Jan

13

This presentation of GaveKal's, which is about emerging markets, eventually derives conclusions exclusively from the analysis (very interesting) of China. It gives the perception (on purpose?) that China=Asia. It does not take into account specific local realities, but it may be correct because a bubble bursting in China would have effects all over Asia. Structural forces at work in China would influence the whole region (or better continent).

These forces are pushing toward higher interests rates and currency valuations in Asia. Agricultural prices should also go up because of an expected increase in imports. Eventually, it poses to investors (for the next decade at least) the dilemma of Growth (emerging countries) vs Value (developed countries) on a global scale. The answer is: go for emerging countries. There may be difficult times ahead globally and also regionally (a bubble in Asia?), but that is in the long term where money is made. Being long emerging markets and short developed countries could be an option. Especially Europe appears pretty weak with PIIGS chronically below average growth level and paying higher interest on their debt. How long can they manage? This could be the plan of financial forces (seen as evil, aka speculators) (with a lot of politics involved).


Comments

Name

Email

Website

Speak your mind

Archives

Resources & Links

Search