Tags: faber | buy | china

Faber: Buy Asian Stocks, Hold Long

By    |   Wednesday, 18 Mar 2009 09:14 AM

While many stock markets have taken a beating this year, investment guru Marc Faber sees value in Asian markets.

First stop: China.

“It has an overcapacity crisis,” Faber acknowledged on Bloomberg TV. “But rapidly growing economies have recessions from time to time. Long-term, I would use weakness in Chinese equities to buy.”

China has the best performing stock market this year, with the Shanghai index up 23 percent. “I think we’ll test the lows again,” Faber says, “but over the next two years, it’s probably time to buy again.”

As for elsewhere in Asia, “Japan is cheap: it’s at the level of 1981,” he notes.

“Taiwan is at the level of 1987. South Korea is also at the level of 1987.”

In some of these markets, dividend yields are three times bond yields, Faber says. While that situation won’t last as companies cut dividends at least 50 percent, “at least you get paid to wait,” Faber says.

“If you start buying equities today, over the next 10 years you will make some money.”

Faber isn’t alone in his enthusiasm for Asia. Motley Fool reports that JPMorgan wrote in a recent note to clients that “China is a must buy today” and that Credit Suisse has raised its Asia ex-Japan rating to “overweight.”

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While many stock markets have taken a beating this year, investment guru Marc Faber sees value in Asian markets.First stop: China. “It has an overcapacity crisis,” Faber acknowledged on Bloomberg TV. “But rapidly growing economies have recessions from time to time....
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Wednesday, 18 Mar 2009 09:14 AM
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