Mark Mobius, co-founder at Mobius Capital Partners, discusses opportunities he sees in emerging markets and explains why he is bullish on EM debt. Brian Belski, chief investment strategist at BMO Capital Markets, joins the discussion on “Bloomberg Daybreak: Americas.” (Source: Bloomberg)
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You’re the guy. What do you do with a sell off to sell into it. Or do you look for value.
Look value definitely. I mean we’ve seen so many of these pockets bombed out is tremendous opportunities. I’m not saying you jump up with the jump in with two feet but at least you get this top pick. I mean the beautiful thing about these situations is that they’re always going to be winners and losers. Even if the Chinese situation gets worse. This trade war. And Trump imposes 20 25 percent tariffs. When it’s in China. And we’ve got to look for those.
So where would you be looking to buy. Because as I mentioned before it’s the worst sell off peak to trough we’ve seen since 2008. And you have to wonder if it’s going to be an eFax if it’s gonna be a bonds it’s going to be equities and my country specifically.
Well definitely equities. Those are the things that really hit hard. And with few exceptions of course bonds in. Argentina and a few other places like Turkey have been bombed out as well. But we think equities are the place to be and the countries move in just putting together a portfolio of new funds and Brazil resulted in very. Highly in that. India of course is very big. Korea is sitting there. Those are the big ones at this stage of the game. But then along the side with sweet sweet things like Russia opportunities in Argentina and South Africa. So there are lots of interesting things happening in these countries and you got to remember that individual companies is where you got to focus because a lot of the.
Companies that benefit from this kind of volatility that we’ve been seeing some more if there is going to be a Ternium and we’re we’re looking around a chart showing what’s happened with currencies and stocks as well. Where are you going to come from because isn’t there a tightening of the Fed that’s helping drive this. Isn’t there a problem with the trade as you refer. To it that continues even today. So what’s going to turn it around.
Well I think first of all you’re going to see it devaluation of the body. I mean if you are sitting in Beijing and you happen to be 25 percent tax being put into your. On your goods going into America the best chance would be to devalue the currency by that amount. So we could be seeing as much as a miniature dollar. I mean it’s not beyond the possibility of Marceaux I think.
I think you’ve got a watchful market we see even envy to the dollar. I can’t imagine that global market. Just taken out to the woodshed about their minds in August 2015. Scenario.
Is question there will be a lot of Glenarm this week. But just remember there are some countries that have very strong. Balance sheets look at what’s happening in Thailand. Thailand. Has held up very nicely. So yes it is true that if China devised by that amount. Would be a lot of losers but also winners. You must forget. That there’s a possibility I’m guessing.
What’s your view. Have we bottomed out or are about to bottom out or is there going to be a lot of blood on the street marches. Well my question for Mark would be Mark.
Excluding currency we all know about currencies. So if you take. Currency discount and then you actually really look at fund. Metals how do you know that you can will and should be. Avoiding a value trap. There’s a price there is a Neumar entered in. Banadir where can we believe in the denominator in terms of. Book value cash flow and earnings and when does that switch. Kind of take place you can actually believe in those. Values. Well we can believe in these values if. Number one the balance sheet of the company you’re looking at is strong. And that’s just the key factor that will hit.
It at this stage of the game too. Let’s look at those companies. Have. An earnings potential an industry that is growing at any. And they are in a consumer oriented.