Emerginvest

China and Brazil Offer Positive Emerging Market Returns

Teak,

Thanks for posting. I completely agree that most of the value for EM is in the long-term. When you look at certain completely downtrodden market/sectors like India's banking sector down 70% - its hard to not see the value in the long term.

I'm sure you read my above reply, and do agree that there is a significant amount of volatility left. However, with my Sri Lanka example - after I wrote my article there were still a few weeks of significant growth before it cooled off. I'm not advocating "day-trading" in such relatively unknown markets at Sri Lanka, but my point is that there seems to be a trend of growth spurts of a few weeks to a month where markets tend to be exceptionally hot. In addition, I wanted to point out to most investors who are feeling that there is no where to turn, that there are plenty of good, solid EM countries which are producing significant returns right now. I think most people don't hear about, or discount places like India/China/Brazil because they seem unsafe, but yet they're producing far higher returns than the rest of the developed markets will for the next year at least.

In any regard, I agree - EM is a great place to be in a long position. Thanks for the post and I'm always interested in hearing more thoughts!

Best,
Jonathan

On Feb 11 05:29 PM Teak wrote:

> A long-term investor will be in all of these markets to the extent
> that they can handle the down-side movements psychologically. My
> issue with articles like these is that it comes across like advice
> for the day-trader.
>
> Why not be long in Brazil, and China, and Taiwan, and India?? Eventually,
> all of these will move higher. And if they move sideways, then they
> will kick out dividends. But, of course, you have to own something
> that pays through the dividends.

China and Brazil Offer Positive Emerging Market Returns

Larry,

I completely agree. There is still a tremendous amount of volatility, and such large upswings (10%+ in a week) inherently carry the high probability of equally strong downswings. For example, I wrote a piece a while back using Emerginvest's data on Sri Lanka (www.emerginvest.com/EI...), and how it was one of the best performing stock markets in the world for about a month - skyrocketing nearly 20% in 30 days. I warned in the article that it could easily overheat - which it did... cooling off and shedding some of its gains: (www.emerginvest.com/Wo...).

The point is, you are completely right. There is still a significant amount of turmoil.

Thanks for commenting!

Best,
Jonathan
Emerginvest


On Feb 11 11:01 AM Larry House wrote:

> The only thing I would add is Morgan Stanley is very cautious on
> Brazil in particular and EM companies in general stating that the
> worst is yet to come for them. Just today MS has a lengthy piece
> on Taiwan and the worsening problems there because of the degree
> of slow down in China. I think there is great potential in EM and
> great risk as well.