Anothe " Buy High, Sell Higher" Recommendation. Where were all these "experts" in Nov ?
Emerging-Market Stocks Will Surge 39%, JPMorgan Says (Update2) By Michael Patterson
April 16 (Bloomberg) -- Emerging-market stocks will surge a further 39 percent this year as government spending and interest-rate cuts from China to the U.S. revive demand for developing nations’ exports, JPMorgan Chase & Co. said.
The MSCI Emerging Markets Index will climb to 900, the highest level for the 23-nation benchmark since Sept. 8, a week before New York-based Lehman Brothers Holdings Inc.’s bankruptcy froze global credit markets and sparked an exodus from emerging- market assets, according to JPMorgan. The MSCI gauge added as much as 1.6 percent to a six-month high of 654 today, extending this year’s rally to 15 percent.
“There are significant tailwinds for emerging-market economies,†Adrian Mowat, the chief Asia and emerging-market strategist at JPMorgan in Hong Kong, wrote in a note. “As the evidence mounts, the bears are being dragged into the markets.â€
The prediction follows a six-week rally in emerging-market equities that pushed the MSCI index up 36 percent since March 2. Mowat joins Morgan Stanley strategist Jonathan Garner and investors including Templeton Asset Management Ltd.’s Mark Mobius in predicting developing-nation equities will rebound further from a tumble last year that dragged the MSCI gauge down a record 55 percent.
‘Cyclical’ Trade
Investors should buy shares in “cyclical†industries including technology that rely on economic growth, while selling so-called defensive stocks such as phone companies, Mowat wrote in the note dated yesterday. He recommended “overweight†positions in Taiwan, South Korea, Mexico, China and Thailand.
An overweight rating means investors should hold more of the shares than are represented in benchmark indexes.
Emerging-market stocks climbed today as investors speculated government efforts to revive economic growth are working. Turkey’s ISE National 100 Index rose 3.1 percent for the biggest advance in Europe, while Taiwan’s Taiex index led gains in Asia with a 2.1 percent increase. The MSCI index rose 0.2 percent to 645.31 as of 12:47 p.m. in London.
The Federal Reserve said yesterday that the contraction slowed across several of the biggest regional economies in the U.S. last month, with some industries “stabilizing at a low level.†The Fed has committed to buy or loan against everything from corporate debt, mortgages and consumer loans to government debt, after cutting its benchmark rate to zero.
While China’s economy expanded at the slowest pace in almost 10 years in the first quarter, growth in industrial production and investment has accelerated, adding to evidence that Premier Wen Jiabao’s 4 trillion-yuan ($585 billion) stimulus plan is working. Policy makers have cut their benchmark interest rate five times since September to help cushion the fastest-growing major economy from a slump in exports to the U.S. and Europe.
Favorable Policy
“For emerging markets we would argue that the environment may now be more favorable than pre-Lehman bankruptcy,†Mowat wrote. While economic activity is still below levels in the third quarter of last year, “policy is now very favorable,†he wrote.
Lehman, once the fourth-biggest U.S. investment bank, filed for bankruptcy protection on Sept. 15 after losses on mortgage securities drove away lenders and potential suitors. Financial companies worldwide posted more than $1.2 trillion of asset writedowns and credit losses since 2007, dragging the global economy into its first recession since World War II.
http://www.bloomberg.com/apps/news?pid= ... ingmarkets
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Emerging Markets 01 (May 08 - Dec 11)
Re: Emerging Markets
by winston » Thu Apr 16, 2009 9:12 pm
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Emerging Markets
by winston » Fri Apr 17, 2009 8:43 am
Here's a One-Week Trade Good for 25% By Jeff Clark
It is a different market today than it was six weeks ago.
Back then, I warned short sellers they were about to get wiped out. Since that essay, the S&P 500 has rallied 20%. The Dow is up over 1,000 points. And investors are breathing a sigh of relief that the worst is over. Indeed, the strength of the recent rally seems to have just about everyone thinking we've entered a new bull market.
While I'd love to join the ever-expanding chorus of cheerleaders yelling out, "Give me a B... Give me a U... Give me an L – L," we'd have to add four more letters to express my true thoughts. The rally has been nice, but it's not the start of a brand new bull market. Stocks will be lower later this year. In fact, they'll probably be lower by next week.
Stocks are in an intermediate-term rally within the confines of a larger bear market. These types of rallies typically unfold in two strong waves higher, separated by one quick and severe decline.
So far, we've seen the first wave up. The rally off the early March lows has been impressive. But stocks are now stretched too far to the upside, and investors are a bit too giddy about their future profits. So the stage is set for a pretty good smackdown.
Short-term traders can take on a short position or two right here. One of the sectors that looks most vulnerable for a pullback is emerging markets.
The MSCI Emerging Markets Index is up 33% from its early March low. It's hugely extended. And if our stock market corrects here, then emerging markets are likely to get hit even harder.
One way to trade this move is through the ProShares UltraShort Emerging Markets exchange traded fund (EEV). EEV is designed to return the inverse performance of the MSCI Emerging Markets Index. So EEV rallies as emerging markets decline, and it declines as emerging markets rally. Here's a recent chart...
This is the epitome of a bullish falling-wedge pattern. This pattern forms when a stock makes a series of lower highs and lower lows, and the range between the two gets smaller and smaller.
Most often, these patterns break out to the upside in a dramatic burst of energy – which is consistent with my expectation for a quick and severe decline in the broad stock market. If this pattern plays out, then EEV could rapidly run to $40 per share or higher. That's a gain of 25% or more from current levels – and it could happen within the next week.
Be sure to take profits quickly, though. The intermediate-term rally still has one more wave higher to go. When that's done, we'll be looking to set up some longer-term short sales.
http://www.growthstockwire.com/archive/ ... apr_16.asp
It is a different market today than it was six weeks ago.
Back then, I warned short sellers they were about to get wiped out. Since that essay, the S&P 500 has rallied 20%. The Dow is up over 1,000 points. And investors are breathing a sigh of relief that the worst is over. Indeed, the strength of the recent rally seems to have just about everyone thinking we've entered a new bull market.
While I'd love to join the ever-expanding chorus of cheerleaders yelling out, "Give me a B... Give me a U... Give me an L – L," we'd have to add four more letters to express my true thoughts. The rally has been nice, but it's not the start of a brand new bull market. Stocks will be lower later this year. In fact, they'll probably be lower by next week.
Stocks are in an intermediate-term rally within the confines of a larger bear market. These types of rallies typically unfold in two strong waves higher, separated by one quick and severe decline.
So far, we've seen the first wave up. The rally off the early March lows has been impressive. But stocks are now stretched too far to the upside, and investors are a bit too giddy about their future profits. So the stage is set for a pretty good smackdown.
Short-term traders can take on a short position or two right here. One of the sectors that looks most vulnerable for a pullback is emerging markets.
The MSCI Emerging Markets Index is up 33% from its early March low. It's hugely extended. And if our stock market corrects here, then emerging markets are likely to get hit even harder.
One way to trade this move is through the ProShares UltraShort Emerging Markets exchange traded fund (EEV). EEV is designed to return the inverse performance of the MSCI Emerging Markets Index. So EEV rallies as emerging markets decline, and it declines as emerging markets rally. Here's a recent chart...
This is the epitome of a bullish falling-wedge pattern. This pattern forms when a stock makes a series of lower highs and lower lows, and the range between the two gets smaller and smaller.
Most often, these patterns break out to the upside in a dramatic burst of energy – which is consistent with my expectation for a quick and severe decline in the broad stock market. If this pattern plays out, then EEV could rapidly run to $40 per share or higher. That's a gain of 25% or more from current levels – and it could happen within the next week.
Be sure to take profits quickly, though. The intermediate-term rally still has one more wave higher to go. When that's done, we'll be looking to set up some longer-term short sales.
http://www.growthstockwire.com/archive/ ... apr_16.asp
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Emerging Markets
by winston » Thu Apr 23, 2009 4:20 pm
Emerging-Market Short Sales Climb Most Since 2007 as Rally Ebbs By Michael Patterson and Alexander Ragir
April 23 (Bloomberg) -- Short sellers are increasing bets against developing-nation stocks by the most since March 2007, a signal the biggest rally in 16 years may fizzle as profits plunge from Brazil to Taiwan.
Short interest in the iShares MSCI Emerging Markets Index fund, which tracks equities in 23 developing nations, climbed 51 percent in March, the biggest jump in two years, according to New York Stock Exchange data compiled by Bloomberg. Wagers against Rio de Janeiro-based oil company Petroleo Brasileiro SA’s U.S.-traded shares were the highest since August 2005. Those against display maker AU Optronics Corp. of Hsinchu, Taiwan surged to an eight-month high, the data show.
The growth in short sales, where investors borrow stock and sell it on the expectation prices will fall, marks a shift from the last three rebounds in emerging-market stocks. In those cases traders closed out their bets. The MSCI gauge, up 32 percent from its 2009 low on March 2, may drop 10 percent in coming weeks as falling earnings damp investor optimism, ING Investment Management SA’s Eric Conrads said.
“We aren’t out of the woods,†said Conrads, a Mexico City-based hedge fund manager at ING, which oversees $12 billion in emerging-market assets. Conrads started betting against developing-nation equities this month, convinced the stocks are in a “bear-market rally,†he said.
Traders who increased short positions in the iShares fund during the 40 percent rally in emerging-market stocks from August 2007 to October 2007 proved prescient.
Bear Market
The MSCI gauge peaked at a record 1,338.49 on Oct. 29, 2007, and tumbled 66 percent through Oct. 27 last year, the worst bear market in the index’s 20-year history. The retreat was spurred by a collapse in U.S. consumer spending and a freeze in credit markets that sent the global economy into its first recession since World War II.
MSCI’s emerging-market index climbed as much as 34 percent from October 2008 to January as short sellers ended 52 percent of their bets against the iShares fund on speculation that the worst of the economic contraction was over. As the index kept climbing in March, posting its best month since 1993, short interest surged to 96.1 million shares, or 11 percent of the fund’s total shares outstanding, the NYSE data show.
Short interest in all stocks traded on the NYSE rose 11 percent last month to 4.23 percent of shares outstanding. The NYSE releases short interest data to mid-April at the end of this week.
Equity prices climbed too fast after March 1 given the outlook for earnings, said Martin Herbon, who manages a Latin America hedge fund for Geneva-based Union Capital Group SA.
Emerging-market profits may drop 26 percent this year, according to Citigroup Inc. Taiwan companies may post a 29 percent slide in net income, the steepest decline among developing countries in Asia, and Brazilian earnings may fall 37 percent, the most in Latin America, the New York-based bank said in an April 15 research note.
Trailing Estimates
Twenty-nine of the 41 companies in the MSCI index that posted profits since the end of the first quarter trailed analysts’ estimates, according to Bloomberg data. The gauge trades at 11.4 times earnings, near the most expensive in almost nine months, the data show. At least 256 companies in the index are scheduled to report earnings in the next month.
“Prices have gone up, but the earnings still need some reviews,†said Herbon, who helps oversee $900 million and is using exchange-traded funds to bet on declines in Brazilian shares. This rally “seems too early,†he said.
The MSCI gauge posted an average decline of 1.6 percent during three-month periods following jumps of at least 25 percent in short interest on the iShares fund since 2006, according to Bloomberg data.
False Signals
Increases in short sales sometimes send false sell signals. The MSCI gauge rose 16 percent in three months after a 41 percent jump in short interest in September 2006. When short sales climbed 59 percent in March 2007, the MSCI gauge added 19 percent in the next three months.
Traders are too bearish and the latest equity rally is the beginning of a new bull market, according to Templeton Asset Management Ltd.’s Mark Mobius, Traxis Partners LLC’s Barton Biggs and Fisher Investments Inc.’s Kenneth Fisher, who together oversee more than $40 billion.
“The market is beginning to tentatively price in the likelihood of an economic recovery,†said Christopher Palmer, who helps manage about $4 billion as the London-based head of global emerging markets at Gartmore Investment Management Ltd.
The International Monetary Fund said yesterday that the global recession will be deeper and the recovery slower than previously thought. It’s still too early to turn bullish on emerging-market stocks because there’s a risk the global economy will deteriorate, said Jason Hepner, an Edinburgh-based money manager at Standard Life Investments Ltd., which oversees about $178 billion. Hepner is holding fewer emerging-market shares than are represented in benchmark indexes.
“We’re looking for clear signs of bottoming in global growth before turning positive on emerging-market equities.â€
April 23 (Bloomberg) -- Short sellers are increasing bets against developing-nation stocks by the most since March 2007, a signal the biggest rally in 16 years may fizzle as profits plunge from Brazil to Taiwan.
Short interest in the iShares MSCI Emerging Markets Index fund, which tracks equities in 23 developing nations, climbed 51 percent in March, the biggest jump in two years, according to New York Stock Exchange data compiled by Bloomberg. Wagers against Rio de Janeiro-based oil company Petroleo Brasileiro SA’s U.S.-traded shares were the highest since August 2005. Those against display maker AU Optronics Corp. of Hsinchu, Taiwan surged to an eight-month high, the data show.
The growth in short sales, where investors borrow stock and sell it on the expectation prices will fall, marks a shift from the last three rebounds in emerging-market stocks. In those cases traders closed out their bets. The MSCI gauge, up 32 percent from its 2009 low on March 2, may drop 10 percent in coming weeks as falling earnings damp investor optimism, ING Investment Management SA’s Eric Conrads said.
“We aren’t out of the woods,†said Conrads, a Mexico City-based hedge fund manager at ING, which oversees $12 billion in emerging-market assets. Conrads started betting against developing-nation equities this month, convinced the stocks are in a “bear-market rally,†he said.
Traders who increased short positions in the iShares fund during the 40 percent rally in emerging-market stocks from August 2007 to October 2007 proved prescient.
Bear Market
The MSCI gauge peaked at a record 1,338.49 on Oct. 29, 2007, and tumbled 66 percent through Oct. 27 last year, the worst bear market in the index’s 20-year history. The retreat was spurred by a collapse in U.S. consumer spending and a freeze in credit markets that sent the global economy into its first recession since World War II.
MSCI’s emerging-market index climbed as much as 34 percent from October 2008 to January as short sellers ended 52 percent of their bets against the iShares fund on speculation that the worst of the economic contraction was over. As the index kept climbing in March, posting its best month since 1993, short interest surged to 96.1 million shares, or 11 percent of the fund’s total shares outstanding, the NYSE data show.
Short interest in all stocks traded on the NYSE rose 11 percent last month to 4.23 percent of shares outstanding. The NYSE releases short interest data to mid-April at the end of this week.
Equity prices climbed too fast after March 1 given the outlook for earnings, said Martin Herbon, who manages a Latin America hedge fund for Geneva-based Union Capital Group SA.
Emerging-market profits may drop 26 percent this year, according to Citigroup Inc. Taiwan companies may post a 29 percent slide in net income, the steepest decline among developing countries in Asia, and Brazilian earnings may fall 37 percent, the most in Latin America, the New York-based bank said in an April 15 research note.
Trailing Estimates
Twenty-nine of the 41 companies in the MSCI index that posted profits since the end of the first quarter trailed analysts’ estimates, according to Bloomberg data. The gauge trades at 11.4 times earnings, near the most expensive in almost nine months, the data show. At least 256 companies in the index are scheduled to report earnings in the next month.
“Prices have gone up, but the earnings still need some reviews,†said Herbon, who helps oversee $900 million and is using exchange-traded funds to bet on declines in Brazilian shares. This rally “seems too early,†he said.
The MSCI gauge posted an average decline of 1.6 percent during three-month periods following jumps of at least 25 percent in short interest on the iShares fund since 2006, according to Bloomberg data.
False Signals
Increases in short sales sometimes send false sell signals. The MSCI gauge rose 16 percent in three months after a 41 percent jump in short interest in September 2006. When short sales climbed 59 percent in March 2007, the MSCI gauge added 19 percent in the next three months.
Traders are too bearish and the latest equity rally is the beginning of a new bull market, according to Templeton Asset Management Ltd.’s Mark Mobius, Traxis Partners LLC’s Barton Biggs and Fisher Investments Inc.’s Kenneth Fisher, who together oversee more than $40 billion.
“The market is beginning to tentatively price in the likelihood of an economic recovery,†said Christopher Palmer, who helps manage about $4 billion as the London-based head of global emerging markets at Gartmore Investment Management Ltd.
The International Monetary Fund said yesterday that the global recession will be deeper and the recovery slower than previously thought. It’s still too early to turn bullish on emerging-market stocks because there’s a risk the global economy will deteriorate, said Jason Hepner, an Edinburgh-based money manager at Standard Life Investments Ltd., which oversees about $178 billion. Hepner is holding fewer emerging-market shares than are represented in benchmark indexes.
“We’re looking for clear signs of bottoming in global growth before turning positive on emerging-market equities.â€
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Emerging Markets
by blid2def » Fri Apr 24, 2009 12:15 am
10 Countries in Deep Trouble
* Matthew Bandyk
* Monday April 20, 2009, 10:32 am EDT
Five Countries in Deep Trouble
-- Mexico, Pakistan, Ukraine, Venezuela, Argentina
Five Countries to Keep An Eye On
-- Latvia, Croatia, Kazakhstan, Vietnam, Belarus
Details: http://finance.yahoo.com/news/10-Countr ... eal-estate
* Matthew Bandyk
* Monday April 20, 2009, 10:32 am EDT
Five Countries in Deep Trouble
-- Mexico, Pakistan, Ukraine, Venezuela, Argentina
Five Countries to Keep An Eye On
-- Latvia, Croatia, Kazakhstan, Vietnam, Belarus
Details: http://finance.yahoo.com/news/10-Countr ... eal-estate
- blid2def
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Re: Emerging Markets
by winston » Thu May 14, 2009 3:51 pm
Harvard Buys Korea, Brazil ETFs as Emerging Markets Beat U.S. By Gillian Wee
May 14 (Bloomberg) -- Harvard University, the richest U.S. college, raised its holdings of exchange-traded funds that track stocks in Brazil, China and Mexico in the first quarter as emerging markets outperformed U.S. equities.
http://www.bloomberg.com/apps/news?pid= ... r=currency
May 14 (Bloomberg) -- Harvard University, the richest U.S. college, raised its holdings of exchange-traded funds that track stocks in Brazil, China and Mexico in the first quarter as emerging markets outperformed U.S. equities.
http://www.bloomberg.com/apps/news?pid= ... r=currency
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Emerging Markets
by winston » Sat May 23, 2009 7:33 am
A surge in optimism on global economic growth prospects has created "bubble-like levels" in emerging markets, according to Merrill Lynch.
In a monthly survey published by the investment bank on Wednesday, Merrill warned that optimism on emerging markets was "extreme" and said investors in those markets would be more vulnerable to bad news than in other regions.
A net 46 per cent of the 220 fund managers surveyed – who together oversee about $617bn – said they were overweight on emerging markets, up from 26 per cent last month and the highest reading since October 2007.
China, which has seen its main Shanghai Composite index rise by 45 per cent this year in local currency terms, was by far the most popular of the emerging markets among investors.
– Financial Times
In a monthly survey published by the investment bank on Wednesday, Merrill warned that optimism on emerging markets was "extreme" and said investors in those markets would be more vulnerable to bad news than in other regions.
A net 46 per cent of the 220 fund managers surveyed – who together oversee about $617bn – said they were overweight on emerging markets, up from 26 per cent last month and the highest reading since October 2007.
China, which has seen its main Shanghai Composite index rise by 45 per cent this year in local currency terms, was by far the most popular of the emerging markets among investors.
– Financial Times
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Emerging Markets
by winston » Mon Jun 01, 2009 10:18 pm
Traders Take Note: These 'Risky' Stocks Are Dominating By Tom Dyson, Daily Wealth
There's a runaway freight train in the markets. This group of stocks has the strongest uptrend anywhere in the world... and it's still getting stronger.
If there's one group of stocks you need to own right now, it's this group. Let me show you why...
Every month, analysts at the Conference Board survey 5,000 households and use the data to produce an index of consumer sentiment. This week, the reading for May came out. It jumped to its highest level since September 2008, when Lehman Brothers failed... and has now risen for three consecutive months.
As Steve wrote in Friday's edition of DailyWealth, "History shows stocks tend to keep rallying for many months after consumer confidence bottoms. It's true in every instance going back to the 1970s, when monthly consumer confidence data starts."
Consumer confidence bottomed in February... and the stock market began its rally in March. The S&P 500 is now up 36%. If consumer confidence history is any guide, this rally could easily continue into the fall and take the S&P 500 over 1,000...
When the stock market rallies, there's always one sector or group of stocks that leads the market higher. But it's never the same sector... and the leaders often rotate. It's like watching a horse race. The jockeys are jostling for position, and the leadership of the race is constantly changing...
To maximize the performance of your capital in stock market rallies, you always want to own these market leaders. They rise much higher than the market in general...
In the bull market in the late '90s, for example, Internet, communication, and tech stocks led the charge higher. Banks, real estate, infrastructure, and commodity stocks led the market from 2002-2007.
So which sectors are leading the current bull market higher?
I monitor a list of 86 exchange-traded funds (ETFs). These ETFs represent every major commodity, currency, country, and market sector in the world. Every week, I calculate the three-month performance of these funds to pinpoint the most powerful uptrends and downtrends in the world.
Today, emerging markets have seized the crown. Stocks in Russia, Brazil, and China embarked on huge rallies. And as of this week, even more emerging-market stocks have entered the fray...
Right now, eight out of the top 10 market sectors are foreign funds. They also dominate the top 20 market sectors, with 14 spots including the countries above along with India, Indonesia, Turkey, Ireland, Austria, Taiwan, South Korea, Singapore, Mexico, Canada, and Hong Kong.
These foreign funds are up a minimum of 47% since late February. The Russia fund has doubled, and India's not far behind.
Notice the troubled countries in this list. Ireland had a major banking breakdown. Russia is dependent on oil and has one of the world's most unstable economies. Austrian banks have the most exposure to the meltdown in Eastern Europe.
But when it comes to trading, I learned a long time ago you don't make money by predicting or trying to time the market. It's far better to let the market tell you what to do. If the market's rising, you buy. And if the market's falling, you sell. Right now, there's only one sensible position to have in the market, and that's to be long.
If you're looking to buy into the current stock market rally, as I am, I suggest you focus on emerging markets in general... or Russia and India in particular. These are the market's strongest uptrends. It's likely these stocks will continue to lead the market higher and show you the greatest profit...
There's a runaway freight train in the markets. This group of stocks has the strongest uptrend anywhere in the world... and it's still getting stronger.
If there's one group of stocks you need to own right now, it's this group. Let me show you why...
Every month, analysts at the Conference Board survey 5,000 households and use the data to produce an index of consumer sentiment. This week, the reading for May came out. It jumped to its highest level since September 2008, when Lehman Brothers failed... and has now risen for three consecutive months.
As Steve wrote in Friday's edition of DailyWealth, "History shows stocks tend to keep rallying for many months after consumer confidence bottoms. It's true in every instance going back to the 1970s, when monthly consumer confidence data starts."
Consumer confidence bottomed in February... and the stock market began its rally in March. The S&P 500 is now up 36%. If consumer confidence history is any guide, this rally could easily continue into the fall and take the S&P 500 over 1,000...
When the stock market rallies, there's always one sector or group of stocks that leads the market higher. But it's never the same sector... and the leaders often rotate. It's like watching a horse race. The jockeys are jostling for position, and the leadership of the race is constantly changing...
To maximize the performance of your capital in stock market rallies, you always want to own these market leaders. They rise much higher than the market in general...
In the bull market in the late '90s, for example, Internet, communication, and tech stocks led the charge higher. Banks, real estate, infrastructure, and commodity stocks led the market from 2002-2007.
So which sectors are leading the current bull market higher?
I monitor a list of 86 exchange-traded funds (ETFs). These ETFs represent every major commodity, currency, country, and market sector in the world. Every week, I calculate the three-month performance of these funds to pinpoint the most powerful uptrends and downtrends in the world.
Today, emerging markets have seized the crown. Stocks in Russia, Brazil, and China embarked on huge rallies. And as of this week, even more emerging-market stocks have entered the fray...
Right now, eight out of the top 10 market sectors are foreign funds. They also dominate the top 20 market sectors, with 14 spots including the countries above along with India, Indonesia, Turkey, Ireland, Austria, Taiwan, South Korea, Singapore, Mexico, Canada, and Hong Kong.
These foreign funds are up a minimum of 47% since late February. The Russia fund has doubled, and India's not far behind.
Notice the troubled countries in this list. Ireland had a major banking breakdown. Russia is dependent on oil and has one of the world's most unstable economies. Austrian banks have the most exposure to the meltdown in Eastern Europe.
But when it comes to trading, I learned a long time ago you don't make money by predicting or trying to time the market. It's far better to let the market tell you what to do. If the market's rising, you buy. And if the market's falling, you sell. Right now, there's only one sensible position to have in the market, and that's to be long.
If you're looking to buy into the current stock market rally, as I am, I suggest you focus on emerging markets in general... or Russia and India in particular. These are the market's strongest uptrends. It's likely these stocks will continue to lead the market higher and show you the greatest profit...
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
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Re: Emerging Markets
by millionairemind » Tue Jun 16, 2009 11:20 am
Emerging markets 'decoupling' theory is back, but it's still wrong
Jun 11, 2009
Remember decoupling? The theory, which was fashionable two years ago, held that emerging economies and markets, notably Asia, could shrug off a downturn in the industrialised world.
But as global growth and equities slumped last year, emerging economies tanked, and the MSCI Emerging Markets index fell by 53% from its peak. Yet now decoupling is back in fashion.
The FTSE Emerging Markets index has gained 72% since it bottomed in October, outperforming the developed markets index (which only bottomed in March) by almost 50%. This year alone Russia and India have gained 70% and 62% in dollar terms, while the MSCI Asia ex-Japan index is up by 34%. Money is pouring into emerging markets, says John Authers in the FT, in the hope that developing countries, especially China, "will pull the world through".
Asia is still struggling…
But can they? Of the major emerging markets, Brazil and Russia look set to shrink this year, while on the Asian front even in China "the trajectory of recovery will be less dramatic than those V-shaped projections suggest", says Lex in the FT. Government stimulus has ensured a sharp rebound in loan growth and has stimulated investment and manufacturing, which is growing again. On the other hand, waning electricity consumption and softening steel production point to weak demand at home and abroad, and exports remain weak, dropping 23% year-on-year in April. Across Asia, April's data may have been encouraging, but last month, for instance, Korean exports fell by more than in April.
… and it can't lead the world anyway
So the picture in Asia and China is hardly unequivocally positive. Even if it were, there's a hitch, says Stephen Roach of Morgan Stanley in Time: "Asia remains an export machine", with demand for its goods underpinned by industrialised world consumers, especially America's.
The share of GDP comprised by exports across Asia hit a record 47% in 2007, while the importance of consumption has declined. And now "overly indebted, savings-short" US consumers, the world's biggest spenders, are "tapped out".
With their wealth plummeting as house prices decline, and unemployment rising, their spending is likely to be subdued for years. Export-led China is unlikely to get a "kick" from the US consumer, raising the spectre of a "relapse" for China-led Asia. "Asian-led global healing remains a real stretch." The shrinking developed economies still account for almost 75% of the global economy, says Alexandre Kateb on Seekingalpha.com. China still depends on the rest of the world.
The rally looks vulnerable
On top of that, emerging market valuations "are no longer attractive", according to Morgan Stanley. In Asia ex-Japan, the price-to-book value ratio has jumped to 1.8, the 30-year average. Yet these are hardly "average times", given that the data is still deteriorating, says Citigroup.
Meanwhile, earnings forecasts suggest that this regional profit downturn will have been the second-shallowest on record. The emerging markets rally looks "overdone", says Thomas Gerhardt, manager of the DWS Bric fund. In short, the emerging market sector is a "geared play on the developed world", as Nigel Rendell of RBC Capital markets puts it. With the V-shaped recovery investors are hoping for unlikely to occur, emerging market investors face a rocky ride.
Jun 11, 2009
Remember decoupling? The theory, which was fashionable two years ago, held that emerging economies and markets, notably Asia, could shrug off a downturn in the industrialised world.
But as global growth and equities slumped last year, emerging economies tanked, and the MSCI Emerging Markets index fell by 53% from its peak. Yet now decoupling is back in fashion.
The FTSE Emerging Markets index has gained 72% since it bottomed in October, outperforming the developed markets index (which only bottomed in March) by almost 50%. This year alone Russia and India have gained 70% and 62% in dollar terms, while the MSCI Asia ex-Japan index is up by 34%. Money is pouring into emerging markets, says John Authers in the FT, in the hope that developing countries, especially China, "will pull the world through".
Asia is still struggling…
But can they? Of the major emerging markets, Brazil and Russia look set to shrink this year, while on the Asian front even in China "the trajectory of recovery will be less dramatic than those V-shaped projections suggest", says Lex in the FT. Government stimulus has ensured a sharp rebound in loan growth and has stimulated investment and manufacturing, which is growing again. On the other hand, waning electricity consumption and softening steel production point to weak demand at home and abroad, and exports remain weak, dropping 23% year-on-year in April. Across Asia, April's data may have been encouraging, but last month, for instance, Korean exports fell by more than in April.
… and it can't lead the world anyway
So the picture in Asia and China is hardly unequivocally positive. Even if it were, there's a hitch, says Stephen Roach of Morgan Stanley in Time: "Asia remains an export machine", with demand for its goods underpinned by industrialised world consumers, especially America's.
The share of GDP comprised by exports across Asia hit a record 47% in 2007, while the importance of consumption has declined. And now "overly indebted, savings-short" US consumers, the world's biggest spenders, are "tapped out".
With their wealth plummeting as house prices decline, and unemployment rising, their spending is likely to be subdued for years. Export-led China is unlikely to get a "kick" from the US consumer, raising the spectre of a "relapse" for China-led Asia. "Asian-led global healing remains a real stretch." The shrinking developed economies still account for almost 75% of the global economy, says Alexandre Kateb on Seekingalpha.com. China still depends on the rest of the world.
The rally looks vulnerable
On top of that, emerging market valuations "are no longer attractive", according to Morgan Stanley. In Asia ex-Japan, the price-to-book value ratio has jumped to 1.8, the 30-year average. Yet these are hardly "average times", given that the data is still deteriorating, says Citigroup.
Meanwhile, earnings forecasts suggest that this regional profit downturn will have been the second-shallowest on record. The emerging markets rally looks "overdone", says Thomas Gerhardt, manager of the DWS Bric fund. In short, the emerging market sector is a "geared play on the developed world", as Nigel Rendell of RBC Capital markets puts it. With the V-shaped recovery investors are hoping for unlikely to occur, emerging market investors face a rocky ride.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch
Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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millionairemind - Big Boss
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Re: Emerging Markets
by LenaHuat » Thu Jun 18, 2009 9:10 pm
What if the cleric-based Iranian regime collapses and Iran embraces capitalism like the Indian and Chinese economies? 
Iran has great potential and resources. If it joins BRIC, will we have :-
(a) BRIC-I
(b) BRICI
(c) BRIIC
(d) what else??
Iran has great potential and resources. If it joins BRIC, will we have :-
(a) BRIC-I
(b) BRICI
(c) BRIIC
(d) what else??
Please be forewarned that you are reading a post by an otiose housewife. 
****@@
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LenaHuat - Big Boss
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Re: Emerging Markets
by mojo_ » Thu Jun 18, 2009 11:48 pm
Lena, how about BIRICI?
Time for Goldman to Add Indonesia to the BRICs
Commentary by William Pesek
May 28 (Bloomberg) -- Muhammad Lutfi dreams with the BRICs.
The head of the Indonesian Investment Coordination Board still scratches his head over why more money isn't rushing into Southeast Asia's biggest economy. Why, he asks, do Brazil, Russia, India and China, the so-called BRICs, get more attention?
``I was shocked a few years back to see that Indonesia was not a BRIC,'' Lutfi said on May 22 at a EuroMoney conference in Bali. ``It should be.''
Lutfi's views have a rose-colored-glasses feel that can seem excessive, yet the point is worth considering.
Not what but when.
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mojo_ - Foreman
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