Capturing Domestic Demand in Emerging Markets: Neither Small Caps nor Multinationals Are a Good Proxy

0
Capturing Domestic Demand in Emerging Markets: Neither Small Caps nor Multinationals Are a Good Proxy

We believe one of the most compelling investment opportunities over the next few years is likely to be in companies that serve domestic demand within emerging markets. Our case rests on two underlying and interconnected forces – one economic and the other demographic. As poor countries get richer, they save as much as they can. Savings rates usually   rise until countries reach a range of $3,000 to $10,000 per capita GDP. Once in that range, savings rates begin to decline and consumption becomes a larger part of GDP growth as society starts to provide a social safety net. At this level of wealth, per capita consumption of all goods and services rises in a highly non-linear fashion. For example, while Chinese per capita  GDP quadrupled from $1,000 to $4,000 during the past decade, auto sales rose from one million vehicles per year to over  17 million. Markets rarely anticipate this kind of non-linear growth.

AD Capturing Domestic Demand in Em 112

ValueWalk Premium Subscription Includes:
Hedge Fund Launches Jump Despite Equity Market Declines

Last year was a bumper year for hedge fund launches. According to a Hedge Fund Research report released towards the end of March, 614 new funds hit the market in 2021. That was the highest number of launches since 2017, when a record 735 new hedge funds were rolled out to investors. What’s interesting about Read More

  • 3 Write-ups per month (EXCLUSIVE content that you won’t find anywhere else)
  • Personal Track Record from Jacob’s Brokerage
  • Any question you have answered within 48 hours
Capturing Domestic Demand in Emerging Markets: Neither Small Caps nor Multinationals Are a Good Proxy

Updated on

Sheeraz is our COO (Chief - Operations), his primary duty is curating and editing of ValueWalk. He is main reason behind the rapid growth of the business. Sheeraz previously ran a taxation firm. He is an expert in technology, he has over 5.5 years of design, development and roll-out experience for SEO and SEM. - Email: sraza(at)www.valuewalk.com
Previous article Mario Gabelli Launches Ultra-concentrated fund
Next article Hear David Winters, Mohnish Pabrai and other Great Investors Speak

No posts to display