I'm not sure if the bear case for India or Malaysia is a case of an underlying business problem, or merely high starting valuations. In the mid 1990s the whole ASEAN region received a lot of capital inflows from Japan post its bubble peak, driving valuations to obscene levels. The de-rating since has of course been quite unfortunate for equityholders. A similar argument can be made for Adani, great business (as long as India's politics remain what they are!) but wrong price.
Where the problem (for a long-only investor) is when the underlying businesses have low ROE, poor revenue growth - even stocks are cheap they can go nowhere for a long time - as Japan can show us!
Thanks for the great content Russel! I've been hoovering up a lot of your past articles and feel things clicking into place for me. For myself and the folks that are still a bit green behind their ears, I would love to hear you talk more about differences between Emerging and Developed markets.
I've picked up some seemingly clever notes from Twitter on how US (among others) might turn into a EM due to all the policy shifts, but have no relevant experience to understand what it implies for investors. Any comments along those lines?
I'm not sure if the bear case for India or Malaysia is a case of an underlying business problem, or merely high starting valuations. In the mid 1990s the whole ASEAN region received a lot of capital inflows from Japan post its bubble peak, driving valuations to obscene levels. The de-rating since has of course been quite unfortunate for equityholders. A similar argument can be made for Adani, great business (as long as India's politics remain what they are!) but wrong price.
Where the problem (for a long-only investor) is when the underlying businesses have low ROE, poor revenue growth - even stocks are cheap they can go nowhere for a long time - as Japan can show us!
Thanks for the great content Russel! I've been hoovering up a lot of your past articles and feel things clicking into place for me. For myself and the folks that are still a bit green behind their ears, I would love to hear you talk more about differences between Emerging and Developed markets.
I've picked up some seemingly clever notes from Twitter on how US (among others) might turn into a EM due to all the policy shifts, but have no relevant experience to understand what it implies for investors. Any comments along those lines?
Is anyone else not getting the audio to play? Thanks