This article sounds grim, particularly for EM. Things maybe will crater shortly, but... long-term, and forever? What happened to the logic that, given the USA QE, the dollar's value has been diluted, watered-down, reduced and otherwise made feeble? Or am I reading too much into words that are intended to sound urgent, so that the writer can convince readers that he knows what he's talking about?
http://www.cnbc.com/id/100798026
Comments
Well now, there's a nuanced view of things! I'm no optimist, but even I'm not that negative. Let's wait until September or October, when hopefully we'll know who's running the Fed and what they intend to do, then maybe ease back in as the opportunity arises.
https://www.google.com/finance?q=OTCMKTS:APAJF&ei=l9C5UejdDcrzqwGa2AE&ed=us
Unfortunately, APA Group does not have ADR shares (which would not charge a fee - those shares end in Y)
APA Is an interesting company - it has a dominant position in nat gas infrastructure in Australia. I am a little concerned short-to-mid term about Australia, but if one has a long-term view, APA is really a dominant company in important infrastructure in the country. Interesting assets, nice dividend, pretty consistent.
APA is a few % of INF, but that's definitely not saying that INF is a substitute, as INF is leveraged and can be volatile. However, INF (Brookfield Global Infrastructure) is a broad infrastructure fund and pays a dividend monthly vs quarterly.
I have no interest in adding any more infrastructure, but am not selling. I had entertained buying Hutchison Port Holdings briefly, but would rather just buy diversified parent Hutchison Whampoa (HUWHY) if I was going to go that route. The parent company has continued to remain undervalued and I've owned it before; I think it has great assets (everything from a giant health/beauty chain to a Canadian energy company to telecom to ports around the world) but do not currently own it because it is too volatile and I grew admittedly impatient with it.
http://www.reuters.com/article/2013/06/13/us-argentina-economy-insight-idUSBRE95C04T20130613?feedType=RSS&feedName=topNews
All growth periods have their hiccups.
http://www.asianinvestor.net/News/346826,no-need-to-fear-asean-correction-says-invesco.aspx
.....Which is to say that the current President in the Philippines is trying to "clean house" in the face of monumental opposition on all sides. Kinda like Pres. Obama trying to get anything done. Even the poorest of the poor over there support the Fat Cats, against their own best interests. Why? Because of the extensive sense of fatalism. If God did not want me poor, I would not be this way... In the meantime, they feel lucky if the Fat Cats throw them a bone--- though they are literally selling themselves short, cutting themselves off at the knees, rather than to stand up and insist on some honesty and fairness.
.....But none of what's going on is illegal, which is WHY a mere 12 surnames control 85% of the wealth in The Philippines. And the Markets are going to do whatever they are going to do, regardless---illustrating the difference between the way our System operates on the one hand, and what's ethical, on the other.
Max hit the nail on the head. The graft and corruption is so ingrained in the society that it has become normal. The people here are so desperate they will choose the instant gratification over long term change. A political candidate can promise free rice and garner support from the poor. Free rice lasts for a meal or two though. Investing in the infrastructure lasts much longer. There is a shift in the economic structure happening here. The overseas workers are sending money back home and a middle class has started to form. These same overseas workers see what is happening in other countries with regards to infrastructure and they are demanding the same in the Philippines.
My wife is also from here so I can see the changes up front. Even in the past ten years, there has been a solid change. From no Starbucks anywhere to stores where 15-20 people are standing in line to buy their coffee. TGI-Fridays opens a restaurant and it is doing booming business. Ayala builds a 24 story condo and it sells out in less than 6 months When the private families invest their money in these sorts of ventures they are flourishing. Compare that to the government spending. Airports are a sore subject here. Manila's airport is considered the worst in the world. I have been through there numerous times and I don't disagree with that statement one bit. They should let Ayala or another family build a new airport. Roads and highways are pitiful. The reason is that the government is focused more on social spending than they are on infrastructure spending. Slightly off topic but the USA made that shift years ago when LBJ raided Social Security for his Guns and Butter campaign. But that is a topic for another thread.
I would want those 12 families to continue to invest in the Philippines rather than heading elsewhere with their money.
Good discussion.
Kevin
Uwe Parpart is a heavyweight in international finance and formerly of Kantor Fitzgerald, which sued him when he and three colleagues left for ReOrient. (He won). He's also author of "Death of the Asian Growth Model with the 2008 Financial Crisis" (2008), source of the prediction that "at this rate, the euro will lurch toward parity with the US dollar and through it before year-end, then disintegrate" (2010) and that Shanghai stocks would be sold directly to foreign investors by October or November, 2011 (2011).
He's currently a managing director of ReOrient Financial Markets, formerly Asia TeleMedia, Ltd. ReOrient sells investment advice and trading services to the very rich. That includes private placements, which is seen as an alternative to investing in public securities (which are, we're told, "very problematic"). 80% of ReOrient is owned by Gainhigh Holdings Limited, an investment holding company domiciled in the British Virgin Islands. All of Gainhigh Holdings is owned by Ko Chun Shun (called Johnson Ko). Mr. Ko is a serial entrepreneur who runs China Windpower Group, an investment holding company.
Bright guy with a smudgy crystal ball, talking his book?
David
His current stance is that a stock needs to have 40-50% upside to get into his portfolio today and "some of the better quality e.m. firms are within 10-15% of getting in." He seemed impressed, in particular, with the quality of management teams in Latin America ("those guys are really experienced with handling adversity") but skeptical of the Chinese newbies ("they're still a little dodgy").
He also announced a bias "against reserve currencies." That is, he thinks you're better off buying earnings which are not denominated in dollars, Euros or yen. His co-presenter, Matt Eagan of Loomis Sayles, has the same bias. He's been short the yen but long the Nikkei.
Which is to say, folks with long track records and long investment horizons seem a bit less skittish than does CNBC. Go figure.
David