from the moment you are born to the moment you die, is a process of learning.”
Finally, I need to emphasize that in my experience and as Schopenhauer correctly remarked, “It is difficult to find happiness within oneself, but it is impossible to find it anywhere else.”
