I'm Calling an Emerging Markets Bottom

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sambb
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Re: I'm Calling an Emerging Markets Bottom

Post by sambb » Sun Aug 14, 2016 5:29 pm

Emerging markets - still on a tear! Glad i am in.

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Re: I'm Calling an Emerging Markets Bottom

Post by LibertyLover » Mon Aug 15, 2016 5:41 am

We still don't appear to be overvalued. EM is up in 2016 almost at the level of what it lost in 2015, so there should still be plenty of room for growth.

Vanguard Emerging Markets Stock Index Fund Admiral Shares VEMAX
2015 -15.35%
2016 +12. 82%

1 year return of +5.83%

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grap0013
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Re: I'm Calling an Emerging Markets Bottom

Post by grap0013 » Wed Oct 26, 2016 7:27 am

From the opening post SFENX is up now +45.87%. EM value is particularly on a tear. On a daily basis SFENX is up more than my other EM holdings the majority of the time.
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Tamalak
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Re: I'm Calling an Emerging Markets Bottom

Post by Tamalak » Wed Oct 26, 2016 8:55 am

Nailed it exactly. Great call!

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Re: I'm Calling an Emerging Markets Bottom

Post by ofckrupke » Wed Oct 26, 2016 8:58 am

grap0013 wrote:From the opening post SFENX is up now +45.87%. EM value is particularly on a tear. On a daily basis SFENX is up more than my other EM holdings the majority of the time.
You must be out of band by now then; when are you going to trim/rebalance out? (It seems like a reasonable question since portfolio risk management seems to be a rationale or refuge for holding onto QSPIX...)

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grap0013
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Re: I'm Calling an Emerging Markets Bottom

Post by grap0013 » Wed Oct 26, 2016 9:41 am

ofckrupke wrote:
grap0013 wrote:From the opening post SFENX is up now +45.87%. EM value is particularly on a tear. On a daily basis SFENX is up more than my other EM holdings the majority of the time.
You must be out of band by now then; when are you going to trim/rebalance out? (It seems like a reasonable question since portfolio risk management seems to be a rationale or refuge for holding onto QSPIX...)
Surprisingly I am not out of band yet. 23.5% EM. At 25% I rebalance. Since, I have the "no regrets, minimize EM tracking error poo poo platter" EM allocation of approximately equal parts SFENX, QEELX, DFCEX, and DGS. Some of the other pieces in EM have not done quite as well. Plus heavy tilts in VSIAX and SFILX have performed pretty well YTD as well making hitting the band more difficult. It's been a good year to be an equity heavy tilter thus far. QSPIX is at ~16% for me. I'm buying 5% more at 15%. Getting close.

Funny in early 2016 QSPIX was almost at the upper band of 25% but it never quite got there for rebalancing. Experts suggest having band size proportional to volatility. Since EM has high volatility maybe it needs a 10% absolute band and since QSPIX has a much lower standard deviation maybe it needs a tighter band eg 3%. Hmmm.....

FWIW I'm holding QSPIX for expected real returns, zero correlation, and "juiced" overall portfolio returns rather than for risk management. :twisted: I'd hold 5 year treasuries if I was concerned about risk management. There is nothing better.
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Re: I'm Calling an Emerging Markets Bottom

Post by Theoretical » Wed Oct 26, 2016 9:54 am

ofckrupke wrote:
grap0013 wrote:From the opening post SFENX is up now +45.87%. EM value is particularly on a tear. On a daily basis SFENX is up more than my other EM holdings the majority of the time.
You must be out of band by now then; when are you going to trim/rebalance out? (It seems like a reasonable question since portfolio risk management seems to be a rationale or refuge for holding onto QSPIX...)
Value has been doing well across the board this year, though not to the same degree as EM, so it's less of a relative boost than the 45.87% gains. The other thing is that EM still has good valuations after having been crushed for years. A 45% gain only makes up for 30% of losses, and PXH/SFENX have tons of losses since their founding.

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Re: I'm Calling an Emerging Markets Bottom

Post by ofckrupke » Wed Oct 26, 2016 10:17 am

Theoretical wrote:The other thing is that EM still has good valuations after having been crushed for years. A 45% gain only makes up for 30% of losses, and PXH/SFENX have tons of losses since their founding.
Yes, but the marching orders from the original post in this topic were to buy immediately so as to put one's EM holding(s) at target weight (aka band "center", arithmetic or geometric being a matter of preference...).

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grap0013
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Re: I'm Calling an Emerging Markets Bottom

Post by grap0013 » Wed Oct 26, 2016 10:48 am

ofckrupke wrote:
Theoretical wrote:The other thing is that EM still has good valuations after having been crushed for years. A 45% gain only makes up for 30% of losses, and PXH/SFENX have tons of losses since their founding.
Yes, but the marching orders from the original post in this topic were to buy immediately so as to put one's EM holding(s) at target weight (aka band "center", arithmetic or geometric being a matter of preference...).
Precisely.

FWIW Research Affiliates has data demonstrating when EM PE hits ~10 the following 10 year cumulative returns are ~+180% on average. Sounds about right, PE1 is ~10% for EMV and 1/10 = 10% real annualized expected returns. Add 2% for projected inflation gives you 12% nominal. Rule of 72 it doubles in 6 years or almost quadruples in 10 years. One wants a good slug of EM going forward especially with current bond yields and US equity valuations. If you don't like the volatility of EM add more bonds and/or reduce US equity.
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HomerJ
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Re: I'm Calling an Emerging Markets Bottom

Post by HomerJ » Wed Oct 26, 2016 12:17 pm

Where does one get the historical PE ratios for Emerging Markets?

Is VEMAX (Vanguard Emerging Markets Admiral Index fund) a good proxy to track performance?

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grap0013
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Re: I'm Calling an Emerging Markets Bottom

Post by grap0013 » Wed Oct 26, 2016 12:45 pm

HomerJ wrote:Where does one get the historical PE ratios for Emerging Markets?

Is VEMAX (Vanguard Emerging Markets Admiral Index fund) a good proxy to track performance?
I've only seen historical numbers given by authors. However, one can easily get a 1 year PE by building a free portfolio on Morningstar and looking under the "my view" tab. R2 of predictive value of PE10 vs. PE1 is 0.41 vs. 0.36. A net difference of 0.05. That's nothing. Especially considering the size of the error bars around the estimate. Hence, don't go searching all over the globe for PE10 data. Just do as I say above and you'll have a pretty good idea of current valuations. Take 1/PE1 and there ya go for your real return estimate. All the other ways of estimating returns are overly complicated giving a false sense of precision that just does not exist. Back of the napkin is the way to go.

VEMAX is if cap weighting is your thing. It's not mine so the answer is "it depends".
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HomerJ
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Re: I'm Calling an Emerging Markets Bottom

Post by HomerJ » Wed Oct 26, 2016 1:11 pm

grap0013 wrote:
HomerJ wrote:Where does one get the historical PE ratios for Emerging Markets?

Is VEMAX (Vanguard Emerging Markets Admiral Index fund) a good proxy to track performance?
I've only seen historical numbers given by authors. However, one can easily get a 1 year PE by building a free portfolio on Morningstar and looking under the "my view" tab. R2 of predictive value of PE10 vs. PE1 is 0.41 vs. 0.36. A net difference of 0.05. That's nothing. Especially considering the size of the error bars around the estimate. Hence, don't go searching all over the globe for PE10 data. Just do as I say above and you'll have a pretty good idea of current valuations. Take 1/PE1 and there ya go for your real return estimate. All the other ways of estimating returns are overly complicated giving a false sense of precision that just does not exist. Back of the napkin is the way to go.

VEMAX is if cap weighting is your thing. It's not mine so the answer is "it depends".
I'm curious what the PE ratio was in the past so we can see how the actual returns stack up to the past expected returns.

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grap0013
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Re: I'm Calling an Emerging Markets Bottom

Post by grap0013 » Thu Oct 27, 2016 7:53 am

^I guess I'll do your dirty work: http://samuelssonsrapport.se/wp-content ... 088140.pdf

Check out pages 5, 14, 28 in particular.
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Re: I'm Calling an Emerging Markets Bottom

Post by JimmyJammy » Sun Dec 04, 2016 7:10 pm

The original poster's 'bottom call" is looking pretty good (for the year anyway).

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Re: I'm Calling an Emerging Markets Bottom

Post by JimmyJammy » Sun Dec 04, 2016 7:37 pm


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Re: I'm Calling an Emerging Markets Bottom

Post by garlandwhizzer » Mon Dec 05, 2016 12:54 pm

I was very positive on EM at least until I saw the GS piece. GS warned of a serious decline in gold and PME in 2/2016 and reiterated it in 7/2016. <http://www.kitco.com/news/2015-07-22/Go ... -Gold.html> Their initial call was made almost exactly when the price of gold and PME hit its lowest point in years. From there PME increased more than 100% in 6 months and the called for gold price of $1000/oz never materialized. This does not demonstrate that GS is full of stupid inexperienced analysts. Rather the opposite, GS has the reputation for consistently employing the brightest, most savvy and experienced professionals on Wall Street. What it does clearly demonstrate is the folly of relying on anyone's projections for the near or intermediate term market future, regardless of how wise of savvy they appear to be. I'll stick with EM not because of, but in spite of GS's call.

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Re: I'm Calling an Emerging Markets Bottom

Post by Theoretical » Tue Dec 13, 2016 3:17 pm

45% since the OP for FNDE. It's up 60% for those who bought at the absolute bottom - $15.65

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Re: I'm Calling an Emerging Markets Bottom

Post by livesoft » Tue Dec 13, 2016 3:33 pm

This thread is now so last year. Tell us when the Top happens, preferably the day before. :)
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HomerJ
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Re: I'm Calling an Emerging Markets Bottom

Post by HomerJ » Tue Dec 13, 2016 3:46 pm

Theoretical wrote:45% since the OP for FNDE. It's up 60% for those who bought at the absolute bottom - $15.65
Interesting. Vanguard Emerging Markets Index Fund (VEMAX) is only up 23% since the OP. Schwab Fundamental Emerging Markets ETF (FNDE) obviously invests in different stocks.

Of course they both lost 25%-30% the year before that.

Those of us who have been holding VEMAX for 5 years, we've made 1.6% a year nominal over the past 5 years.

Anyone who bought 10 years ago has made a whopping 2.2% a year nominal over the past 10 years.

Good call to the OP though. He should market-time more often.

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Re: I'm Calling an Emerging Markets Bottom

Post by Theoretical » Tue Dec 13, 2016 3:55 pm

http://etfdb.com/tool/etf-comparison/FNDE-VWO/holdings/

Its kissing cousin and TLH partner, PXH.

http://etfdb.com/tool/etf-comparison/PXH-VWO/holdings/

Notably, 1/4 of the holdings of FNDE will shift in its partial rebalance next Tuesday (incorporating the June changes).

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Re: I'm Calling an Emerging Markets Bottom

Post by sperry8 » Tue Dec 13, 2016 5:50 pm

grap0013 wrote:I'm calling an Emerging Markets bottom this year. Not sure what month/day per se but sometime in 2016. This reminds me of the shoe shine boy in 1999 who is giving his customers stock tips. Twice in the past week I've heard people who are uninterested in investing talking about how Emerging Markets are going down the tubes and to avoid them. EVERYBODY now knows this. Hence the bottom is in sight. Buy buy buy. Yes, yes, yes I hear you. I mean to say "make sure to buy back to your predetermined target allocation". :)
Nice call. I bought on 1/20/16 the day before the low for 2016. In hindsight, looked low to me as well (didn't see this thread). Got lucky getting in at what is the yearly low. I got some much lower during 08/09 but didn't think it would get back there.

I think there will be another opportunity to pick up some EM in the future at lower than today's close. But right now, all stocks are flying up. Won't last - but nice to see. I say won't last because many friends who have been on sidelines are now getting into market. Just now after being out for years and watching markets going up. Like you say, these were people hoarding cash & gold waiting for the big crash. And here they come into the market now. Euphoria is starting to spread. I imagine there is still some time left on the upside to tease them in... but getting closer to some downside once they get in.
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Re: I'm Calling an Emerging Markets Bottom

Post by cutehumor » Tue Dec 13, 2016 7:43 pm

I'm avoiding EM stocks at this time. If a wall gets built next year and a trade war happens with China, EM will hit bottom for sure!

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ray.james
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Re: I'm Calling an Emerging Markets Bottom

Post by ray.james » Tue Dec 13, 2016 8:29 pm

sperry8 wrote:Euphoria is starting to spread. I imagine there is still some time left on the upside to tease them in... but getting closer to some downside once they get in.
I think inflation improving/inflation euphoria + market new heights everyday on TV will get rest of the pigs to the slaughter house. Sad, but I too am starting to see cycle is repeating.
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Re: I'm Calling an Emerging Markets Bottom

Post by LibertyLover » Wed Dec 14, 2016 6:36 am

livesoft wrote:This thread is now so last year. Tell us when the Top happens, preferably the day before. :)
I get the sentiment. In comparison to other assets it still seems that emerging markets is the most undervalued. Developed international may be a bit cheaper but US markets I would place higher.

Small caps, dispute the recent run, could be less overvalued than the S&P 500 due to performance over the last few years.

Just thinking of options of where to send new money...

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Re: I'm Calling an Emerging Markets Bottom

Post by LukeHeinz57 » Fri May 05, 2017 1:11 pm

I apologize for resurrecting a "Zombie Thread". But after a search on EM I found this and just read through the whole thread. I am impressed at the timing of OP's EM bottom call. I guess I was very curious if those who rode the wave are hanging tight or already sold to rebalance? EM still seems attractively priced relative to Developed and especially US Markets for whatever that's worth...
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Re: I'm Calling an Emerging Markets Bottom

Post by aristotelian » Fri May 05, 2017 1:45 pm

Great thread. I am curious if OP has any other contrarian bets for us. Energy?

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Re: I'm Calling an Emerging Markets Bottom

Post by livesoft » Fri May 05, 2017 1:57 pm

LukeHeinz57 wrote:I apologize for resurrecting a "Zombie Thread". But after a search on EM I found this and just read through the whole thread. I am impressed at the timing of OP's EM bottom call. I guess I was very curious if those who rode the wave are hanging tight or already sold to rebalance? EM still seems attractively priced relative to Developed and especially US Markets for whatever that's worth...
I've sold some in an act of rebalancing. Maybe I should not have?

Who decides what "attractively priced" means?
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Re: I'm Calling an Emerging Markets Bottom

Post by LukeHeinz57 » Fri May 05, 2017 2:03 pm

I was using attractively priced as a stand in for comparing the PE ratios of EM, Intl Developed, and US Equities. Obviously, a valid argument could be made that none of them are "attractive" at current levels. But I did say relative to one another in my post. As in, if you are going to be adding funds to equities which market is most attractive.
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Re: I'm Calling an Emerging Markets Bottom

Post by ray.james » Fri May 05, 2017 2:49 pm

I did re balance a little but still 30% of international is EM vs 50% before. Back when Op made this thread, the dollar index is through the roof! VWO had made an almost 40% return since this thread with dividends included.

The vanguard P/E is backward looking and uses harmonic series. One of the side effects in a cycle of strengthening dollar; it often puts out very high P/E(18). I prefer using morning star numbers which is forward looking at current exchange rates(12). It fits my narrative too :?
Last edited by ray.james on Fri May 05, 2017 4:41 pm, edited 1 time in total.
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Re: I'm Calling an Emerging Markets Bottom

Post by asif408 » Fri May 05, 2017 3:23 pm

LukeHeinz57 wrote:I apologize for resurrecting a "Zombie Thread". But after a search on EM I found this and just read through the whole thread. I am impressed at the timing of OP's EM bottom call. I guess I was very curious if those who rode the wave are hanging tight or already sold to rebalance? EM still seems attractively priced relative to Developed and especially US Markets for whatever that's worth...
It's hard to tell the exact path. But the emerging markets index has had near or in excess of 100% returns 3 times in a short time frame before (over approximately 1-2 years): 1998-1999, 2003-2005, and 2009. Because the turnarounds happened mid-year they don't necessarily show up on the annual returns. EM are volatile, but when they are good, they can be very good in a short amount of time. They are up about 40% since January 2016. So they could potentially go up 50%+ more. Or maybe not..........

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Re: I'm Calling an Emerging Markets Bottom

Post by GoldenFinch » Fri May 05, 2017 10:05 pm

livesoft wrote:
LukeHeinz57 wrote:I apologize for resurrecting a "Zombie Thread". But after a search on EM I found this and just read through the whole thread. I am impressed at the timing of OP's EM bottom call. I guess I was very curious if those who rode the wave are hanging tight or already sold to rebalance? EM still seems attractively priced relative to Developed and especially US Markets for whatever that's worth...
I've sold some in an act of rebalancing. Maybe I should not have?

Who decides what "attractively priced" means?
Maybe you should not have. :D

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Re: I'm Calling an Emerging Markets Bottom

Post by HomerJ » Sat May 06, 2017 1:54 am

LukeHeinz57 wrote:EM still seems attractively priced relative to Developed and especially US Markets for whatever that's worth...
EM was also attractively priced relative to Developed and especially US Markets 6 years ago, and it has done very poorly in comparison.

"attractively priced" and comparing PE ratios is no sure thing.

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Re: I'm Calling an Emerging Markets Bottom

Post by NiceUnparticularMan » Sat May 06, 2017 6:47 am

If ever there was a situation where it would make sense to have different valuations, it would be EM, no?

I think it makes sense to overweight EM as a way of getting more diversification from an otherwise U.S.-heavy portfolio. Otherwise, I'm not really inclined to try to read anything into EM's relative valuations.

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Re: I'm Calling an Emerging Markets Bottom

Post by triceratop » Sat May 06, 2017 5:19 pm

HomerJ wrote:
LukeHeinz57 wrote:EM still seems attractively priced relative to Developed and especially US Markets for whatever that's worth...
EM was also attractively priced relative to Developed and especially US Markets 6 years ago, and it has done very poorly in comparison.

"attractively priced" and comparing PE ratios is no sure thing.
I'm always confused when I see people point these things out? Of course, you are correct. But even 6 years ago nobody would have said the PE ratios were a sure thing. There is always an understanding that there is risk involved. And yes, the risk showed up. It's always worth being humble about the predictive power of these things, but it isn't worth waving away discussions about markets being overpriced, either. A happy medium, yes.

Anyway, people shouldnt be setting long-term asset allocations entirely based on PE.
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Re: I'm Calling an Emerging Markets Bottom

Post by grap0013 » Mon May 08, 2017 12:12 pm

LukeHeinz57 wrote:I apologize for resurrecting a "Zombie Thread". But after a search on EM I found this and just read through the whole thread. I am impressed at the timing of OP's EM bottom call. I guess I was very curious if those who rode the wave are hanging tight or already sold to rebalance? EM still seems attractively priced relative to Developed and especially US Markets for whatever that's worth...
Ho ho, you can always keep this thread going! :sharebeer

When I made the EM bottom call my EM value funds had trailing 1 year PEs of ~8 plus there was a lot of negative public sentiment by non-investors at that time. Now trailing PEs are 11-12 (still forecasts about 8% real annualized) and I'm not hearing much/any negative general public sentiment. Staying the course with my EM at 20% +/- 5% holding. Still has the best valuations out there. Cap weighting my EM allocation as a subset of international be darned.
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Re: I'm Calling an Emerging Markets Bottom

Post by grap0013 » Mon May 08, 2017 12:18 pm

aristotelian wrote:Great thread. I am curious if OP has any other contrarian bets for us. Energy?
I haven't heard anything about energy. Good or bad. But if you get negative sentiment + ripe valuations or positive sentiment + excessive valuations that will be your signal. Remember this forum does not count as your sentiment meter. Needs to be general public eg Target store clerk suggests you buy/sell energy. :beer
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Re: I'm Calling an Emerging Markets Bottom

Post by HomerJ » Mon May 08, 2017 12:54 pm

triceratop wrote:
HomerJ wrote:
LukeHeinz57 wrote:EM still seems attractively priced relative to Developed and especially US Markets for whatever that's worth...
EM was also attractively priced relative to Developed and especially US Markets 6 years ago, and it has done very poorly in comparison.

"attractively priced" and comparing PE ratios is no sure thing.
I'm always confused when I see people point these things out? Of course, you are correct. But even 6 years ago nobody would have said the PE ratios were a sure thing. There is always an understanding that there is risk involved. And yes, the risk showed up. It's always worth being humble about the predictive power of these things, but it isn't worth waving away discussions about markets being overpriced, either. A happy medium, yes.

Anyway, people shouldnt be setting long-term asset allocations entirely based on PE.
No, there is NOT always an understanding that there is risk involved. That's why I point it out.

Way too many people on Bogleheads just state the "attractively priced" part with no qualifiers.

I don't mean to wave away the discussion, sorry... I just like to offer an alternate viewpoint when I see people start talking about changing their AA based on valuations.

A happy medium would indeed be good.

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Re: I'm Calling an Emerging Markets Bottom

Post by HomerJ » Mon May 08, 2017 12:57 pm

grap0013 wrote:
aristotelian wrote:Great thread. I am curious if OP has any other contrarian bets for us. Energy?
I haven't heard anything about energy. Good or bad. But if you get negative sentiment + ripe valuations or positive sentiment + excessive valuations that will be your signal. Remember this forum does not count as your sentiment meter. Needs to be general public eg Target store clerk suggests you buy/sell energy. :beer
Signal, eh?

I'm not sure you're getting this whole BH "buy and hold" philosophy correct, grap0013. :)

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Re: I'm Calling an Emerging Markets Bottom

Post by Theoretical » Mon May 08, 2017 1:42 pm

So, in defense of grap003, when he's talking about a signal, he's talking about those very rare extreme valuation situations that are the flipside of the "shoeshine boys talking stocks" that got Joe Kennedy to bail on the markets in '29 or the must-have internet stocks that were the irrational exuberance or the $14K per year strawberry picker with a $3/4 million house.

For example, REITs at 9% yields in 1999, 30 year TIPS yielding 4% real in the worst part of the financial crisis, junk bonds at 12-15% spreads above treasuries, the DJIA in 1932, etc... I also bet (but don't know) 30 year treasuries in 1980-82 were similarly terrifying. When grap made the call, not only were there lots of "avoid international" threads, but EM was getting treated much like nuclear waste both here and in the financial press. That's the sort of "blood in the streets" that can really pay off.

Even Benjamin Graham's Intelligent Investor talks about a number of situations like this. I think it's a good example of being "ok to sin a little."

Also, if I recall, he didn't change his asset allocation, but was merely commenting that the hard road of enduring the downside looked to be coming to an end.

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Re: I'm Calling an Emerging Markets Bottom

Post by livesoft » Mon May 08, 2017 1:58 pm

We don't need to watch for nor understand any signals because grap0013 will post a new thread for us with the latest definitive signal when it happens.
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Re: I'm Calling an Emerging Markets Bottom

Post by grap0013 » Tue May 09, 2017 9:19 am

^^^ Of course! I'm a nice guy. We've got several years of EM gains before they get frothy. Don't hold your breath.
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Re: I'm Calling an Emerging Markets Bottom

Post by HomerJ » Tue May 09, 2017 12:45 pm

Theoretical wrote:So, in defense of grap003, when he's talking about a signal, he's talking about those very rare extreme valuation situations that are the flipside of the "shoeshine boys talking stocks" that got Joe Kennedy to bail on the markets in '29 or the must-have internet stocks that were the irrational exuberance or the $14K per year strawberry picker with a $3/4 million house.

For example, REITs at 9% yields in 1999, 30 year TIPS yielding 4% real in the worst part of the financial crisis, junk bonds at 12-15% spreads above treasuries, the DJIA in 1932, etc... I also bet (but don't know) 30 year treasuries in 1980-82 were similarly terrifying. When grap made the call, not only were there lots of "avoid international" threads, but EM was getting treated much like nuclear waste both here and in the financial press. That's the sort of "blood in the streets" that can really pay off.

Even Benjamin Graham's Intelligent Investor talks about a number of situations like this. I think it's a good example of being "ok to sin a little."

Also, if I recall, he didn't change his asset allocation, but was merely commenting that the hard road of enduring the downside looked to be coming to an end.
The problem with those "very rare extreme valuation situations" is that you can get still get false signals.

People like to point out the 2000 crash, but in real-time, the "very rare extreme valuation situation" occurred in 1996 and 1997. Anyone who believes it's okay to make a big change during a "extreme valuation situation" would likely have done it in 1996 when the DOW was in the 5000s and valuations were over 25 for first time since 1929. But the DOW more than doubled to 11,000 before crashing to the low 7000s.

Ironically, buying the DOW in the 5000s in 1996 was the cheapest price available in the past 21 years. Read that again. Even though valuations in 1996 were the highest they had ever been since right before the Great Depression, it was still a great time to buy.

Be careful about signals. There are way too many variables involved here.

Theoretical
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Re: I'm Calling an Emerging Markets Bottom

Post by Theoretical » Tue May 09, 2017 1:52 pm

HomerJ, you're quite right on that. One would have missed a lot of asset growth that was not lost in the down years of the market. Because the general trend of markets is upwards, subject to all kinds of turmoil, I think if one is going to sin in this area, it's much more likely to pay off being a deep value vulture than a chicken little permabear that is in cash right now. Moreover, it's much better to sin a little - i.e. with a small piece of the pie rather than moving the whole allocation radically one way or another.

I'm always struck by how many posts on this board are of folks going all to cash or all to stocks, putting everything on Black 26, so to speak. Extreme moves, beyond one's initial cleanup from an advisor/hodgepodge portfolio posted in the "I need help with my portfolio," rarely pay off and often leave one worse for the wear.

selters
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Re: I'm Calling an Emerging Markets Bottom

Post by selters » Wed Aug 23, 2017 7:56 am

Emering Markets are up 25.5% YTD and 50.4% since this thread was started.

sambb
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Re: I'm Calling an Emerging Markets Bottom

Post by sambb » Wed Aug 23, 2017 8:21 am

so glad i overweigted this area, and didnt do 3 fund portfolio. Was really at a low before, and i went in. Go EM! Thanks to the OP!

sambb
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Re: I'm Calling an Emerging Markets Bottom

Post by sambb » Wed Aug 23, 2017 8:22 am

so glad i overweigted this area, and didnt do 3 fund portfolio. Was really at a low before, and i went in. Go EM! Thanks to the OP!
for people who say "dont confuse strategy with outcome" - the strategy is to make money in the fund and that is the outcome!!!

staythecourse
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Re: I'm Calling an Emerging Markets Bottom

Post by staythecourse » Wed Aug 23, 2017 8:27 am

Not sure why folks are surprised. EM are either the biggest winners or the biggest losers almost every year (look at Callan tables). I like EM, but its price movement last several years is "Meh, par for the course". Nothing different that it has not done for the last 20+ years.

Good luck.

p.s. Grap, correct me if I am wrong, but thought you had a static allocation to SCV and EM so it isn't like you are market timing. Correct? Just wanted to be clear for the more novice readers.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

WhiteMaxima
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Re: I'm Calling an Emerging Markets Bottom

Post by WhiteMaxima » Wed Aug 23, 2017 10:50 am

I just put a tiny bit into EM. It is sometime big winner or looser. So I can't overweight it. Developed world is more stable so I put majority into it.

DrGoogle2017
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Re: I'm Calling an Emerging Markets Bottom

Post by DrGoogle2017 » Wed Aug 23, 2017 10:54 am

I've been on EM since VWO was 32. It's now 44. But I don't actually own anything, I've been writing cash covered puts.

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unclescrooge
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Re: I'm Calling an Emerging Markets Bottom

Post by unclescrooge » Wed Aug 23, 2017 11:34 am

DrGoogle2017 wrote:
Wed Aug 23, 2017 10:54 am
I've been on EM since VWO was 32. It's now 44. But I don't actually own anything, I've been writing cash covered puts.
So you're mildly bullish to neutral on EM? :mrgreen:

If I was calling a bottom on EM, I'd be in 3x leveraged funds!

Although I did up my EM allocation to 20%, last year.

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