Search found 16 matches

by Nicolas Perrault
Sun Jan 13, 2019 5:13 am
Forum: Investing - Theory, News & General
Topic: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)
Replies: 128
Views: 9344

Re: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)

Am I claiming I know something that the market doesn't? Certainly not, but in terms of emerging markets --- in a way that would parallel cryptocurrency --- I wonder whether the market knows enough to estimate the worth of emerging market stocks to the closest order of magnitude. Since the market do...
by Nicolas Perrault
Sun Jan 13, 2019 5:08 am
Forum: Investing - Theory, News & General
Topic: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)
Replies: 128
Views: 9344

Re: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)

If you suspect the financial statement numbers, you can also look at dividend yields(cold hard cash) as a gauge of value or cheapness. Here are some large EM countries... Russia - 6.3% China - 4.7% Taiwan - 4.7% South Africa - 4.4% Turkey - 4.2% For comparison the US is at 2.1% This is good if the ...
by Nicolas Perrault
Sun Jan 13, 2019 5:05 am
Forum: Investing - Theory, News & General
Topic: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)
Replies: 128
Views: 9344

Re: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)

I had the chance to visit Fiji about ten years ago. What does Fiji have to do with emerging markets? Fiji isn't an emerging market. I'm confused about the relevance of your anecdote. Fiji has nothing to do with it, it could have been on the moon or in any developed country. I love Fijians, they're ...
by Nicolas Perrault
Sat Jan 12, 2019 8:52 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)
Replies: 128
Views: 9344

Re: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)

Yes, you literally are. Your contention depends on the unproven assumption "emerging markets cannot be fairly valued," whereas the market thinks that they can be. You're welcome to operate under that assumption, or course, but you may want to avoid introducing cognitive dissonance. Actually, I'm no...
by Nicolas Perrault
Sat Jan 12, 2019 6:22 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)
Replies: 128
Views: 9344

Re: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)

The concerns you're raising are in the category of "known unknowns". Everybody trying to price EM takes them into consideration. Some may mostly dismiss them, some may discount the price a great deal because of it. Known unknowns always create a risk both on the upside and on the downside. So your ...
by Nicolas Perrault
Sat Jan 12, 2019 5:49 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)
Replies: 128
Views: 9344

Re: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)

ignition wrote:
Sat Jan 12, 2019 5:33 pm
Aren't most of the firms in emerging markets audited by the Big Four? The same Big Four that audits firms in developed markets?
What's the Big Four?
by Nicolas Perrault
Sat Jan 12, 2019 5:45 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)
Replies: 128
Views: 9344

Re: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)

...Re Point 1) Do you believe that, perhaps, under these assumptions you would have bought South Sea stock in 1720? You would not have if you had demanded fair value. The fair value of the company was, after all, easy to evaluate, because all of its actual earnings came from the British government ...
by Nicolas Perrault
Sat Jan 12, 2019 5:30 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)
Replies: 128
Views: 9344

Re: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)

Actually, I'm not assuming I know anything more than the market. [...] In a world where the market knows nothing at all about the earnings of companies , the market is going to make a more or less uninformed bet. Here, I bolded the faulty assumption for you. Hi and thanks for your reply. In my book...
by Nicolas Perrault
Sat Jan 12, 2019 5:27 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)
Replies: 128
Views: 9344

Re: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)

Am I claiming I know something that the market doesn't? Certainly not Yes, you literally are. Your contention depends on the unproven assumption "emerging markets cannot be fairly valued," whereas the market thinks that they can be. You're welcome to operate under that assumption, or course, but yo...
by Nicolas Perrault
Sat Jan 12, 2019 5:14 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)
Replies: 128
Views: 9344

Re: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)

Actually, I'm not assuming I know anything more than the market. [...] In a world where the market knows nothing at all about the earnings of companies , the market is going to make a more or less uninformed bet. Here, I bolded the faulty assumption for you. Hi and thanks for your reply. In my book...
by Nicolas Perrault
Sat Jan 12, 2019 5:01 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)
Replies: 128
Views: 9344

Re: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)

If you don't like EM, do not invest in EM. If there is a big boom in EM, you will miss out. That's the risk you take. Fair enough. But I guess one could say the same of cryptocurrency, gold, and Rembrandt paintings. An investment is not automatically a good one just because there's a chance of a hu...
by Nicolas Perrault
Sat Jan 12, 2019 4:40 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)
Replies: 128
Views: 9344

Re: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)

Am I claiming I know something that the market doesn't? Certainly not Yes, you literally are. Your contention depends on the unproven assumption "emerging markets cannot be fairly valued," whereas the market thinks that they can be. You're welcome to operate under that assumption, or course, but yo...
by Nicolas Perrault
Sat Jan 12, 2019 2:46 pm
Forum: Investing - Theory, News & General
Topic: Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)
Replies: 128
Views: 9344

Emerging markets cannot be fairly valued and investors are better off elsewhere: Change my mind :)

Most investment books suggest an allocation to Emerging Markets, usually between 5 and 10%. The reasoning usually goes that they offer useful diversification. My main issue with emerging markets is that I suspect the market evaluates their value with two-inch thick rosy glasses in a fog so thick one...
by Nicolas Perrault
Fri Jan 04, 2019 10:49 pm
Forum: Investing - Theory, News & General
Topic: Whats better VPL + VGK vs just VEA?
Replies: 13
Views: 4454

Re: Whats better VPL + VGK vs just VEA?

If you were alive during the 1980s, you wouldn’t necessarily have realized that Japan was in a bubble. It’s obvious in hindsight, but at the time the narrative of Japanese cars and electronics taking over the world was everywhere. I guess you just mean rebalance to 10% rather than market time thoug...
by Nicolas Perrault
Fri Jan 04, 2019 8:05 pm
Forum: Investing - Theory, News & General
Topic: Whats better VPL + VGK vs just VEA?
Replies: 13
Views: 4454

Re: Whats better VPL + VGK vs just VEA?

I like having VGK and VPL separately (10% and 10% of my equity respectively) even if I don't usually rebalance. I do this because if Pacific (or European) stocks go barking mad and baloon to become 60% of my portfolio (as they would have done in the 1980s if I had been alive to hold them), I want to...
by Nicolas Perrault
Thu Sep 27, 2018 1:45 pm
Forum: Personal Investments
Topic: Why does rebalancing a 50/50 SP500/EAFE mix appear to increase return relative to an unrebalanced 50/50 mix?
Replies: 6
Views: 774

Why does rebalancing a 50/50 SP500/EAFE mix appear to increase return relative to an unrebalanced 50/50 mix?

Hi first post here :) I'm 25, new to investing, and strongly believe in low-fee indexing. I've read William Bernstein's Intelligent Asset Allocator (2001) and am now reading his Four Pillars of Investing (2002). In the latter, p. 119, Bernstein writes: "Had you rebalanced a 50/50 S&P 500/EAFE [respe...