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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Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

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