China’s stock market was a roller coaster in 2012, and those investors with a weak stomach for unpredictability probably found the ride unpleasant. It’s true that by many measures last year’s weak market performance in China’s A share market was disappointing, but in a market of this size the story isn’t all good or all bad, so unlike the market masses, I remain confident about China’s prospects and continue to search for long-term investment opportunities in China. As the late Sir John Templeton famously said, “The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Read more…
It’s easy to fall prey to misconceptions and generalizations about places we’ve never been: to assume everyone in the United States drives big cars, all the French love croissants and all Canadians play hockey. There are many misconceptions about investing in developing markets, and Africa certainly has its fair share, but it’s dangerous to make sweeping generalizations. It’s impossible to know everything about this huge and diverse continent (the second largest in the world by land mass and population) so my team’s approach has been to keep our minds open to the growth possibilities while keeping our eyes open to the potential risks. Read more…
My latest visit to India coincided with the celebrations of Navratri culminating in the day of the Dussehra, which symbolizes the victory of good over evil as exemplified by Lord Ram killing the demon king Ravana. The festive season starts from the Navratri and continues until Diwali, several weeks later.
In Delhi, my team and I had the privilege of attending one of the many Dussehra celebrations taking place all over the country, an event with some of India’s most prominent officials in attendance. When we arrived, the situation was a bit chaotic, with people milling about and pushing to get onto the grounds, but at the same time it was a festive atmosphere. Purveyors were offering local delicacies such as “roller ice cream,” which is made by dripping an ice cream mixture over a hand operated roller filled with ice and salt, as well as the roomali roti bread (handkerchief bread) which is made by flattening a ball of dough and tossing it in the air to stretch to the thickness of a handkerchief, then baking it on a heated dome.
At the celebration site, there were three 10-meter tall paper and wood effigies of Ravana and two of his family members with red blinking eyes. At the right moment, all the dignitaries were handed richly decorated bows and arrows which they shot in the direction of the effigies, symbolizing the Ram killing the three demon kings. A fireworks display followed, and the effigies went up in spectacular flames. This ceremony was duplicated all over Delhi and other cities in India. I think the most remarkable aspect of the ceremony was that although there were security people at the entrances, security was largely absent inside and near the official podium.
As we traveled to and from the celebrations and to other meetings in India, to us it really brought home the burgeoning traffic crisis there. My team and I visited Delhi, Mumbai, Pune, Bengaluru (formerly known as Bangalore) and some more remote corners of the country during this trip. The migration of farmers from rural areas to cities combined with the explosion of car and motorcycle ownership is creating infrastructure bottlenecks, which won’t likely be cured quickly. Read more…
The “year of the dragon” in 2012 certainly didn’t disappoint, as the global markets battled one financial dragon after another. From the Eurozone’s sovereign debt crisis to persistently high unemployment in the U.S. and a mayday call from many who worried that China’s growth rate was headed for a “hard landing,” 2012 certainly was interesting. As we turn the calendar page to 2013, the Eurozone seems to be in less-critical condition and China’s economic growth still appears to be flying but as of this writing, the U.S. debt problems still haven’t been solved. From my vantage point, the uncertainties surrounding the U.S. economy may just be the tip of the iceberg, threatening the global economy in the coming year. Nevertheless, with every new dire warning of economic disaster the global equity markets generally continued to power away in 2012. Read more…
