Marc Faber is not exactly known for his rosy outlook on equities. On Thursday's "Futures Now," he made the case that 2013 looks an awful lot like 1987, which is why he expects the market to drop 20 percent or more by the end of the year. (Read: Marc Faber: Look out! A 1987-style crash is coming)
After all, there's a reason he's known as "Dr. Doom" rather than "Dr. Feelgood."
But that doesn't mean he's universally bearish on equities. In fact, there's one sector that he's quite excited about right now.
"I think there's one group of stocks that should appeal to people who say 'I want to buy low and sell high,' and this is the gold mining sector," Faber said. "In general, the gold mining sector is incredibly depressed."
He's not kidding. While gold has fallen 22 percent this year, the Dow Jones U.S. Gold Mining Index has plummeted 41 percent.
In general, two different factors have weighed on gold miners. First, gold mining stocks have always tended to be a leveraged way to bet on gold—meaning that as gold rises or falls, the miners tend to make a larger move in the same direction.
Indeed, as gold has dropped, miners' fundamentals have gotten destroyed. For the second quarter, the S&P 500 Metals and Mining industry had a bigger earnings decline than any other industry group, as earnings fell 78 percent (according to FactSet).
But the leveraged factor still doesn't explain why the Gold Mining Index is down 30 percent over the past five years, while gold is still up 50 percent. The second issue is that the SPDR Gold Trust has given retail investors a simpler way to bet on gold. So many who owned miners simply to get gold exposure went ahead and bought the gold ETF instead.
