Echoing comments made on CNBC earlier this week by Stanley Druckenmiller, founder of hedge fund Duquesne Capital, Faber said that it will end badly for stocks. "But unlike Stan, I believe it will end badly this year," Faber said.
(Read More: Stock Rally May Be in 7th or 8th Inning: Druckenmiller)
He sees two possible scenarios. Either a 20 percent correction for stocks and then a move higher, or a scenario that is similar to 1987 or 2000 when stocks rise strongly early in the year only to drop sharply.
(Read More: Marc Faber: 'Market Has Peaked Out')
Faber has been calling for gold to outperform stocks, but acknowledges that the yellow metal has been in a correction. "I'd rather buy something that is relatively depressed than something that is relatively high," he said.
But while Faber expects a correction for equities, he still owns some stocks. "The equities I own, I bought in 2008 and 2009 in Asia," he said. "The Philippines, Indonesia, Thailand, where I have most of my holdings, are up four or five times since then."
Faber added, "I'm not short stocks. But I'm very worried about it."
(Read More: Dow Record 'Eerily Similar' to 2007: SocGen)