Mark Mobius - >>> Where to Invest $1 Million Right Now
Five experts reveal promising investment options for substantial sums.
By Frederik Balfour, Suzanne Woolley, Edward Robinson and Simone Foxman
November 27, 2018 | Updated on March 3, 2019
Founder of Mobius Capital Partners https://www.bloomberg.com/features/how-to-invest-a-million-dollars/?srnd=premium
When I first started investing in emerging markets in 1987, they accounted for just 5 percent of global market cap, and today it’s about 40 percent. Our funds could only invest in six markets, and today it’s about 70. That makes diversification so much easier. Now is the time to buy in emerging markets, where we are seeing a terrific recovery.
Brazil is up 40 percent from its bottom, but there is still upside as every sector is going to benefit from a reform-minded government. There is a sea change in the whole political environment in the wake of scandals still being prosecuted. Take Petrobras, one of the world’s largest oil and gas companies, which is changing its whole system top-to-bottom to ensure corruption won’t happen. All companies are aware of corporate governance and making sure they are on the up-and-up. This is very positive for foreign investors. With more law and order, the consumer sector will do particularly well.
If you like technical analysis, many of the markets had a double bottom. There are still low price-to-earnings and price-to-book ratios. PE valuations in Russia are only five times; that’s below even Pakistan. The Russian market looks very, very cheap.
Based on fundamentals, we like the consumer-oriented companies in India, whose economy is looking to 8 or 9 percent growth. Software is big in India, and we like medium-sized companies in traditional industries adopting internet solutions. India’s byzantine distribution system is changing dramatically because of technology, tax reforms and the elimination of tariffs between states within the country. Despite the challenges facing them, Amazon and Walmart are forcing local companies to raise their game.
There are a lot of bad loans at big banks, and the government will bail them out and recapitalize them. That’s going to weigh on the currency. We are going to see a weakening in the rupee because of the coming election and the necessity for the ruling BJP to give farmers goodies. But this weakening is temporary, and the central bank has been good in terms of stabilizing the currency over time. I would put 30 percent of emerging markets money in India.
We also are looking at winners from the China-U.S. trade war. Vietnam stands to gain as manufacturing is relocating there from southern China. The same is true elsewhere in Southeast Asia. Mexico, which reached a trade deal with the U.S. and Canada last year, is also a beneficiary. Global trade is like a big balloon: Push one place, it goes out in another.
In completely bombed-out countries like Turkey, there will always be opportunities. The losers are the guys in debt. Those not heavily in debt will be winners, get market share and make acquisitions. It is still a manufacturing powerhouse that sells to Europe. The Turkish lira falling 70 percent is excessive. Things will be more stable and maybe have some upside potential.