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Welcome to Trading Nation. We're pleased to welcome today the editor of the Gloom, Boom, and Doom report, Mark Faber, who is with us from a certain point in the world. Mark, it's always nice to hear your opinion. You know, our viewers and listeners know you more as the " apocalypse man," but are you buying stocks during the so-called " Trump rally"?
Listen , there's a lot of liquidity in the world , and we've seen a sell-off in bonds, and more recently, in precious metals . Therefore, I believe we should look at markets, sectors, and stocks that are oversold and avoid those that are overbought. The fact is that the US market is not as strong as the indices seem, because, as CNBC's Jeff Mack pointed out the other day , 90% of the S&P's growth since December 2014 has been provided by Facebook, Amazon, Netflix and Google, while common stocks have not performed so well.
Since 2011, there has been an active sell-off in emerging market stocks. This year, most emerging markets have actually outperformed the US. Russia grew by 34 %, Brazil by 64%, Kazakhstan by 58%, Thailand by 18%, Indonesia by 14%, Vietnam by 15%. And I think in 2017 I would recommend increasing the share of emerging markets in the portfolio.
I would also increase the European share, partly because I think the optimism about the US dollar is excessive. I think the US dollar is horribly overbought and overvalued. Therefore, I would not invest in the US dollar right now . Of course. OK. You mentioned...let's move on to specific ideas. You named markets that performed better than the US, and this has been taken into account.
Are you buying stocks in these markets, Mark, or have they completely exhausted their growth potential? Not really, because some of these markets have performed very poorly in the past . If you look at Brazil and Russia, they have been performing terribly since 2011 and have just bounced off the lows.
So I think the potential is still there, but right now I would look at Singapore stocks. I believe Singapore stocks are undervalued compared to the US. And, as I said last year, exactly a year ago, when Barrick was worth about $6 and Newmont Mining was about $17. I believe that gold mining stocks are still attractive after the recent correction.
Don't forget that there has been a lot of negative talk about gold lately . But the fact is that if you consider gold as a currency, it is the strongest currency in the world this year. This is an increase of 11% in dollars, 32% in British pounds and 14% in euros. So I don't think things were that bad even after the recent correction .
Is it fair to say that you are a little less pessimistic about the US than before? Less pessimistic, not optimistic, but less pessimistic, actually. I think that , unfortunately, I would also vote for Mr. Trump if I were an American. But unfortunately, I think he's a Keynesian, an interventionist, and that he's going to print money.
He will have to print money on a massive scale. The US economy is actually not doing very well. Let's say, assuming nominal GDP growth was around 5%, in other words, 2% inflation and 3% real growth this year or next , then over the past 12 months, the national debt alone has increased by $1.6 trillion .
So what is the quality of this growth? So you... are of no quality? Yes, I hear you. What should we do then? Mark, without going into complicated schemes, let's assume that someone watching this is not going to buy Romanian stocks or even Brazilian EWZ. But if you were to ask the average investor , what would they do today?
I would buy Treasury bonds. I think they will recover. There is a stock called TLT—it's an ETF for long-term treasury bonds. I think it could grow by 3-4 % in just a few days. I would buy gold and platinum. They are underrated. And I would buy euros. And I would increase Japan's share, literally instead of the US.
And I would buy emerging markets. Good. Japan, gold, treasuries and emerging markets. To Mark Faber, these are real ideas for investment, and we are certainly grateful for that. We won't be doing a separate segment on Romanian stocks, although we might do it with you, Mark. That's why we love you. We can talk about anything.
Thank you. Let's talk about Indian stocks sometime. Yes. And about how and why they literally run out of money. There is no large denomination currency there because it was withdrawn. That will be another topic for conversation , Mark, and we look forward to it. Thank you. Thank you very much. Thank you and thank you for watching Trading Nation.
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