Top Contrarian Market Ideas for the New Year
There’s plenty of conventional thought out there about where to put your money in 2011.
But you’re likely tired of that.
Citigroup (NYSE:C) polled some of its top strategists to get their top contrarian ideas for the year.
#1 It’s time to go long Japan
Trade: Buy Japanese Stocks (NYSE:EWJ) Why: Currency to fall in value, earnings per share gaining momentum, and equities are now looking cheap.
Analysts: Robert Buckland & Hasan Tevfik
#2 Short U.S. material stocks
#3 Go long U.S. small-cap companies
#4 Opt for dividend growth strategies when buying equities
Trade: Invest in companies with strong dividend growth (NYSE:HBC)Why: Companies that have underperformed may expect higher dividends. HSBC expects 65c per share in 2013, compared with 34c in 2010.
Analysts: Jonathan Stubbs and Adrian Cattley
#5 Invest in Japanese financials
#6 Go long Australian banks
Trade: Buy stocks of Australian banks (ASX:ANZ – Australia and New Zealand Banking Group) (ASX:NAB – National Australia Bank)Why: Demand for commercial properties has increased lending to businesses. Australian Banks Index looks to do well with growing business credit.
Analysts: Tony Brennan and Richard Schellbach
#7 In emerging markets, go long China and Russia
Chinese President Hu Jintao and Russian Prime Minister Vladimir Putin
Trade: Buy Chinese, Russian and Korean stocks (NYSE:PTR) (NYSE:SNP) (NYSE:MBT)Why: Foreign investors return to emerging markets, larger markets likely to see more volatility and large markets have better valuations.
Analyst: Geoffrey Dennis
#8 Go long on Korea and Taiwan
#9 Go long on LatAm’s energy sector and Petrobras
Image: Petrobras News Agency
Trade: Buy Latin American energy stocks and Petrobras stocks (NYSE:PBR.A)Why: A new government in Brazil signals hard-nose economic policies that could bring up Petrobras shares that dropped 30% last year. Petrobras’ new oil discoveries could spur oil production and prices.
Analyst: Matthew Hickman
#10 Short retailers in Central Eastern Europe, Middle East and Africa
Image: Corvair_Owner via Flickr
Trade: Sell CEEMEA retailing stocksWhy: Bullish retails markets have boosted the price to book ratio and stocks are trading extremely high. Analysts fear such an uptick and think they are susceptible to low earnings per share.
Analyst: Andrew Howell