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Jul 29, 2009

[FWD: Triple-Digit Returns In Emerging Markets]

-------- Original Message --------
Subject: Triple-Digit Returns In Emerging Markets
From: Forbes Newsletters <>
Date: Wed, July 29, 2009 11:09 am

July 29, 2009
Dear Investor,
Stocks are finally moving in the right direction again, but is your portfolio growing fast enough to make up for the likely drubbing it took in 2008? Probably not, if you're only invested in U.S. stocks!
The S&P 500 is up 45% from its 12-year low on March 9, 2009, and the Dow Jones Industrial Average is up 40%. This is good news and we should be happy...but wouldn't you be much happier if you'd doubled your money in the past few months?
Stocks that I've recommended to readers of my newsletter, Forbes International Investment Report, have doubled and tripled in less than five months. In March, I recommended iGate Corp. (IGTE), a California-based Indian outsourcing company, when it traded for less than $2.50. It's up 237%. Also, Cascal NV (HOO), a European water company with most of its operations in China and Latin America, is up from $2 to nearly $5 since I recommended it.
Just playing the averages on overseas markets has earned you far higher returns than investing in the U.S. "BRIC" (Brazil, Russia, India and China) investing is clearly back in style, as emerging markets have been among the star performers. Check out these returns from March 9 through July 27.
S&P 500 Index +45%
MS India Investment Fund +113%
Market Vectors Russia +93%
FTSE/Xinhua China 25 Index +82%
iShares Brazil +76%
MSCI Emerging Markets Index +74%
Even with these kinds of jaw-dropping, short-term returns, stocks of companies from emerging markets are poised to continue moving higher, backed up by undeniable demographics and wealth creation in these quickly developing economies.
The global economy has been in a deep recession, but there are two major economies bucking the trend: China and India. Economists expect China to deliver 6.5% GDP growth in 2009, while forecasts for India run about 5%. Even in the worst of times it's possible to find some obscure economy, somewhere, that happens to be booming. But we're not talking about Tunisia and Turkmenistan here. China and India are two of the largest countries on the planet, each with more than one billion inhabitants.
Guess what? China and India also happen to be among the world's top-performing stock markets this year.
In Russia, my readers and I have profited wildly from investments in telephone service providers like Mobile Telesystems (MBT) and Vimpel-Communications (VIP), which have both doubled from their lows. Although political risk here may be acute, the economics of an energy superpower make Russian stocks a must-have for bold international investors.
Finally, in Brazil, the twin plays of natural resources and a developing consumer class have produced a bumper crop of profits for our readers. I was urging my readers to load up on shares of Brazilian oil company Petroleo Brasileiro (PBR) at $18 last fall. Since then, PBR has gained 110%!
If you feel that you've missed the boat with Asian and emerging markets stocks, let me tell you that you have not. While it's always nice to buy right at the bottom, buying at today's prices will still make you money. These markets have a lot of lost ground to cover.
The MSCI All-Country Asia Pacific ex-Japan index (Australia, China, Hong Kong,
Indonesia, Japan, Korea, Malaysia, New Zealand, Philippines, Singapore, Taiwan and Thailand) rose almost six-fold in the two decades from Dec. 1987 to Dec. 2007. A lot of those gains evaporated last year.
In late 2007, Mr. Market went bananas for Asian stocks, offering outrageous prices for anything remotely related to China. Now we're at a different inflection point. Asian stocks are currently at about the same levels as the mid-1990s, just before the Asian currency crisis. Now Mr. Market is trying to tell us that little has changed in Asia in the past 12 to 15 years. That's nonsense.
The crisis of 1997 and 1998 did a lot of damage, but it also left Asia with vastly better macroeconomic policies, more foreign exchange reserves in the coffers, stronger banking systems, and better managed companies. But Mr. Market could care less about that because he's too busy looking at the dreadful data from the past two quarters. He is convinced that the past 15 years of Asia's economic development were an anomaly, and the last two quarters are the real trend.
Load up on these Asian and emerging markets stocks before Mr. Market changes his mind.
Emerging markets were the "innocent bystanders" last year. The crisis wasn't their fault (for a change) and yet they got slammed the hardest when Wall Street came undone. Emerging markets had to bounce back strong after things stabilized and that's pretty much exactly what they did. It was the ultimate play on "the world not ending."
The best part is that you can still make big money in emerging markets. Join me and my subscribers in this pursuit of profits and sign up to receive Forbes International Investment Report without delay. Do so now to download the most current list of buys and sells.
Here's what you can expect from Forbes International Investment Report:
  • Global Core portfolio: 25-30 best investment ideas in Europe, Asia and the Emerging Markets
  • Borderless Investor portfolio: U.S. multinationals, as well as international stocks and funds
  • Additional Ideas: Stocks and funds for investors who want more exposure to a particular region or country
  • Exclusive Q&A features with top-ranked global fund managers, analysts, economists and top executives of international companies
  • Insightful commentary on current developments in the global economy and stock markets
  • Detailed buy, sell and hold stock recommendations


John H. Christy
Editor, Forbes International Investment Report
Forbes Newsletters
About John Christy
John H. Christy III, is a veteran financial editor and analyst whose experience includes Forbes magazine and Bloomberg's Asia Finance desk in Tokyo. John is also a Chartered Financial Analyst with experience working in a boutique global investment management firm. In international markets it is not only what you know, but who you know and John's rolodex is a virtual international Who's Who of the most important CEO's, politicians and money managers around the globe.
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