• January 10, 2016 at 12:21 am #2315
    Andrew H
    Participant

    Hi Cam,

    What is your view on emerging market now? I am thinking of adding ETF, such as, EDC, EEM and etc.

    The P/B of emerging stock is below 08′ level and is now equivalent to 01′ and 03′ level. Buy EDC/EEM and hold for 6 months, and there can be a 20+% returns?

    Thanks!

  • January 10, 2016 at 7:22 am #2329
    Cam Hui
    Keymaster

    EM equities have been highly correlated with commodity prices, which are inversely correlated to the USD. In effect, a bet position on EM is a bet on USD weakness.

    While I am constructive on commodity prices and therefore EM equities, you also need to be aware of the macro bets that you are taking if you buy EEM, etc.

  • January 15, 2016 at 8:55 am #2590
    Andrew H
    Participant

    Do you think EM equities is hit the bottom as of now? Or there are too many moving parts – commodity prices (esp oil), macro, yuan depreciation?

  • January 16, 2016 at 1:55 pm #2615
    Cam Hui
    Keymaster

    See the chart in Gundlach presentation on EM and commodity prices:
    http://www.businessinsider.com/jeff-gundlach-presentation-januray-2016-2016-1

  • January 16, 2016 at 8:38 pm #2619
    Andrew H
    Participant

    In that case, EM equities has another 40% to drop?

    Also, since your forecast is that US equities will peak in Q2/Q3 2016, the divergence between EM and US equities will continue?

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