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.

Get Your Market Outlook 2011 – by Jordan Roy-Byrne, CMT >>

Have a look:

#1 It’s time to go long Japan

#1 It's time to go long Japan

Image: AP

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

Source: Citi

#2 Short U.S. material stocks

#2 Short U.S. material stocks
Trade: Sell U.S. commodity stocks (NYSE:SLB, NYSE:DOW, NYSE:HAL, NYSE:COP)

Why: If the dollar appreciates, returns on commodities will be weak. Move out to hedge against U.S. stocks.

Analyst: Tobias Levkovich

Source: Citi

#3 Go long U.S. small-cap companies

#3 Go long U.S. small-cap companies

GQ

Image: www.gq.com

Trade: Buy stocks of small and mid-cap companies (NYSE:IWO) (NYSE:SCHA)Why: Attractive price to book ratio, fewer credit risks and a recovering market make these good bets.

Analyst: Scott Chronert

Source: Citi

#4 Opt for dividend growth strategies when buying equities

#4 Opt for dividend growth strategies when buying equities

Image: AP

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

Source: Citi

#5 Invest in Japanese financials

#5 Invest in Japanese financials

Image: AP

Trade: Buy Japanese financial stocks (NYSE:NMR) (NYSE:MFG) (NYSE:MTU)Why: Having underperformed for 5 years, the sector looks to beat market rates in the short term. Also linked to Japanese bonds which are expected to go up.

Analyst: Kenji Abe

Source: Citi

#6 Go long Australian banks

#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

Source: Citi

#7 In emerging markets, go long China and Russia

#7 In emerging markets, go long China and Russia

Chinese President Hu Jintao and Russian Prime Minister Vladimir Putin

Image: AP

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

Source: Citi

#8 Go long on Korea and Taiwan

#8 Go long on Korea and Taiwan

Image: AP

Trade: Buy Korean and Taiwanese stocks (NYSE:TSM)(NYSE:KEP)Why: 2010 underperformance made these markets cheaper. Their lower price to book ratio makes them better than other South Asian markets trading at higher ratios and struggling with inflation.

Analyst: Markus Rosgen

Source: Citi

#9 Go long on LatAm’s energy sector and Petrobras

#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

Source: Citi

#10 Short retailers in Central Eastern Europe, Middle East and Africa

#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

Source: Citi

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