Renowned investor Jim Rogers has a contrarian message for U.S. investors on the prowl for opportunities in the wake of the Trump presidency: Buy Russia. In his view, with U.S. equity indices realizing all-time highs, now is the time to look at undervalued markets around the world.
Rogers decades ago co-founded the Quantum Fund with George Soros.
Although Rogers acknowledges that the Trump effect has had "an impressive effect on the U.S. stock market," he says "many stocks are now expensive." Tax cuts, infrastructure spending and corporate cash repatriation should remain positive for U.S. markets over the next couple of years, but Rogers sees better opportunities internationally.
According to the investment guru, his bullish stance on Russia is based on his view that relations between the United States and Russia will improve when Donald J. Trump takes office as the 45th president of the United States, providing a boost to its depressed economy. There is also the chance that sanctions imposed on Russia over its role in the conflict in the Ukraine may be eased.
More from Quarterly Investment Guide:
You can stop wasting your time waiting for Dow 20,000
Think small...caps: Big fund managers reaping big returns by shunning the Dow
As Dow nears 20,000, these sectors can take it higher
Rogers first visited Russia in 1966 and was pessimistic for almost five decades. "But something has happened in the Kremlin. They understand that they cannot be the same old czarist and communist plutocrats that they were," he said. Russia also has vast natural resources — it's the world's largest petroleum producer — and is not a significant debtor nation despite the fact its been mired in recession due to the oil price collapse and international sanctions. It has the 12th-largest economy, valued at $1.3 trillion, the IMF reports.
Rogers is long the ruble and Russian markets. "I was bullish on Russia before Trump came along with his positive comments," he said, noting that he has been investing heavily there over the last few years. "Trump is going to be friendly with Russia. That's an enormous change. You're going to see the rest of the world remove sanctions."