Home | About Us | Resources | Archive | Free Reports | Market Window |
This Year's Triple-Digit TradeBy
Tuesday, January 6, 2009
When emerging markets get going, they can go nuts. I think 2009 could be one of those "nuts" years for emerging-market stocks...
When I started my career in 1993, I specialized in international stocks, particularly Asian stocks.
The "king" back then was a guy named Mark Mobius. He ran the Templeton Emerging Markets Fund (he still does). Check out some of the returns on Mobius' fund over the years:
Mobius just about doubled investors' money in four different years. In three of the four years before Mobius doubled his investors' money, his fund lost value.
Last year was the fund's worst year ever... It lost over half its value. Emerging-market stocks in general lost more than 50% last year. Now they're cheaper than ever.
Importantly, they're cheaper today than they were before each of those near-triple-digit runs above.
When emerging-market stocks get cheap, they're usually on the brink of disaster. They've borrowed too much and then they have a massive currency crisis. But right now, emerging-market countries are in surprisingly good shape.
To show how cheap emerging markets are, and how much money you can make, take a look at this table of Hong Kong stocks I published in a recent issue of True Wealth:
As you can see, in late 2008, Hong Kong stocks got as cheap as they've been in the last 25 years. Back in 1984, Hong Kong stocks were cheaper... and they rose over 100% in just 12 months.
It's time to get exposure to emerging-market stocks, if you don't already have it. Investors have doubled their money when the time was right.
It's happened before... and we have the conditions right now for it to happen again.
Good investing,
Steve
Further Reading:
Are You a True Contrarian? Market NotesTHE EMERGING-MARKET TRADE IS BREAKING OUT Another note on the "long emerging markets" argument... we're seeing breakouts all over the place. |
Recent Articles
|