Justification for holding Emerging Markets?

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Valuethinker
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Re: Justification for holding Emerging Markets?

Post by Valuethinker » Fri May 19, 2017 7:01 am

ajjulee wrote:
nisiprius wrote:
NiceUnparticularMan wrote:...People who cite the long-term performance of U.S. stocks dating back to the 19th Century and then question why anyone would invest in emerging markets today seem to have rather self-contradictory views, since the U.S. is really the ultimate EM success story...
Since the term "emerging markets" was not coined until the 1980s, and the first emerging markets index, the MSCI Emerging Markets Index, was not created until 1998, saying that the United States was an "emerging market" in the 1800s is an exercise in spin. It's a very iffy business trying to backdate definitions and apply them to times before the concept existed. (It's no worse than talking about "the S&P 500 back to 1870" but I hate that, too.)


Just because we didn't define it doesn't mean the 'idea' didn't exist. To say it's 'iffy business trying to backdate definitions and apply to them to times before the concept existed' is meaningless. Our history is replete with backdating many ideas/concepts after we figured them out. However, in this case, questioning the validity of the concept is understandable - whether EM add value or not to US investors.


Underlying that, though, there's an issue:

- the definition of "Emerging Markets" has changed over time, and so it's hard to make like-for-like comparisons

- the size of EM is so vastly different than what it was in the 80s, let alone say the 1960s - you could not have made the same meaningful investments in EM say 30 years ago, or 50

Some of today's "Frontier Markets" will become EM. Argentina or Brazil show you that the progress out of EM into Developed Markets is anything but linear, and indeed may never happen.

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Re: Justification for holding Emerging Markets?

Post by Valuethinker » Fri May 19, 2017 7:08 am

NiceUnparticularMan wrote:
The term "emerging markets" might be relatively new. But the concept fits these facts. And indeed, investors in Western Europe back in the day faced a similar sort of decision--just stick to investing in the solid older established countries of Western Europe, or invest in the new "emerging" countries like the United States. And those with the foresight to invest in the United States eventually profited, albeit with fits and starts (see, e.g., that dip during the Great Depression).


Historically Germany and the US were "emerging markets" at about the same time (post 1871, say; similar levels of underdevelopment say around 1850).

Germany was only created in 1871 and its Industrial Revolution (the Second Industrial Revolution) came after that.

Scandinavia even later.

To an extent, you can track when a country was just about ready for its industrial takeoff by when its citizens flooded into the USA (up until 1921 and Congress changing the law, at least). The English, Scots and Irish in the first half of the 19th century, the Germans mid century, then the Scandinavians (a bit later, from memory), then the Poles (the Pogroms of 1905 etc. had a significant impact) ie from the Russian Empire. Italy also began industrializing in the late 19th century, although the full force was not felt until after WW2.

Special factors of course: the Irish potato blight, the Pogroms in western Russia (what is now Poland, Belarus, Ukraine, Lithuania) brought over 1m Russian Jews, etc. I think there was also famine in Scandinavia at one point.

Valuethinker
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Re: Justification for holding Emerging Markets?

Post by Valuethinker » Fri May 19, 2017 7:10 am

TheTimeLord wrote:
harvestbook wrote:John Bogle, as much as I admire him and credit him for helping my philosophical path, suffers a wide range of biases. The reality is that the United States might not "win" this century, or, more importantly, the chunk of it in which you're alive and investing. I can't invest in 1960. I have to invest in the world as it is and might become.

http://awealthofcommonsense.com/2017/05 ... ck-market/


I think he might say while you may be right about the U.S. it is most definitely is likely to finish well ahead of the other countries that currently dominate developed market indexes and trying to pick the winner from amount the others is just too hard.


If you look at that list of countries none of them is so much as 10% of world market indices. From memory Japan is about 7%. UK, Germany, Canada... less than that.

They don't "dominate" the world developed indices. Only the US market does that.

Note that until the end of the 1990s we all probably thought that eventually other countries would have market capitalization to GDP ratios very similar to the USA. That's much less clear than it was.

Valuethinker
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Re: Justification for holding Emerging Markets?

Post by Valuethinker » Fri May 19, 2017 7:18 am

nisiprius wrote:
NiceUnparticularMan wrote:...People who cite the long-term performance of U.S. stocks dating back to the 19th Century and then question why anyone would invest in emerging markets today seem to have rather self-contradictory views, since the U.S. is really the ultimate EM success story...
Since the term "emerging markets" was not coined until the 1980s, and the first emerging markets index, the MSCI Emerging Markets Index, was not created until 1998, saying that the United States was an "emerging market" in the 1800s is an exercise in spin. It's a very iffy business trying to backdate definitions and apply them to times before the concept existed. (It's no worse than talking about "the S&P 500 back to 1870" but I hate that, too.)


In support of that and my reiteration of a comment above:

- the market capitalization of EM before the early 1990s was just tiny. Where Frontier Markets are now

- what constitutes an EM changes over time, countries dip in and out

So we really are doing a bit of data mining if we construct backwards looking EM. It's a bit like the REIT market in the 1970s-- it was so small, it's hard to make emphatic assertions about it.

The US as an Emerging Market in the 1800s is a good analogy to clarifying some of the issues around EM. The US had endless stock market panics and crashes, and at least one Depression as bad as the 1930s or the 2008 one (after 1872 and the failure of Grant Cutler, the stockbroking firm part owned by President Grant; although we don't have the macroeconomic statistics to back up that assertion, I think most historians would agree with it).

And it also had a civil war which was one of the bloodiest (in terms of percentage of population killed or maimed) of the 19th century, (the Taiping Rebellion in China takes the cake-- 40m dead, perhaps, so 5-10% of the whole population), which devastated large parts of the country and would have had enormous consequences had the Union lost.

Where the analogy falls down is where it is used to imply that the leading economies of the 21st century are today's EM. To some extent that is trivially true-- barring disaster China and India will be the 2 biggest economies in the world by mid century, excepting the USA. But in another way it is misleading, because it doesn't follow automatically that they will have the largest or best performing stock markets.

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Re: Justification for holding Emerging Markets?

Post by Valuethinker » Fri May 19, 2017 7:30 am

NiceUnparticularMan wrote:
You can read more about all this here:

http://www.wikiwand.com/en/Economic_his ... ed_Kingdom

It is actually pretty interesting how many parallels you can draw between the UK of that time and the US of today. Generally, and not to single you out, but it is a common problem that I think a lot of modern people today don't realize how complex and international finance was long before the current era. There were multinational companies, intercontinental trade, export of capital and other foreign private investment of all sorts, and of course colonial control (that last is something I might note which is missing today, although some would say we are not always so far off).


http://www.wikiwand.com/en/Economic_his ... Revolution

what struck me there is how much the world looks like that description now. You have:

- an all dominating, maritime power, corporate and financial giant, (Great Britain then, USA now) but with Continental rivals rising (China, India in time, maybe the EU; then - USA & Germany and to some extent France)

- increased role of financial capitalism over control by industrial entrepreneurs (arguably, in the tech business, you have a reversion to that older form: Gates, Zuckerberg, Brin & Page, Ellison, Bloomberg etc.)

- huge technological transformations going on (think 3D Printing now, the still to be seen possibilities of the internet, new energy technologies, Artificial Intelligence & robotics etc.) even though the general economic background is one of slow growth and financial instability

- demographic transformation (the birth rates of the developing countries, then, finally started to fall - i.e. US Britain Germany France - although the impact on population growth wouldn't be seen for another generation; I'd have to check the stats on that). The beginning of the transition which has now affected most of the globe, post 1945, with the exceptions of sub Saharan Africa and parts of the Middle East.

I agree re globalization then being of a scope in some ways unrivalled today. The British Empire wasn't actually a total free trade zone, but it was pretty much free for the movement of capital and fairly free for the movement of goods and services. The telegraph, the steam train and the steamship in some ways were more revolutionary to transport and communications then than the internet and the airline flight are now.

And virtually all international transactions eventually cleared through merchant banks in London-- the discount bills business. That's how international trade was denominated (in Pounds Sterling) and financed (with bills of discount, cleared in London).

The number I remember particularly is that traffic speeds in Central London now are just about what they were in 1910 ;-). Something like 11 mph. Progress. Isn't. -- as we might write ;-).

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TheTimeLord
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Re: Justification for holding Emerging Markets?

Post by TheTimeLord » Fri May 19, 2017 7:40 am

Valuethinker wrote:
TheTimeLord wrote:
harvestbook wrote:John Bogle, as much as I admire him and credit him for helping my philosophical path, suffers a wide range of biases. The reality is that the United States might not "win" this century, or, more importantly, the chunk of it in which you're alive and investing. I can't invest in 1960. I have to invest in the world as it is and might become.

http://awealthofcommonsense.com/2017/05 ... ck-market/


I think he might say while you may be right about the U.S. it is most definitely is likely to finish well ahead of the other countries that currently dominate developed market indexes and trying to pick the winner from amount the others is just too hard.


If you look at that list of countries none of them is so much as 10% of world market indices. From memory Japan is about 7%. UK, Germany, Canada... less than that.

They don't "dominate" the world developed indices. Only the US market does that.

Note that until the end of the 1990s we all probably thought that eventually other countries would have market capitalization to GDP ratios very similar to the USA. That's much less clear than it was.



TheTimeLord wrote:http://www.morningstar.com/cover/videoc ... ?id=718644

Christine Benz: How about foreign equities? Given starting valuations, especially in emerging markets, do you see that they might have some return premium versus U.S. equities?

Jack Bogle: Well, that's what the marketplace is telling us. Foreign equities and, particularly, emerging markets are deemed to be cheap. They're selling at lower P/Es--that's clear. The dividend yield isn't a lot higher, but it's probably a little bit higher. But I just think the outlook is so uncertain, given this upheaval in the world economy. If they are importers, they've got a problem; if they are exporters, they've got a problem. Look at poor Australian with China not buying all those natural resources from them anymore--or buying them in tiny amounts.

So, I don't do international. And emerging markets is a little separate part of so-called "international." We're wonderful in America--we call non-U.S. funds international. Where's the U.S.? (Laughs.) They are really non-U.S. funds--non-U.S. portfolios. I probably talked about this a year ago. I say, "What are you buying?" There is such a thing as oversimplifying--this coming, of course, from the great simplifier. People say, "Buy the EAFE Index or the FTSE International Index." So, [I tell people to drill down into that index]. What are you buying? Look behind the curtain. Your largest investment is Britain. Your second-largest investment is Japan. Your third-largest investment is France.

What, Christine, I ask you, is the possibility that those three nations are going to outpace the U.S. in terms of investment return in the next 10 years? I just don't think it's possible. And those countries may be the better ones. Each one has its own set of troubles. We've got plenty of troubles over here in the U.S. But at least we know that we have the most innovative economy, the most productive economy, the most technologically advanced economy, the most diverse economy in the world. And we also have shareholder protections that can be taken for granted. Outside of the U.S., you can be very disappointed. I think it was in Malaysia a few years ago--you couldn't get your money out. Korea is a bit fragile in that regard. Heaven knows what China would do under those circumstances. But if you don't have the basic institutional structure for the markets and the basic protection of shareholder rights that we've had institutionalized over 250 years here, you want to be very careful before you depart that.
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TheTimeLord
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Re: Justification for holding Emerging Markets?

Post by TheTimeLord » Fri May 19, 2017 7:50 am

telemark wrote:Without addressing the original question, I just want to add that I admire your timing. Most people question an asset class after a period of underperformance, but VWO shows a one-year return of 24.89%. So, points for originality. If you decide to get out, no one can accuse you of selling low.


You made me curious so I check I bought my current VEMAX for the IRA in late November 2016, so I am up a little north of 12%. Also been regularly purchasing for the wife's 401K for about 18 months so I guess a good time to get in.
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Valuethinker
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Re: Justification for holding Emerging Markets?

Post by Valuethinker » Fri May 19, 2017 9:52 am

TheTimeLord wrote:

TheTimeLord wrote:http://www.morningstar.com/cover/videoc ... ?id=718644

Christine Benz: How about foreign equities? Given starting valuations, especially in emerging markets, do you see that they might have some return premium versus U.S. equities?

Jack Bogle: Well, that's what the marketplace is telling us. Foreign equities and, particularly, emerging markets are deemed to be cheap. They're selling at lower P/Es--that's clear. The dividend yield isn't a lot higher, but it's probably a little bit higher. But I just think the outlook is so uncertain, given this upheaval in the world economy. If they are importers, they've got a problem; if they are exporters, they've got a problem. Look at poor Australian with China not buying all those natural resources from them anymore--or buying them in tiny amounts.

So, I don't do international. And emerging markets is a little separate part of so-called "international." We're wonderful in America--we call non-U.S. funds international. Where's the U.S.? (Laughs.) They are really non-U.S. funds--non-U.S. portfolios. I probably talked about this a year ago. I say, "What are you buying?" There is such a thing as oversimplifying--this coming, of course, from the great simplifier. People say, "Buy the EAFE Index or the FTSE International Index." So, [I tell people to drill down into that index]. What are you buying? Look behind the curtain. Your largest investment is Britain. Your second-largest investment is Japan. Your third-largest investment is France.

What, Christine, I ask you, is the possibility that those three nations are going to outpace the U.S. in terms of investment return in the next 10 years? I just don't think it's possible. And those countries may be the better ones. Each one has its own set of troubles. We've got plenty of troubles over here in the U.S. But at least we know that we have the most innovative economy, the most productive economy, the most technologically advanced economy, the most diverse economy in the world. And we also have shareholder protections that can be taken for granted. Outside of the U.S., you can be very disappointed. I think it was in Malaysia a few years ago--you couldn't get your money out. Korea is a bit fragile in that regard. Heaven knows what China would do under those circumstances. But if you don't have the basic institutional structure for the markets and the basic protection of shareholder rights that we've had institutionalized over 250 years here, you want to be very careful before you depart that.


He segues from discussing other developed markets to developing markets (Malaysia, etc.). That's his first issue. Deliberately or not, he bait-and-switches.

Also he goes against Efficient Markets Theory. The market *knows* what we all know about rival economic growth prospects. Why would knowing this allow us to choose the US as the market which will outperform? EMT says that it has already priced that into the market levels.

In other words, in EMT terms, he is data mining. Taking a past successful strategy and mapping it into the future.

Or he does not believe in Efficient Markets?

The other thing is superior economic performance does not drive stock market performance. He knows this, he must know it, but he ignores it.

The "US is best" triumphalism is kind of, amusing, especially to those of us who follow the US -- but don't live there ;-). What I think has happened is that his undoubted love of the US (hence funding a "Museum of the Constitution") has confused him as to his investing views.

That's a mistake. A classic of behavioural economics and psychology, in fact.

I think he knows his audience. There's a big appetite out there for being told that America is the best-- call it nationalism -- in any field. In a slightly different way, you'd find it in any country (the British version of this is a delusion about history and Empire, and the affection which we are held in other places for it; we also have delusions of grandeur and about our "special relationship" with the US (and former colonies)-- in short, we think we matter, when in fact we don't). The English also go through a period delusion about their chances in the World Cup ;-). Bogle is playing to his audience.

But the advantage the rest of us have is we cannot afford Home Country Bias. Not even in the UK where something like 60% of earnings of FTSE100 companies come from outside the UK. We *have* to pay attention to a globalized world and a global investment universe.

As a columnist in the Financial Times (Dutch, living in Paris) wrote about Britain: we Dutch know we are too small to matter, the British haven't figured that out yet ;-).

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TheTimeLord
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Re: Justification for holding Emerging Markets?

Post by TheTimeLord » Fri May 19, 2017 10:05 am

Valuethinker wrote:
TheTimeLord wrote:

TheTimeLord wrote:http://www.morningstar.com/cover/videoc ... ?id=718644

Christine Benz: How about foreign equities? Given starting valuations, especially in emerging markets, do you see that they might have some return premium versus U.S. equities?

Jack Bogle: Well, that's what the marketplace is telling us. Foreign equities and, particularly, emerging markets are deemed to be cheap. They're selling at lower P/Es--that's clear. The dividend yield isn't a lot higher, but it's probably a little bit higher. But I just think the outlook is so uncertain, given this upheaval in the world economy. If they are importers, they've got a problem; if they are exporters, they've got a problem. Look at poor Australian with China not buying all those natural resources from them anymore--or buying them in tiny amounts.

So, I don't do international. And emerging markets is a little separate part of so-called "international." We're wonderful in America--we call non-U.S. funds international. Where's the U.S.? (Laughs.) They are really non-U.S. funds--non-U.S. portfolios. I probably talked about this a year ago. I say, "What are you buying?" There is such a thing as oversimplifying--this coming, of course, from the great simplifier. People say, "Buy the EAFE Index or the FTSE International Index." So, [I tell people to drill down into that index]. What are you buying? Look behind the curtain. Your largest investment is Britain. Your second-largest investment is Japan. Your third-largest investment is France.

What, Christine, I ask you, is the possibility that those three nations are going to outpace the U.S. in terms of investment return in the next 10 years? I just don't think it's possible. And those countries may be the better ones. Each one has its own set of troubles. We've got plenty of troubles over here in the U.S. But at least we know that we have the most innovative economy, the most productive economy, the most technologically advanced economy, the most diverse economy in the world. And we also have shareholder protections that can be taken for granted. Outside of the U.S., you can be very disappointed. I think it was in Malaysia a few years ago--you couldn't get your money out. Korea is a bit fragile in that regard. Heaven knows what China would do under those circumstances. But if you don't have the basic institutional structure for the markets and the basic protection of shareholder rights that we've had institutionalized over 250 years here, you want to be very careful before you depart that.


He segues from discussing other developed markets to developing markets (Malaysia, etc.). That's his first issue. Deliberately or not, he bait-and-switches.



No he is just talking about U.S. funds vs. non-U.S. funds. His point is about societal institutions.
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Re: Justification for holding Emerging Markets?

Post by NiceUnparticularMan » Fri May 19, 2017 11:12 am

Valuethinker wrote:Underlying that, though, there's an issue:

- the definition of "Emerging Markets" has changed over time, and so it's hard to make like-for-like comparisons

- the size of EM is so vastly different than what it was in the 80s, let alone say the 1960s - you could not have made the same meaningful investments in EM say 30 years ago, or 50

Some of today's "Frontier Markets" will become EM. Argentina or Brazil show you that the progress out of EM into Developed Markets is anything but linear, and indeed may never happen.


To be clear, I don't think we can literally create an EM series that goes back from the present to the 19th Century and includes the United States, then use it to backtest portfolios and such (although see that British MPT paper). But I do think we can learn from this history in a less formal sense.

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Re: Justification for holding Emerging Markets?

Post by NiceUnparticularMan » Fri May 19, 2017 11:22 am

Valuethinker wrote:To some extent that is trivially true-- barring disaster China and India will be the 2 biggest economies in the world by mid century, excepting the USA. But in another way it is misleading, because it doesn't follow automatically that they will have the largest or best performing stock markets.


Sure, you can't say anything with certainty about any given country, because we don't really know which countries will be the next big winners for investors (or losers). But if you completely ignore EM, there is a good chance you will miss some of the next biggest winners, and there is a good chance you will also hold some losers anyway--including possibly the United States. Hence it makes sense to me to diversify, because at a minimum this is a plausible possibility.

I will then go a little further and say that generally speaking I suspect EM will have higher long term returns than developed (including the U.S.). I am not sure they will have higher volatility-adjusted returns, but that doesn't bother me so much as to discourage me from slightly overweighting EM, particularly since EM might be a better diversifier for U.S.-heavy investors.

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Re: Justification for holding Emerging Markets?

Post by NiceUnparticularMan » Fri May 19, 2017 11:28 am

Claiming it is literally impossible for non-US developed markets to outperform US markets over any given medium-length period strikes me as outlandishly overstated.

And as always, if you are concerned about overlap between U.S. stocks and large company stocks in other developed countries, rather than doubling down on yet more U.S. stocks, you should be thinking how to reduce, not increase, that overlap.

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Re: Justification for holding Emerging Markets?

Post by HomerJ » Fri May 19, 2017 12:58 pm

NiceUnparticularMan wrote:Claiming it is literally impossible for non-US developed markets to outperform US markets over any given medium-length period strikes me as outlandishly overstated.


Who is claiming that?

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Re: Justification for holding Emerging Markets?

Post by NiceUnparticularMan » Fri May 19, 2017 4:53 pm

HomerJ wrote:
NiceUnparticularMan wrote:Claiming it is literally impossible for non-US developed markets to outperform US markets over any given medium-length period strikes me as outlandishly overstated.


Who is claiming that?


This gentleman:

People say, "Buy the EAFE Index or the FTSE International Index." So, [I tell people to drill down into that index]. What are you buying? Look behind the curtain. Your largest investment is Britain. Your second-largest investment is Japan. Your third-largest investment is France.

What, Christine, I ask you, is the possibility that those three nations are going to outpace the U.S. in terms of investment return in the next 10 years? I just don't think it's possible.

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Re: Justification for holding Emerging Markets?

Post by Theoretical » Fri May 19, 2017 5:17 pm

And we also have shareholder protections that can be taken for granted.


This statement is true, BUT, I think the very safe havenness of the US leads to an underrating of the risks of fraud and outright fantasy in the markets - the dot coms, Worldcom/Enron, and biggest of all the outright MBS/CDO fraud. Such risks are endemic to any investment system, and I think there is an argument to be made that the safe haven of the day gets a bit underestimated on those risks while the emerging markets are fairly priced or perhaps a bit overestimated as to their risk. The risks of Pakistan vs Korea or Taiwan are significantly different even though they're all now Emerging. Or even China and China-A

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Re: Justification for holding Emerging Markets?

Post by jalbert » Fri May 19, 2017 5:54 pm

Alot of the hype of EM is driven by the EM/China/commodities boom of 2002-2007. After the currency crises of the 1990's, EM countries stabilized their currencies, and the outsourcing/offshoring craze that accelerated in the recovery of 2002 started a large flood of capital into EM economies. This creates a strong bias in backtesting data.

If you compare an investment made in the EM equity index fund veiex eith the same investment made in the SP500 fund vfinx, 1999 and 2000 were the most favorable years for EM. If you then backtest starting in 2000 to present hypothetically investing $1000 each month in both veiex and vfinx up to the present to smooth out the biases, but still starting at the most favorable time for EM, you will find that EM loses handily.

Thus, it is difficult to make the case that risk of EM equities has been rewarded over the modern history of the asset class. EM equities became available to retail investors around the time of the starting of veiex in May 1994. If you use start dates for the above backtest earlier than 1999 or later than 2002, the result is uglier for EM.

The justification for owning EM has to be made by convincing yourself that EM economies will evolve beyond commodities producers and outsourcing servicers to become major parts of the global economic engine and that you want some exposure to EM so you don't get left behind if and when that happens.
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Re: Justification for holding Emerging Markets?

Post by unclescrooge » Fri May 19, 2017 5:56 pm

Valuethinker wrote:
unclescrooge wrote:

Over the past 7 years (that's how long I have held it), Emerging Markets have done diddly-squat. Even with the big run up recently.


Very true.

I just read that US markets are up 75% over the previous 2007 peak, Developed Markets are flat, and EM is still 20% below the previous peak.


That cannot be true? US is not up 75% since 2007? Did you mean 45%?

http://www.cnbc.com/id/100522542 14,200 high on the DJIA in October 2007

DJIA is 20,000 now




Maybe it was 45%. I was quoting from memory.

Anyway, plugging SPY, VEA and VWO into Morningstar and looking at performance since 10/31/2007 to date we get +54%, -20% and -30%.

So I don't know what benchmarks the article was referring to!

Valuethinker wrote:
unclescrooge wrote:I just overbalanced into EM by selling some US stock. EM is now 20% of portfolio, with an extremely overweight to China (roughly 8% of portfolio).
I think that is beginning to push the envelope in terms of risk/ return tradeoffs? Adding volatility without necessarily adding return?

A major concern I have is the Chinese stock market valuation, which I don't think is much about fundamentals, but more about Chinese exchange controls and how the Chinese government manages the monetary and banking system.

With other EM I have much less concern. The Russian market PE reflects the realities of doing business in Russia, for example. The low PE in Korea reflects the industrial nature of the companies and the Chaebol conglomerate discount (families that don't necessarily manage companies for the benefit of external shareholders); similar factors in Taiwan. Same with Japan in fact (not an EM).

China? I am not sure ordinary earnings valuation metrics are what drives stock prices, even in the long run. And the banking system "profits" seem to me to be made up (without having done a lot of work on it).

I should note that I recently bought an EM ETF so heavily weighted to China. So performance chasing ;-).


Yes, everyone is extremely bearish on China.

That's the main appeal :mrgreen:

Also, the Chinese internet companies (Chinese FAANG equivalents) are a lot cheaper than their US counterparts. So I have a 25% of my China allocation is in them.

And no, I don't think it's too much risk for little reward. Since China is the world's 2nd largest economy, shouldn't passive market-cap weighted investors be over-weighting it. :wink:

On a side note, isn't saying you don't need EMs like saying you don't need Small Caps?

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Re: Justification for holding Emerging Markets?

Post by unclescrooge » Fri May 19, 2017 5:57 pm

jalbert wrote:The justification for owning EM has to be made by convincing yourself that EM economies will evolve beyond commodities producers and outsourcing servicers to become major parts of the global economic engine and that you want some exposure to EM so you don't get left behind if and when that happens.

Okay, I'm convinced. :D

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