Emerging Markets

  • 22 Dec
    Advice On Value Investing In Emerging Markets From Mohnish Pabrai

    Advice On Value Investing In Emerging Markets From Mohnish Pabrai

    • Investing in emerging markets still offers 100-baggers, the problem is that most investors don’t stick with them.
    • Looking for 100-baggers can make your portfolio, but it can’t break it because you can only lose 100% of the investment while the upside is unlimited.
    • Great investments can be found everywhere, you just need to know what to look for.

    Looking Around The World For Value

    It gets harder and harder to find stocks that have positive future business perspectives, a low valuation, and a price to book value that gives you a margin of safety when investing. Therefore, it’s necessary to do some research on such investments at a larger scale, especially in emerging markets. One person who is a specialist on this is Mohnish Pabrai. More →

  • 21 Dec
    Should You Invest In Russia? Sven Tells You Why It Might Not Be Such A Good Bet

    Should You Invest In Russia? Sven Tells You Why It Might Not Be Such A Good Bet

    • The numbers make Russia the cheapest global market.
    • However, most of the market is made up of energy and financials, while normal companies are fairly priced.
    • Long term economics in Russia aren’t positive as the country is completely dependent on oil prices.

    Russia As An Investment Opportunity

    Russia has been the best performing market year-to-date and is up 50%. However, it’s still considered by many in the financial environment as one of the cheapest global markets as it’s still far from the pre-sanction and higher oil prices levels of a few years ago. More →

  • 20 Dec
    Be Overweight In These Sectors In 2017

    Be Overweight In These Sectors In 2017

    • Increasing interest rates make earnings growth unlikely and increase the probability for a decline of the S&P 500.
    • To beat the S&P 500, you have to invest in sectors that offer a better risk reward ratio than the S&P 500.

    Don’t Go For 10 To 20 Percent Returns In 2017

    With the S&P 500 yielding 3.85% going into 2017, stocks in general are currently an investment vehicle that gives you a small and limited upside with a potentially large downside.

    We know that the FED plans to raise interest rates another three times in 2017. If that happens, the investments people consider most secure—like treasuries, dividend paying blue-chips or REITs—will be hit the hardest because as required yields go up, their asset prices will go down. Therefore, the best way to prepare for 2017 is to position yourself so that if the FED raises rates, your upside is far bigger than 3.85% and your downside far smaller than the potential downside of the currently overvalued stock market. More →

  • 08 Dec
    Brazilian Investment Opportunities

    Brazilian Investment Opportunities

    • Many stocks in Brazil have the potential to double in 2017, but they also have the potential to lose 50%.
    • We’ll briefly describe investment opportunities and our approach to the research.
    • Emerging market volatility should be considered a great thing, not a risk.

    Investing Rationale

    Monday we discussed the current situation in South America. Reading the article, available here, will give you a good intro into what we’ll discuss today.

    The source of our long-term investment ideas comes from constant research on macro trends. These ideas are bound to benefit from positive economic, demographic, and political environments. More →

  • 15 Nov
    Finding The Equilibrium In Emerging Markets & Why You Need To

    Finding The Equilibrium In Emerging Markets & Why You Need To

    • Emerging markets are volatile and considered risky, but the economics are great.
    • We can’t fight the market without looking at the risks, but what we can do is rebalance our portfolios and do some dollar cost averaging.
    • Such a strategy allows you to grasp the benefits of great economics and lower valuations while eliminating volatility risks.

    Introduction

    Last week was very interesting for emerging markets.

    Trump’s win sent shockwaves around the world and such movements usually hit those markets the hardest that don’t have much relation to the U.S. but are considered risky and therefore, investors quickly pull funds out of those markets. More →

  • 11 Nov
    Forget About The Election Noise, Let’s Talk About China

    Forget About The Election Noise, Let’s Talk About China

    • China’s long term outlook is very positive and its debt is not worrying.
    • However, due to the nature of economic cycles, we have to expect and prepare for potential trouble coming from China.
    • When trouble will happen is anybody’s guess as many have called negative scenarios several times, but those have so far failed to materialize.

    Where China Is Now & Where It Is Going

    China is the growth motor of the global economy. It consumes about half of the global produced copper and produces half of the global steel output. This is due to the incredible GDP growth China has achieved in the last 25 years, which has averaged 9% per year. More →

  • 27 Oct
    A Global Risk Reward Perspective

    A Global Risk Reward Perspective

    • Emerging markets will grow faster than advanced economies, but there are many investing risks.
    • If a currency is at risk of being devalued 50% against the US dollar, over a decade you’d need an additional 7% yearly return to cover for it.
    • It is less risky to invest in emerging markets when there is pessimism than when there is euphoria.

    Introduction

    The World Bank revised its 2016 global economic growth forecast down to 2.4 percent from the 2.9 percent pace projected in January. The main reason for this downward revision came from lower commodity prices globally and soft investments in developed countries. But what’s important here is the divergence between the growth in emerging versus developed economies. More →

  • 15 Sep
    Troubled Waters Ahead For Developed Markets. Look Here For Returns.

    Troubled Waters Ahead For Developed Markets. Look Here For Returns.

    • Europe and Germany aren’t the best places for international diversification right now.
    • The U.S. is looking a bit better, but you’ll find the best opportunities are mostly in emerging markets.
    • Look for companies that are relatively cheap and that have exposure to China, India, and/or Brazil.

    Introduction

    Two days ago we discussed what is going on in the markets in relation to monetary policies. Today we will discuss what is going on in global economics.

    As the market is showing a high level of volatility, basic economic fundamentals is where we should look to get answers on what to do. By analyzing the latest global economic indicators, we can better determine the risk of a recession in the U.S. and Europe or a slowdown in China, all of which could contribute to a decline in global markets. More →

  • 29 Aug
    If You’re Thinking About Global Diversification, You Should Read This

    If You’re Thinking About Global Diversification, You Should Read This

    • The developed world is depending, and will continue to depend, more and more on the developing world.
    • The focus of productivity and GDP growth is in Asia.
    • The U.S. is the only country with trade deficits since 1976.

    Introduction

    Nobody knows where the market will go in the next week, month, or year, but what can give investors an edge is to look at macro trends that are bound to influence economies and returns on investments.

    In this article we are going to analyze productivity and trade balances among the most important global economic powers, and try to derive a long term trend from it in order to improve the international exposure in our portfolios. More →

  • 25 Aug
    The Future Will Blow Your Mind. How Can You Take Advantage Of It?

    The Future Will Blow Your Mind. How Can You Take Advantage Of It?

    • Global GDP has quadrupled in the last 35 years and will probably do so again in the next 35 years.
    • By 2050 it’s expected there will be 10 billion people on earth and most of them will be living a western lifestyle.
    • While the forecasts are pretty certain, the issue is that the way towards those forecasts will not be linear. Investors should be careful not to get excited and jump into bubbles.

    Introduction 

    Investing is both complicated and simple at the same time. Today we are going to show the simple side of investing by analyzing a few factors that are almost certain and that will have a huge influence on your investing returns. By analyzing a few global demographic and economic trends we can see where the world will be in the future and connect that with our investments pictures, a scenario that is actually mind-blowing. Keep reading… More →

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