Carry on as usual
Iborrowed the headline from a research report written by Societe Generale, a French bank with a great knowledge of emerging markets as well as being a big player in core European markets. But why should this report interest the wider investment community? Briefly, it represented the short-termism in outlook for the investment universe. At this point I’d like to direct your attention to the last issue of the Economist. The headline across its cover ran: “The bull market in everything,” which illustrates that the prices of all assets, from stocks and bonds to property, are high and heading higher. Shall we take the sceptics’ side of ‘a crisis is coming’ or join the ‘carry on’ party for celebrations? Neither side of this equation will guide you through the highest risk of ‘financialization,’ which took the whole financial industry to the brink in the Great Recession of 2008. It’s time to re-read a revised and updated edition of Benjamin Graham’s classic on investing, ‘The Intelligent Investor,’ which advised all investors to have ‘a proper margin of safety.’ So, keep all this in mind and let’s return to our emerging markets universe.