Stocks are in "bubble territory," making it a good time to move into gold, Gloom Boom & Doom Report Editor Marc Faber said Friday.
"The S&P is down 3 percent from its high, 1,709, and yesterday we had over 400 new 12-month lows on the New York Stock Exchange. That is remarkable," he said. "That shows that the internal picture of the market is very different than what the indices show. The indices – Nasdaq, S&P, Dow – are driven by just a few stocks that are very strong. They are in bubble territory."
Stocks closed lower for a third straight day.
Faber noted weakness in such sectors as home builders, retailers, airlines and food companies.
That made the precious metal a strong play, he added.
"First of all, I have a preference for physical gold, held in a safe deposit box outside the United States, and preferably in Asia, for a variety of reasons," he said.
"About 10 days ago, all shares became incredibly cheap in terms of their valuation compared to the gold price, and, as you say, some experts don't like gold."
Faber chided gold bears for missing the precious metal's 1999-to-2011 bull run, during which time gold prices went from approximately USD 251 per ounce to USD 1,700.
"So, I don't think it's all that bad," he added.
Faber added that he doesn't "pay a lot of attention to the so-called experts."
"But I know other experts who are actually very positive about gold and own it for other reasons than just the price going up," he said. "They want to have some cash in an asset that is not a financial asset."
While Faber said that he liked physical gold, he also noted that it was "near-term lightly overbought."
Faber also said that he had recently bought stock in Newport Mining, Freeport-McMoRan and Barrick.
As a member of their boards, Faber also owned equity in Ivanplats, NovaGold and Turquoise Hill, he added.
Stuart Frankel's Steve Grasso liked
"I don't have a safety deposit box in Asia, so what I do is I buy GDX," he said. "GDX is up 39 percent from June 25. GLD is up 16 percent. I'd rather play it with the miners on the way back up."
— By CNBC's Bruno J. Navarro.
— CNBC's Torrey Kleinman contributed research to this report.
Trader disclosure: On Aug. 15, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Steve Grasso is long BA; Steve Grasso is long BAC; Steve Grasso is long BBRY; Steve Grasso is long GDX; Steve Grasso is long GOOG; Steve Grasso is long HERO; Steve Grasso is long HPQ; Steve Grasso is long MHY; Steve Grasso is long LNG; Steve Grasso is long MJNA; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long QCOM; Steve Grasso is long S; Steve Grasso is long ASTM; Steve Grasso is long POT; Steve Grasso is long DECK; Steve Grasso is long DHI; Dan Nathan is long FB; Dan Nathan is short BBRY; Dan Nathan is long VIX; Dan Nathan is short IWM; Brian Kelly is long US dollar; Brian Kelly is short Yen Bonds; Josh Brown is long TLT; Josh Brown is long AAPL; Josh Brown is long XLU; Josh Brown is long XLF; Josh Brown is long FSLR.