“In the roughly 25 years since the legendary Sir John Templeton took the twofold risk (one, of betting on emerging markets, and two, hiring me) to run his pioneering emerging markets fund, I’d put in enough time on commercial flights to earn myself a number of frequent-flier first-class flights to the moon. I’d toured rubber plantations in Thailand and road-tested bikes over the pothole-ridden roads of rural China. I’d choked on roasted camel’s meat, sheep’s eyeball, guinea pig, and dined (surprisingly well) on scorpions on toast. I’d hobnobbed with princes, potentates, and pashas, and been swindled in souks so labyrinthine I’m still amazed I ever found my way out. I’d taken bone-jolting rides on mountain roads that would have turned my hair gray if I had any left to turn. All to find ‘undervalued companies’ before other investors do. I think you could safely say that I’m driven.” — Mark Mobius

Mark Mobius: Background & bio

Mark Mobius, Ph.D., is the executive chairman of Templeton Emerging Markets Group. Mark Mobius joined Templeton in 1987, and he currently directs the Templeton research team which is based in 18 global emerging markets offices. Additionally, he manages Templeton’s emerging markets portfolios. Mark Mobius developed a reputation for sniffing out stocks that are undervalued relative to their growth potential.

Mark Mobius has been investing in global emerging markets for more than 40 years and has received numerous industry awards, including being named one of Bloomberg Markets Magazine’s “50 Most Influential People” in 2011, “Emerging Markets Equity Manager of the Year 2001” by International Money Marketing, “Ten Top Money Managers of the 20th Century” in a 1999 Carson Group survey, “Number One Global Emerging Market Fund” in a 1998 Reuters Survey, “1994 First in Business Money Manager of the Year” by CNBC, “Closed-End Fund Manager of the Year” in 1993 by Morningstar, and “Investment Trust Manager of the Year 1992” by the Sunday Telegraph. Mark Mobius was voted by his peers onto a list of the top 10 investors of the 20th century, putting him alongside Warren Buffett, Julian Robertson, and George Soros. What Bill Gross was to bonds, Mobius was to emerging markets: the King.

In 2006, Asiamoney magazine listed Mark Mobius as one of the “Top 100 Most Powerful and Influential People.” Asiamoney stated that Mark Mobius “boasts one of the highest profiles of any investor in the region and is regarded by many in the financial industry as one of the most successful emerging markets investors over the last 20 years. Despite tough times during the financial crisis nine years ago, he still commands a strong following in the investment world and is influencing the direction of billions of investment dollars.” The World Bank and Organization for Economic Cooperation and Development appointed Mark Mobius, joint chairman of the Global Corporate Governance Forum Investor Responsibility Taskforce.

In addition, he has written several books, including “Trading with China,” “The Investor’s Guide to Emerging Markets,” “Mobius on Emerging Markets,” “Passport to Profits,” “Equities—An Introduction to the Core Concepts,” “Mutual Funds—An Introduction to the Core Concepts,” ”The Little Book of Emerging Markets,” and “Mark Mobius: An Illustrated Biography.”

Mark Mobius earned Bachelors and Masters degrees from Boston University, and a Ph.D. in economics and political science from the Massachusetts Institute of Technology.

Mark Mobius had a strong relationship with Sir John Templeton, another emerging markets investor, and founder of Templeton Investments. Sir John Templeton established the Templeton Growth Fund, Ltd. during 1954 and was among the first to invested in Japan in the middle of the 1960s. Sir John Templeton’s is noted for actions during the depression of the 1930s. He purchased 100 shares of each NYSE-listed company which was then selling for less than $1 a share, later making many times the money back when USA industry picked up as a result of World War II. Remembering Sir John Templeton | Mark Mobius Blog

Mark Mobius believes in “getting out and kicking the tires” for his potential investments. Even at the ripe old age of 78, Mark Mobius is on the road 205 days a year, visiting companies in almost every corner of the globe. In Mark Mobius’s words:

“After chalking up over 30 million miles of flight time, I’m proud to achieve the status of a full-time nomad. I would rather see with my own eyes what’s happening in a company or country. Lies can be as revealing as truth, if you know what the cues are. You have to observe and listen to the signals. This is one advantage of getting to know the people who run the show and viewing a factory or plant. You won’t get the same type of information by just scanning through cold, hard data or numbers.

My personal theory is that countries that make it easy for travelers to enter tend to be friendly to foreign investment. Whenever I visit a new country, my radar kicks in the moment I hop off the plane and pass through customs. It intensifies as we drive into town, check into the hotel, talk to the cab drivers, walk around the neighborhood and chat with the service staff in shops (The condition of the infrastructure is often a sign of economic efficiency.).

This blog is an avenue to share my personal observations on a more regular basis, to give you a feeling for what I do and why — to share some of my emerging markets adventures. Be on the lookout for more posts in the future.”

Thanks to Mark Mobius’s skill, an initial investment of $100,000 in the Templeton Emerging Markets Fund 28 years ago would be worth about $3.3 million today. Mobius’s flagship Asian Growth Fund has gained 4.3% annually over the past five years, trailing 44 of 46 similar funds. At his peak during 2011, Mark Mobius was managing $39 billion in assets.

Mark Mobius: Investment philosophy

Mark Mobius uses a bottom-up, long-term and value-oriented investment philosophy in emerging and frontier markets. Mark Mobius uses a hands-on approach, traveling around the globe frequently to conduct in-person company visits.

Mark Mobius and his team have used the same investment strategy for more than 25 years. The team inherited its approach from Sir John Templeton, who summed up his thinking well with these words: “To buy when others are despondently selling and to sell when others are buying requires the greatest fortitude and pays the greatest ultimate rewards.”

When looking for investments, Mobius and his team screen more than 25,000 securities, then conducting deep quantitative and qualitative analysis to assess each company’s long-term value potential. The quantitative analysis includes five-year historical audited financial statements and five-year forecasts based on projected future normalized earnings, cash flow, or asset value potential. Qualitative analysis covers understanding of the company’s business, management quality, ownership structure, corporate governance and commitment to creating shareholder value. That includes an understanding of who owns and controls the company, how it operates, and in what markets.

After filtering out the best opportunities, Mobius and his team conduct research on the ground. There are currently  53 investment professionals on the Templeton Emerging Markets team spread across 18 global offices visiting 1,500-2,000 companies per year. Mobius himself is on the road 250 days a year.

Ongoing fundamental research drives all buy and sell decisions. Templeton’s analysts set a target price for particular stocks and review all our holdings regularly. As value investors, Mobius and his team seek to invest in companies that are trading at a discount compared to five-year valuation projections and adhere to a strict sell discipline based on valuation thresholds.

One deal breaker includes unhealthy corporate governance. Mobius believes that corporate governance is a very, very important issue. So the first things Templeton’s team looks for is a strong culture and ethical conduct.

“Getting into the guts of governance means we conduct analysis of ownership structures, the management team’s track record, the company’s corporate governance history and its commitment to creating shareholder value. We look for managers who know the business well and have experience in a given field. We track management’s ability to cope with a rapidly changing business environment, and evaluate whether the risks a company takes seem rational and have the potential to be properly rewarded.”

“Emerging markets have traditionally been volatile and can be dominated by retail investor flows and sentiment changes, but we seek to use this volatility to identify potential bargains. We believe strong growth prospects in many emerging markets aren’t always recognized in equity valuations, and can lag those of developed markets by a considerable margin. As such, select companies or sectors in our portfolios may not perform as we’d like in a given month or year, but we are long-term investors, not short-term traders and we abide by our sell discipline.”

“Sometimes a falling market tide will drop even the soundest of ships, and that’s when bargains can be born. But there are times when stocks are priced cheaply because they are distressed. We may invest if we believe these sorts of companies can turn things around, given some time. Even good companies can fall on temporary hard times.”

“We think the best indicator of whether a stock is a good value or has completely lost its luster (what one might call “a value trap”, or fallen but still expensive relative to its intrinsic value) boils down to growth. If we don’t see any future growth potential, a company isn’t worth investing in; but if it’s inexpensive and earnings projections look good then there can be a case to invest. Of course, when a particular stock market is rapidly rising, it can be harder to find individual values. If a stock approaches what we deem to be fair value, we may consider reducing a position.”

“For all our stock-specific analysis, I should add that we do also examine macroeconomic factors in a particular country that support our investment themes, but don’t tend to be more bullish on one country or region than another, since we focus on individual companies. We believe there are great companies in all countries around the world, and that most markets have at least some attractive stocks.” — Mark Mobius

Mark Mobius: Blog

Investment Adventures in Emerging Markets

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Mark Mobius: Quotes

“You’re sometimes got to take some pain in the short term in order to outperform in the future.”

“In the perception gap between emotion and reason, you’ll find your buy window.

Someone asked me once if I could condense into five words the most important qualities needed for a good investor, and I replied: ‘Motivation, humility, hard work, discipline.’”

“John [Templeton] became my mentor in many ways. His investment philosophy blends in well with my understanding of human psychology and personality because we both liked to go to unusual places to unlock hidden value. For example, if my goal had been to achieve the same results as everybody else, then I wouldn’t have taken the initiative to move to Asia in the 1960s and do something different.”

“We look for the next big crash in emerging markets because in value investing, money is made after the crash, not before, so we don’t mind seeing crises or downturns.”

“People say emerging markets are dangerous places to invest, but Bernie Madoff operated in the U.S. for years. My belief is that there are good and bad people in every country.”

“The vast majority of the bargains out there are in shares of organizations that have made a few mistakes along the way. That’s why these stocks are so cheap. That’s why a whole lot of smart people think they’re headed nowhere in a hurry. Our job is to prove them wrong.”

“Without risk, I believe it is difficult for your portfolio to aim to achieve superior investment returns. But that risk taking is not the same as playing roulette or skydiving.”

“More often than not, the line separating the winners from the losers can be embarrassingly thin.”

“It’s… important to recognize that not only is nobody perfect, but mistakes are an integral part of investing.”

Mark Mobius: Books

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