Value Microcaps Motherboard

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Basic Points PART 2

6. Long bonds—particularly zeros—have been so strong that we have
trouble recommending them for new-money investing, except as hedges
against positions in commodity stocks. Existing positions should be
maintained.

7. The agricultural stocks have been strong, but the fundamentals have been growing even stronger. We strongly recommend a significant overweight in the group.

8. The two most important Emerging Markets stock markets are China and India. They are both showing symptoms of over-enthusiasm at the moment, but investors can start building long-term positions. These are palpably different from most other EMs, because they are the youthful

versions of what will be two of the world’s three biggest economies by
2020. At some point, nearly all long-term investors will need to be in
these markets in a big way. A rupee or renminbi-averaging process over
the next five years should be very rewarding.