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.
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.
I've always liked the idea of investing in emerging markets but you have to be prepared for the higher risks and unpredictability that comes with it. Rather than a general emerging market ETF, I find it better to look at regions or even individual countries. The risk profile of even the biggest countries, China, India, Brazil, Pakistan, Nigeria etc are very different from each other.
How many centuries before an “emerging” market is simply considered “poorly run”? If you’re short the $, then just short the $. No need to buy garbage.
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.
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.
I've always liked the idea of investing in emerging markets but you have to be prepared for the higher risks and unpredictability that comes with it. Rather than a general emerging market ETF, I find it better to look at regions or even individual countries. The risk profile of even the biggest countries, China, India, Brazil, Pakistan, Nigeria etc are very different from each other.
Emerging markets ETFs and single country ETFs pay higher dividends than ETFs representing American indexes do.
How many centuries before an “emerging” market is simply considered “poorly run”? If you’re short the $, then just short the $. No need to buy garbage.