Focus On Themes (Not Geography) In Emerging Markets by Colin Moore
For investors struggling to find growth opportunities in a low growth world, Colin Moore offers two insights. Don’t write off Brazil, and don’t treat emerging markets as a homogeneous asset class.
In his 2021 year-end letter, Baupost's Seth Klarman looked at the year in review and how COVID-19 swept through every part of our lives. He blamed much of the ills of the pandemic on those who choose not to get vaccinated while also expressing a dislike for the social division COVID-19 has caused. Q4 2021 Read More
Brazil is in the spotlight this year, both as host of the summer Olympics and as a country with a long list of problems. But after a recent visit to Brazil, I think investors should look much more positively at the country. Brazil is a country rich in resources, especially its people. Improving health care and education will be critical to building a strong foundation for long-term growth. With proper stewardship and better fiscal control, Brazil’s future looks much brighter than it did just one or two years ago.
Brazil is not the only emerging markets country with opportunity for investors. In today’s low and slow growth world, you have to identify where there are pockets of growth. One way to do that is to look at themes where there is growth around the world, such as the development of health care or the development of infrastructure. Emerging markets are going to be at the center of both these developments.
It’s a mistake just to think about emerging markets geographically. We all got obsessed about BRICs (Brazil, Russia, India and China). When you create these acronyms or names like “emerging markets,” you’re assuming a level of homogeneity about how they will act, and that’s clearly not the case. The trick will be to move beyond the country definition of emerging markets and take a more thematic approach.