Checking In

I had to come to our office in Phoenix today and am just now able to check in on the blog; thank you for all the comments!

Last week I mentioned the Latvian lat (the currency there) as being vulnerable to some sort of Iceland-like episode. This morning I found this article in the International Herald Tribune about the same thing and also mentions a couple of other countries in the region that are less at risk but at some risk nonetheless.

I believe generally knowing about these things is useful. Knowing that China has been frothy for the last couple of months (or longer?) and that government officials were concerned (Tuesday was not the first time the officials expressed at least a little concern) may have helped make yesterday a little easier for some folks.

Herb Morgan has an article up at Seeking Alpha revisiting why he doesn’t own emerging markets and using yesterday as a validation of some sort. While I think he has it wrong he did not deserve to get filleted in the manner he did in the comments.

He obviously missed out on more than he benefited yesterday but chances are his clients are generally comfortable without emerging markets or they own it elsewhere.

In case you missed this; here is an interview with Mark Mobius.

Marc Faber would not be a buyer in emerging markets here.

I view the yen as a canary for the market for the time being as yesterday sorts itself out.

3 Comments

  1. I disagree with Herb Morgan as well.

    He claims “My rejection of emerging markets for our client portfolios was never based on a disbelief in the expansion of economic activity in the region but rather on a firm conviction of the ability of such markets to deliver sudden and seemingly unexpected corrections. It remains my position that emerging markets present a disfavorable risk reward relationship and that further weakening can be expected in the near term.”

    I would think someone looking to do MVO or some proprietary version would look at the volatility and returns in something like VWO – plus Sharpe ratio? – and find it an excellent piece to add to a portfolio. The (downward) volatility gives you chance to rebalance into the asset class, the strong returns (upward) give you a chance to roll back out of it.

    Furthermore VWO only has a .3% expense ratio.

    While it’s been hard to rebalance the last twelve months I’ve been able to with VWO a number of times to good effect.

    That “year of the pig”, “fire and ice” commentor on his article probably thinks AA stands for Astrological Allocation.

    Reply
  2. It was interesting how gold crapped out yesterday. I thought it was supposed to be something to own when the End of the World was at hand? Any idears why?

    Reply
  3. Being a professional and stating that you are disengaging from a large number of international markets seems unprofessional to me.

    Reply

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Checking In

I had to come to our office in Phoenix today and am just now able to check in on the blog; thank you for all the comments!

Last week I mentioned the Latvian lat (the currency there) as being vulnerable to some sort of Iceland-like episode. This morning I found this article in the International Herald Tribune about the same thing and also mentions a couple of other countries in the region that are less at risk but at some risk nonetheless.

I believe generally knowing about these things is useful. Knowing that China has been frothy for the last couple of months (or longer?) and that government officials were concerned (Tuesday was not the first time the officials expressed at least a little concern) may have helped make yesterday a little easier for some folks.

Herb Morgan has an article up at Seeking Alpha revisiting why he doesn’t own emerging markets and using yesterday as a validation of some sort. While I think he has it wrong he did not deserve to get filleted in the manner he did in the comments.

He obviously missed out on more than he benefited yesterday but chances are his clients are generally comfortable without emerging markets or they own it elsewhere.

In case you missed this; here is an interview with Mark Mobius.

Marc Faber would not be a buyer in emerging markets here.

I view the yen as a canary for the market for the time being as yesterday sorts itself out.

Submit a Comment

Your email address will not be published.

WP-SpamFree by Pole Position Marketing