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Wednesday, December 23, 2009

Contrarian View on Stock Markets By Marc Faber

Investment guru Marc Faber, likes Japanese stocks and banks, real estate in India, wheat and natural gas as the New Year approaches.

"I think as a contrarian, you really want the contrarian play," Faber told The Economic Times. "You should buy Japanese stocks and Japanese banks.”

“(Banks in India) did not play in the CDO market and mortgage backed securities market … so for the banks that are well run, there is a huge opportunity,” he notes. “I can see in that in India urbanization will accelerate and there will be entirely new cities coming up,” he observes. “So I think there is a big opportunity in Indian real estate in the long run."

As to commodities, Faber notes he was “very positive about sugar,” which he still thinks may go up, but believes that wheat and natural gas offer better opportunities.
“In real terms inflation adjusted (wheat) is at 200 years low,” Faber says, and natural gas is “very cheap” … but it is not so easy for investors to play these commodities.”

The tightening of Tier I quality standards recently proposed by the Basel Committee on Banking Supervision is “overall negative for the Japanese banks,” Stephen Church, a research partner at Japaninvest KK, told Bloomberg.

Mark Mobius said plenty of opportunities still exist in emerging markets, BusinessWeek reports.

Mobius, a longtime Templeton Asset Management manager, said stocks of emerging markets are selling at good rates. Stock buys in Brazil, China and other smaller markets are still abundant since their economies are growing at a quicker pace, he said.

“Their economies are growing faster, four times faster [than the U.S. and global markets]. They were building up reserves, keeping their currencies low and reducing debt,” he said. Investors should seek buys in large emerging market countries such as India and Russia, Mobius said. Other countries such as Jordan, Lebanon, Qatar, Saudi Arabia, Dubai, and even Pakistan are also good investments. Mobius is making investments in consumer and commodities.

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