I recently went to see a local production of “The Emperor's New Clothes” which is based off a short story by Hans Christian Anderson where two weavers promise an emperor a new suit of clothes that they say is invisible to those who are unfit for their positions, stupid or incompetent. When the emperor parades before his subjects in his new clothes, no one dares to say that they don't see anything for fear that they will be seen as unfit or stupid. Finally a child cries out, “But he isn't wearing anything at all!” and the weavers are exposed for the frauds that they are. Sadly this happens in real life and market gurus who get airtime on popular financial TV programs are there for entertainment, not for actual substance. Make sure that you know the difference.

Dr. Doom?

Once such example is Marc Faber who publishes the Gloom, Boom and Doom Report. In the press, he is known as Dr. Doom. I'm not sure where he earned his doctorate in doom but I suspect it may have been from the same school as the weavers that produce invisible clothes for emperors. You can be sure that at least once a year, CNBC will bring Dr. Doom out for a headline of a potential market crash and he will deliver with ease. Remember don't take investment advice from anyone that is perma-anything, but especially perma-bears who will be wrong about 75%+ of the time.

So it is no surprise that on Saturday, he made his latest headline warning that it's going to end ‘extremely badly,” with stocks set to plummet 40% or more! Let's take a look at his consistently bad predictions of the last several years:

August 2016: I think we can easily give back 5 years of capital gains, which could take the market down to around 1,100 (50% decline).”

July 2015: “In the US, the market could easily drop 20 percent to 40 percent.”

April 2014: “I think it's very likely that we're seeing in the next 12 months, an '87 type of crash. And I suspect it will be even worse.

August 2013: He expects to see stocks end the year “maybe 20 percent (lower), maybe more!”

November 2012: Prepare for a massive market meltdown: “the S&P will drop at least 20%, in my view”

August 2011: “The bear market is starting.”

I think you get the picture that Dr. Doom is basically a guy yelling fire on repeat every year. When CNBC wants a potential market crash headline, he is definitely the first number on speed dial. Just don't take investment advice from anyone with a record as poor as this.