Back to Emerging Market Stocks

Mon, 2017/08/07 - 2:45pm | Your editor
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We have returned to an old favorite sector today, nudged by the Wall Street Journal, emerging market stocks. Why? There are a host of reasons starting with the declining dollar and the robust global economy.

Third world countries gain from commodity demand and from lower borrowing costs in US$s. However they also gain from their own internally generated growth in consumption, the major trend in the 21st century which is different this time.

Thus despite the macro factors YTD going against them (at least according to theory) the well-managed contingent of emerging market corporates, including (oops) banks, have performed well year to date. Mark Mobius, the emerging market guru of the Templeton Group, used to say that he avoids companies favored either by “bancos or planos” but that was based on 1970s parameters in a different era.

But the main reason for grabbing at emerging market shares—not all of which have to be based in countries designated as being in the grouping—is that they increase our diversification level.

Too many shares in the developed countries of North America, Europe, and Japan are no longer appealingly bargain-priced. You have to look more widely. Today we do so.

We also have news from Japan, Mexico, Israel, Britain, Canada, Brazil, Denmark, South Korea,South Africa, Australia, Argentina, Chile, China, Hong Kong, South Korea, and Japan and a batch of emerging markets.

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