Mark Mobius is one of the most famous Emerging Markets investors and right now he is bullish on Emerging Markets despite a huge rally in shares from late last year. Mobius turned bullish right as shares troughed and has remained so ever since.
Mobius likes the so-called ‘Frontier’ Markets more than the well established BRICs. He mentions Kazakhstan, Romania, Kenya and Vietnam as examples. Below is a video of Mobius from the Telegraph, explaining that investors need to take a five-year view and be prepared for lower liquidity and extreme volatility (20 or 30% corrections) to profit.
Note that his reasons to be bullish are:
- Money printing globally will underpin shares (a view Marc Faber also holds)
- “Derivatives are not dead. There are $600 trillion worth of derivatives out there,” according to Mobius. As a result, leverage will goose returns supplied by the money printing.
Both of these are technical factors that do not speak to the underlying fundamentals. It does suggest that government action may be the dominant force in markets for some time to come, a view espoused by Pimco’s Bill Gross.
The video runs just over five minutes.