Not a subscriber? Click here to learn
more.
|
| Home | About Us | Resources | Archive | Free Reports | Market Window |
'The Bargain of the Century,' Says the 100%-a-Year ManBy
Tuesday, June 21, 2016
When I started out in this business in the early 1990s, Mark Mobius was the biggest legend to the guys in our office...
We called him the "Double-Your-Money Man." He delivered triple-digit returns, regularly, to investors. Take a look:
His "doubles" didn't end in 1993... Investors doubled their money with Mobius in eight months starting in late 1998. He roughly doubled investors' money again in 2003... and again in 2009. Mobius delivered these returns in the Templeton Emerging Markets Fund (EMF) – which was the first emerging-markets fund available to U.S. investors. (He started the fund in 1987, and he's still involved today – nearly 30 years later.)
So what does the Double-Your-Money Man like today? Early last month, Mobius told Bloomberg. He focused on two ideas...
First, he believes Brazil could go up "another 100% to 200%." But more importantly, he explained why he believes Russia is the "Bargain of the Century."
"[Russia] has been closed to us and many other investors, for the most part, because of sanctions," he said. "If sanctions are lifted, then you could see a big, big surge in Russian stocks."
Russian stocks are cheap...
There aren't many things you can buy today as cheap as they were 20 years ago... But today, you can buy Russian stocks at 1997 prices.
A 20-year-return "drought" like this is almost unthinkable for U.S. investors. Many folks remember the 2000s as the "lost decade"... Well, Russia is currently finishing its lost TWO decades. Unbelievable!
The result of this drought is simple: Two decades of near-zero returns have led to incredible value in Russia's market.
The VanEck Vectors Russia Fund (RSX) holds some of the country's largest companies... and it's the easiest way for Americans to own Russia. The fund trades at a price-to-earnings (P/E) ratio of just seven...
When you buy a company for seven times earnings, even if a lot goes wrong... you can still make money.
If you bought a private business at seven times earnings, you would have earned all of your investment back in seven years – assuming no growth. Every cent after that is pure profit.
This value is a big reason why the Double-Your-Money Man sees Russia as the Bargain of the Century. The big catalyst he sees is the removal of sanctions that have crippled the country's economy. The sanctions are up for review next month.
We're on board this trade in True Wealth Systems. The easiest way to join us is through shares of RSX.
Good investing,
Steve
Further Reading:
In this classic interview, former Stansberry Research Editor in Chief Brian Hunt explains why buying at bargain prices is so important – and how you can use the price-to-earnings ratio to make winning investments. Read it here: The Most Important Aspect of Any Investment.
What about U.S. stocks today? Last week, Steve explained that U.S. investors haven't been this bearish in nearly five years. "This type of action doesn't happen at market peaks," Steve says. "It's yet another sign the market has plenty of room to run higher." Learn more here.
Market NotesTHE POWER OF RISING OIL PRICES Today's chart shows how a trend reversal has driven two oil giants in recent months...
Last July, we highlighted the effect of declining oil prices on two of the biggest oil companies in the world – Chevron (CVX) and ExxonMobil (XOM). The two companies are worth a combined $575 billion.
Back then, the price of West Texas Intermediate ("WTI") crude oil – the U.S. benchmark – had fallen to about $47 per barrel. It kept falling – along with Chevron and ExxonMobil shares – until earlier this year. But after bottoming at about $27 per barrel in February, WTI has rallied nearly 80% to around $50 per barrel today due to wildfires in Canada and falling production from energy powerhouses. Shares of Chevron and ExxonMobil have soared right along with it.
ExxonMobil (the black line) recently touched a new 52-week high... and Chevron (the blue line) is close to a new high, too. As long as oil prices continue to rise, these blue-chip oil firms should keep marching higher.
 |
Recent Articles
|
