In investing in emerging markets I have tried to follow John Templeton's advice to "buy when there is blood in the streets." There is definitely blood flowing in South Korea, Indonesia and others now. I feel strongly we are beginning a historic buying opportunity in these markets. Buying into such situations to me goes hand in hand with shorting the high fliers. I sold all my emerging market positions last summer but have buying the past week. Currently have 2 percent of assets in EMs, plan to go to 5 over next several weeks. Here's what I'm buying:
MALAYSIA, SINGAPORE - WEBS are probably the best ways to play these countries - EWM, EWS
INDONESIA - was avoiding until today, but now market has totally capitulated - bought TLK ( at 5 5/8 down from 30 in August), considering GRL
INDIA - JFI, IFN
RUSSIA - RNE
HONG KONG/CHINA - Avoiding for now, I don't think we've seen the big break here yet, will buy TDF, TCH later
KOREA - difficult to play ( no WEBS, closed-end funds at 55 percent premium) have bought KF, PKX and waiting for closed-end premium to narrow.
MULTI-COUNTRY - Several asian closed-ends trade at discounts to NAV (GRR, APF, SAF). African and South American funds have also moved to large discounts (buying AFF, LAM)
If you want a short play in South Korea, I suggest shorting the closed-ends and buying a basket of SK stocks as the premium should eventually disappear.
August was the time to short Asia, now is the time to begin buying. |
