Where the Buys Are

Emerging markets are cheaper than their developed counterparts with far more growth. Earnings for the MSCI Emerging Markets index are expected to grow at 15% over the long term, versus 12% for MSCI World index.

Recent Change P/E** 2011**
Market Index Level YTD 1-Yr 3-Yr* 2011 2012 Price/Book
Brazil Bovespa 52,482.82 -23.30% -21.40% -0.10% 8.6 7.6 1.2
Comments: Latin America’s economic dynamo selling at relatively low valuation.
China Shanghai 2,534.36 -8.9 -4 5.1 11.7 9.7 1.8
Comments: Concerns of hard-landing for economy could be priced into stocks.
Russia RTS 1,535.72 -10.5 8.6 -2.4 5 4.7 0.9
Comments: Should benefit if oil stabilizes, and very cheap.
South Korea Kospi 1,744.88 -9.3 5.6 7.4 8.7 7.6 1.1
Comments: Some analysts expect 2011 GDP to grow a sturdy 5%.
Taiwan Taiex 7,342.96 -15.1 -3.9 6.7 12.9 10.7 1.5
Comments: Reasonably valued, big commodity exporter.
India Sensex 16,469.80 -19.7 -9.8 5.4 13.4 11.5 2.4
Comments: One of worst-performing markets this year but GDP still growing strong.
MSCI Emerging Markets 41,204.16 -14.5 -4.6 1.1 12.6 N/A 1.9
Comments: Impressive GDP growth, well-run economy merit premium valuation.
MSCI World 782.98 -12.8 -2.8 -6.5 14.4 N/A 1.8
*Annualzed. **Estimated. Sources: Bloomberg; MSCI

China, Brazil and South Korea, it bears noting, are among the biggest and most liquid markets in the developing world.


It’s Time to Buy
Barron’s AUGUST 20, 2011

Category: Index/ETFs, Investing, Markets

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12 Responses to “Barron’s: Buy Emerging Markets”

  1. farmera1 says:

    Here is some dude touting Singapore. I know nothing about Singapore or the writer. Just post this a piece of info (aka random noise worth a look).


    I do know big pharma has put lots of bucks into building manufacturing facilities in Singapore. That might tell you something.

  2. mathman says:

    What happens to export-based economies when the rest of the world is in a deep recession?

    Austerity measures being put in place by many countries almost guarantees that imports will drop precipitously there as people buy necessities only and put off repairs, medical treatment and other
    expenditures until “things” improve.

    The banking situation hasn’t been fixed, nor has all the corruption been removed from government (we can safely say this about most of the world) so how are “things” going to improve?

    If most people are holding on to their money as much as possible (out of fear, hoarding at the top, and no safe place to put it for investors) where’s the “juice” to make the world go ’round?

  3. call me ahab says:

    I’m not too sure about China or the official information that comes out about China or the companies that reverse IPO themselves into existence,

    All seems a bit shaky

  4. theexpertisin says:

    This century belongs to dominant cultures within countries who become well educated, not dependent upon others for largesse (personal and familial responsibility reign supreme), are forward thinking and willling to work for a reasonable wage. I strive to invest in these places.

    That leaves the U.S. and Old Europe out in the cold.

  5. dead hobo says:

    BR relayed:

    Barron’s: Buy Emerging Markets

    OK, but first, if you don’t mind, I would like to wait until the market trend is UP, as opposed to DOWN, such as it has been lately.

    I have yet to understand why so many market professionals and pundits chide me to buy stocks when they are falling in a down market. Why not wait until the market has stopped falling and buy near the bottom? Would these professionals have demanded I buy into NASDAQ stocks circa 2000 when the market was down 20%? How good of a deal would that have been? Yes, I know, some smartass will doubtlessly point out that if I bought XYZ even then, I’d be set for life today, hoping I fail to notice the fortunes still lost from those days by people who felt lucky catching falling knives.

    Call me back when Europe has figured out how to fix itself. I think their banks bring bad juju at this time.

  6. dead hobo says:

    I asked:

    I have yet to understand why so many market professionals and pundits chide me to buy stocks when they are falling in a down market.

    They need someone to sell their crap to.

  7. dougc says:

    I don’t think it is time to fall in love with stocks anywhere but depending on what happens at Jackson Hole and Europe next weekend a rebound , temporary, is possible.

  8. number2son says:

    The time is long overdue to find better places to invest one’s money other than the stock market. It’s a rigged game and no one in a position to influence this is interested in fixing it.

  9. carleric says:

    Personally I have been mostly on the sidelines (san gold, silver and corporate bonds) since April and doing a lot of fishing. There will probably some idiocy to come out of Jackson Hole as Bennie is under tremendous presure from Wall Street to help them cover up their inherent stupidity and greed. I wonder when saving the stock market bcame one of the Fed’s mandates? Where have the days gone when you paid for your mistakes instead of getting handouts from American taxpayers? Oh well, the bait shop is open. Good luck

  10. machinehead says:

    A rather startling fact about Taiwan’s TAIEX index is that it reached a record high of 12,495 in 1990 … and remains below it 21 years later.


    Like Japan, the Taiwan market was very bubbly during 1988-1990. But it’s still hard to rationalize why stocks in a high-growth economy would remain flat for 21 years.

  11. wngoju says:

    Barrons: Buy Emerging Markets!

    Barrons: Buy US Markets; Sell Emerging Markets (same issue http://goo.gl/LYD9O)

  12. jabbo says:

    read my lips… VALUE TRAP! Growth today but hitting on the breaks soon enough as capital flows head back to safer harbours