CAPITAL GAINS
Jane Bryant Quinn
Emerging Markets Are a Must
These aren't the same economies that went through the wringer a decade ago. They're countries with booming growth.
China's Shanghai Stock Exchange got a few blue-sky days late last month, but whether the financial smog will lift is anybody's guess. Until last October, the SSE was one of the Olympians, rising a bubbly 464 percent in just 30 months. Then it caught the backwash from America's subprime collapse and plunged 44 percent. Most of the rest of the world's emerging markets dropped, too—India, down 48 percent; Russia, down 25 percent, and Brazil, 36 percent. They're fighting inflation and their slingshot growth has eased. To investors, it looks like a no-go zone.
So here's a counterintuitive idea. Put money gradually into e-market mutual funds over the next six to 12 months, says analyst Peter Perkins of BCA Research in Montreal. These stocks aren't optional anymore. Anyone who sees the future has to own them.
That's a tall order for people who remember the Asian financial crises of 1997 and Russia's brush with debt default in 1998. E-markets feel like a playground for crazies, not for someone soberly trying to grow a retirement fund. But these aren't the same economies that went through the wringer a decade ago. They're modernizing countries with growth rates double and triple those of the developed world. As for financial crises, who's got one now? (Hint: it's not Thailand.)
Put aside the idea that developing countries live on the fruits of cheap labor and raw materials. On the contrary, they're home to world-class corporations with innovative management, superior technology and global reach. To mention just three: Embraer, the top small-jet manufacturer (Brazil); Samsung Electronics, a worldwide brand (South Korea), and Infosys Technology, for IT services (India). "The countries in the former Third World will become the dominant economies of tomorrow," says Antoine van Agtmael, president of Emerging Market Management and author of "The Emerging Markets Century."
Right now, these stocks face a wall of worry. Their export markets depend on the health of the global economy and the developed world is slowing down. Also, they lack deep credit markets where businesses can get long-term loans, says Andrew Foster, chief investment officer of the Matthews Asian Funds. India, for one, depends on U.S. capital to grow its ragged infrastructure. When U.S. banks retrench, loans are as hard to get in Bangalore as in Baltimore.
Emerging markets outperformed Standard & Poor's 500 stock average over the past one, three, five and 10 years. It's logical to expect the S&P to be a better play.
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Member Comments
Posted By: jlmealer @ 08/28/2008 7:49:18 PM
Comment: Hello Chris,
Actually this is a plan that is already in place, ready to go and viable under current laws (laws that are set to be changed by Obama's tax goals and AFL CIO rules an allowances IF he were elected).
What you do not undertsand, my friend, (habit picked up from McCain)... Is that the AFL CIO is a huge supporter of both Obama and Obama's huge network of lawyer supporters. If Obama's plans ever become the law of the land and the AFL CIO gains additional power and the power to enforce all workers.... The corporations that employ us will fold. A private party that answers to no one but themselves (the AFL CIO and other unions) are the most dangerous group in the USA.
The unions are not for the workers. The unions are for themselves!
We seriously need the McCain 3R Plan... As The post states.. This is the vague "Abbrviated version", and really should not be public knowledge yet or in this form. ((Yeah.. so shoot me folks))
I am on your side, as we should all be for America and for jobs. Conservative or Liberal, Repuiblican or Democrat.. Libertarians as well... We MUST make this work this year or we are screwed!
http://www.betterconstructed.com
Hope to spread more of this 3R Plan at the Values Voters Conference in September!
Posted By: chris__w@hotmail.com @ 08/06/2008 10:08:13 AM
Comment: Um... the "3R Plan"? It isn't actually a plan in the sense of "set of discrete proposals oriented toward a discernible goal". It's more like a series of vaguely connected platitudes and hopes. Actually, it reads more like gibberish.
Go to <http://www.barackobama.com/issues/economy/> to see what a real plan looks like.
Posted By: jlmealer @ 08/03/2008 2:44:43 PM
Comment: Good article Ms Quinn.... The USA has a great opportunity to grow with McCain's economic 3R Plan...
We have taken this to the private sector and realize it can only work under current laws and not with Obama's changes. In fact, America would be choked to death under the ObamaRegime. Here it is.. The 3R.
JOHN McCAIN???S 3R ECONOMIC PLAN 2008
Abbreviated version
Progressive thinking Republican Candidate John McCain comes through for America with his 3R economic plan. In the persona of Theodore Roosevelt, McCain???s plan just makes sense.
FIRST , keep in mind that to drop the fuel tax, the local gov???ts would crash. We must use the 3R to replace taxes lost from replaced fuel through green energy (Yes, we have it ready to go!)
www.betterconstructed.com
1. RETHINK: America must see globally on what America is capable of in our current state of technology, engineering and meet the demands that face the world.
Private Sector framework is in place and current laws allow the 3R to happen. The Progressive attitude of John McCain to get things done by crossing party lines will resurrect America.
2. REFORM: The American people must demand higher quality products and less restricted trade routes for Made in USA components. We will lead the way of MFG again!
The USA will reform its dead manufacturing base
3. REINVENT: America and Americans must reinvent themselves to reach and maintain these standards and by sheer American ingenuity, control the world???s marketplace in the competitive manner, as the USA has always been proud to be #1.
NUTS AND BOLTS of the plan are simple.
Billions of savings equates to millions of lost tax revenue from energy companies. The US needs a separate tax revenue source before we can move away from fossil fuels.
McCain 3R solution.
McCain???s 3R is about technical, closely monitored and rapid hands on training from pros to create new pros. Thousands of currently-job-displaced ???once leaders in the manufacturing arena??? will be asked to train and play instructor rolls in the 3R plan. Paid, of course, as these new leaders will help create a whole new style of prosperous America. A massive restructure providing thousands New American MFG means millions of new jobs for infrastructure alone.
We have the buildings, needs and infrastructure to do this!
New jobs is the mainstay for Creating a new guard for Social Security.
This is the new place for financial speculators to invest!
McCain???s Progressive nature embodies Theodore Roosevelt more than any US presidential candidate in history since the original Rough Rider blazed the greatest era of growth in America.
We need John McCain to lead our nation with the same type of change.
Men and women of all races on equal ground operating their own businesses or taking part as an employee. No more hyphenated Americans! Thinking like Theodore Roosevelt all the way to a stronger America.
www.betterconstructed.com
THIS 3R DRAFT COURTESY OF:
John Lewis Mealer, Founding President of Mealer C