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The World's Cheapest Market

By Frank Curzio, editor, Small Stock Specialist
Friday, November 29, 2013

If you want to make money investing abroad, I suggest you listen to Chris Mayer.
 
Chris is the editor of the Capital & Crisis newsletter. He spends most of his time traveling to developed and non-developed nations in search of the next big idea. In the last five years, he's visited over 30 countries.
 
I caught up with Chris this week on my S&A Investor Radio podcast. He talked about the huge long-term potential in places like China and Africa. But one of his suggestions caught me by surprise...
 
Chris is putting money to work in Russia.
 
Russia is dirt-cheap. As measured by the RTS Index (a capitalization-weighted index made up of the highest-capitalized stocks in Russia), Russian stocks trade at about six times earnings... and pay a 4% yield.
 
Russian stocks are so cheap because no one wants to invest there...
 
Russia is known as a tough place to do business. Last year, Russia ranked 133 out of 176 countries on the Corruption Perceptions Index. And the National Anti-Corruption Committee estimates that the cost of bribes and nepotism in Russia totals $300 billion each year.
 
But Chris sees a huge opportunity to make money... You see, the last time Russia traded at these valuations was in 2009. And Chris told his subscribers to buy the Market Vectors Russia Fund (RSX). RSX holds a basket of Russia's largest companies.
 
At the time, RSX was trading at $12 a share. In just 24 months, RSX rose to $40. That's a gain of more than 230%.
 
 
Today, Chris calls Russia "the world's cheapest emerging market." And he suggests investors put money back to work in RSX.
 
Chris believes we could see similar gains over the next 24 months buying RSX right here. More important, with the index trading at just six times earnings, the downside risk is limited.
 
He has one of the best track records for investing abroad. And the last time he recommended investing in Russia, his subscribers saw huge gains.
 
I suggest following his advice this time around. At current valuations, Russian stocks look like a steal.
 
Good investing,
 
Frank Curzio




Further Reading:

Brett Eversole says there's a great opportunity for investors in three other cheap, out-of-favor countries. He says "these markets are up 40%, 27%, and 26% in just a little over four months... and almost no one has noticed..." Get the full story here: The World's Best-Performing Markets Are Still a Buy

In The Daily Crux
Market Notes
Crude oil prices break down to a five-month low.
 
U.S. manufacturing is in an uptrend... Honeywell and 3M hit new all-time highs.
 
"Bad to less bad" rally sends Nokia soaring 100%-plus in three months.
 
Indian carmaker Tata Motors quietly breaks out to a three-year high.
Market Watch
Symbol Price
Change
52-Wk
S&P 500 1807.23 +0.3% +29.2%
Oil (USO) 33.19 -1.5% +3.8%
Gold (GLD) 119.46 -0.3% -29.2%
Silver (SLV) 18.96 -0.9% -42.4%
U.S. Dollar 80.56 -0.2% +0.3%
Euro 1.36 +0.2% +5.1%
Volatility (^VIX) 12.98 +1.3% -18.5%
Gold Stocks (^HUI) 204.33 +0.8% -54.6%
10-Year Yield 2.74 +1.5% +67.1%

World ETFs
Symbol Price
Change
52-Wk
Japan (EWJ) 12.07 +0.4% +32.6%
USA (SPY) 181.12 +0.2% +31.9%
Israel (ISL) 16.38 +0.1% +29.2%
China (FXI) 40.19 +2.1% +12.2%
Russia (TRF) 15.31 -0.6% +11.3%
S. Korea (EWY) 64.29 +0.8% +9.9%
Taiwan (EWT) 14.16 +0.7% +9.3%
Singapore (EWS) 13.57 -0.2% +5.9%
Canada (EWC) 28.98 -0.5% +5.3%
India (IFN) 19.89 -0.2% +2.1%
S. Africa (EZA) 62.94 +0.1% -0.6%
Lat.America (ILF) 37.97 +0.4% -5.3%

Sector ETFs
Symbol Price
Change
52-Wk
Alt. Energy (PBW) 6.35 +1.1% +73.3%
Biotech (PBE) 37.77 +0.6% +64.0%
Media (PBS) 25.19 +0.5% +59.4%
Defense (PPA) 30.32 +0.8% +52.0%
Transportation (IYT) 129.94 +0.7% +45.6%
Retail (PMR) 35.15 +0.2% +42.0%
Health Care (IYH) 116.10 +0.1% +42.0%
Consumer Svcs (IYC) 119.33 +0.3% +41.4%
Industrials (IYJ) 97.90 +0.5% +40.2%
Financials (IYF) 79.01 +0.4% +37.4%
Big Tech (QQQQ) 85.22 +0.7% +33.0%
Semis (PSI) 18.00 +0.2% +33.0%
Software (PSJ) 34.59 0.0% +30.4%
Water (PHO) 25.35 +0.4% +28.1%
Construction (PKB) 21.27 +0.4% +28.0%
Telecom (IYZ) 28.66 +0.3% +26.1%
Nanotech (PXN) 7.08 +0.7% +26.0%
Basic Mat (IYM) 78.21 +0.1% +20.6%
Insurance (PIC) 19.01 +0.1% +18.3%
Utilities (XLU) 38.05 -0.2% +14.4%
Real Estate (IYR) 63.69 +1.0% +5.0%

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