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Blake's avatar

Appreciate the insights on emerging markets, valuations and fundamental catalysts, Callum!

My past experience with broad EM investing highlighted significant issues: currency risk, inflation, low returns on capital, and generally lower quality businesses. It made me question why own them when leading US/DM companies already operate successfully in these markets at higher profitability based on selective entry, and increased transparency. Amazon and Pepsi are good examples.

Now I focus on select, high-quality EM businesses. I hold a 2% position in Kaspi (60% ROIC) and may re-establish a position in Walmart Mexico (17% ROIC). We'd be remiss not to mention Mercado Libre of course.

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William Strapazzon's avatar

I believe you will soon regret saying that ‘the US dollar has peaked for this cycle.’ You can only believe in this emerging markets optimism if you don’t live in one. I am in Brazil, where economic growth, inflation, fiscal policies, and public debt—every major variable—are deteriorating, while many here remain overly optimistic about the stock market’s future. I doubt it.

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