Yesterday's post about diversity in emerging market selection prompted a reader to ask what my favorite ETFs are for the three countries mentioned (Brazil, China and Hungary).
Unfortunately I am going to let the reader down.
There was an article in the FT this morning by Tim Brown from a firm called Jewson & Associates about emerging market GDP growth versus emerging market stock market appreciation.
Toward the end there was a comment, really in passing, that I thought was very constructive. He disclosed that their three favorite emerging markets are Brazil, China and Hungary.
The recent hullabaloo in Russia is a classic example of the caution investors need to exercise when thinking about exchange traded funds (ETFs) in both frontier and emerging markets.
While many emerging markets have much in the way of allure - vast intellectual capital, seemingly unlimited natural resources - that allure can come in tandem with plenty of risk.
On August 20th I put up a post about Vietnam being in the middle of a stealth rally. Since then the stealthness has continued and, best as I can tell, it seems still that no one cares.
I'll keep this short but not so sweet. The light volume we are seeing on the market is a function of two things. First is the topic all media is talking about - the end of summer and final vacations. Yeah, yeah the week before Labor Day is traditionally light volume for that reason, but NOT this light!
If you ever bought a second Jimmy Buffet disc (we've got four) you might recognize the title of this post.
Key market bottoms are often very quiet, or at least happen without too much attention paid or credence given.
One market I have been keen on for a couple of years now is Vietnam. The population is young (average age around 20), the country is big (about 70 million people), labor is cheaper than China, people want to work and they might even have a little oil.
...if you have the time.
Over the years I have sought out various alternative assets to both write about and incorporate into the accounts I manage. The idea is simple; by allocating to disparate asset classes, with appropriate proportions, there is a good chance of achieving a better, long term risk adjusted result.
In the past, on my blog and for theStreet.com, I have written about absolute return funds, Canadian trusts that pay income from hydro electricity generation and foreign farmland stocks among others.
Since 2007, sovereign wealth funds have spent almost $80 billion to buy stakes in U.S. companies, in particular banks that were desperately in need of a capital infusion. Now, the International Herald Tribune is reporting that the lender of last resort may be having second thoughts. Even though most SWF don't have to report mark-to-market losses in public, they still want to make a return, and some high profile investments, such as those in Merrill Lynch (NYSE: MER), are not turning out as expected. Many SWF are now entering "south-south" trades, or in other words, simply investing in other emerging economies. While the moves are being made to not only look for higher return, south-south trades also prevent emerging economies (many of which got their start-up capital from the West) from simply recycling their funds back into these same economies. Oil-exporting countries for one are looking to hedge against oil price fluctuations by becoming underweight assets correlated with oil prices, i.e., just about everything U.S. based. If this trend persist, then many small, medium, and even large companies may start depending more on alternative forms of capital, such as the hedge fund lending discussed in a recent post.
bullbeartrader.com
Before getting to the main thrust of my article let me state several facts regarding my current trading positions in the market. First, equities remain in a bear market and are likely to do so for another 12 months. Two, I am positioned long and have been so for 4 weeks now for a contratrend rally. My long side bias is due to three factors: 1) the retail investor is bearish and this is a bull signal; 2) the smart money (see previous article) is bullish and this is a bull signal; 3) inflation pressures are moderating significantly. Now to my article which was written on August 3, 2008.
Turkey's recent introduction of the unique Infrastructure Investment Trust (IIT) is the latest reminder of the vast opportunity existent in the developing economies of the world. This privatization of infrastructure development is a powerful force which is not only driving investment globally, but also creating opportunities for investors.
