Marc Faber's contrarian way to play the Trump rally

With stock markets surging after the election, Marc "Dr. Doom" Faber is looking to several trades that appear contrarian, including gold and emerging markets.

Aside from gold, the editor and publisher of the Gloom, Boom and Doom Report said he sees opportunity in some other beaten-down assets, such as the euro and bonds.

In an interview Tuesday on CNBC's "Trading Nation," he also warned investors to stay away from assets that have rallied recently, like the U.S. dollar. And large-cap American stocks may not be all they're cracked up to be.

Essentially, investors should look to sectors and stocks that are "oversold, and avoid the sectors that are overbought," he said.

Faber said emerging markets, in the red since Election Day, could be a golden opportunity in the new year. He particularly likes Brazilian and Russian stocks, which have been "very miserable performers since 2011."

"I think that in 2017 my recommendation would be to overweight emerging economies, and I would also overweight Europe, partly because I think that the sentiment about the U.S. dollar is far too optimistic. I think the dollar is terribly overbought and overvalued, so I wouldn't get into the U.S. dollar at this time," Faber said.

The U.S. dollar index has risen 2 percent this month, climbing two weeks ago against a basket of currencies to its highest level in 13 years.

On the other hand, gold, often considered a safe haven trade in times of economic turbulence, has tumbled nearly 7 percent since the election. Faber said that gold, and shares of the gold miners are "attractive" at these relatively lower levels.

Meanwhile, "the U.S. market is not quite as strong as the indices would suggest," Faber said. He believes that a small number of stocks have led the rally, and that the U.S. economy has shown only "low-quality growth."

Faber has long had extremely bearish positions on U.S. stocks, and has been a gold bull, giving his predictions a mixed track record over the past few years.

Marc Faber
Scott Eelis | Bloomberg | Getty Images
Marc Faber


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Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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