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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Lee Lichterman III who wrote (4919)	10/21/2001 12:35:35 PM
From: John Pitera	Read Replies (2) \| Respond to of 33421

Thanks for the pm mentioning TCH, you got me off on a rant on another thread on the emerging market experience of the early 90's.... here it is ..... It's interesting to see how Investment perceptions and outlooks change over time, both in regards to a specific stock; and entire market sectors. This extends also to Investing in Different Parts of the World and in different asset classes. I was just talking with Lee- L3 about Mark Mobius's Templeton China Fund (TCH) and I was noticing that since 1994, it's down from $20 to $7 today. I then glanced at SGF. The Singapore Investment Fund (SGF) also made it's all-time high in 1994 at $26 and is currently at $4.50 It reminded me of how eager Investors were to Invest in the Emerging Markets, especially the NIC's (Newly Industrialized Nations) of the Pacific Rim back in the late 1980's and the Early 1990's. Many will remember that both Japan and the Emerging Pac-Rim countries were thought to be driving the American business model out of business due to lack of U S companies to compete, in Global markets. Indeed, Harvard University, IBM, Exxon, GE and many other companies all had programs and seminars to study Japanese Management Skills, then thought to be vastly superior the US models. The Japanese Nikkei 225 average was at 7000 and change in 1982,but had climbed to 39,300 by dec 31st of 1989. No wonder almost everyone thought that the Japanese were going to take over the world, economically speaking. lowrisk.com "The Roaring 80's" by George Goodman, who writes under the nom de plume of Adam Smith, is excellent in capturing the dominant investment and economic - competitiveness thinking that existed back at the cusp of 1990's. In this 1989 book, Goodman outlines the vibrant economies of the Pac-Rim and pointed out that the issue was being raised, whether America would continue to be the significant economic force it had been in the Post World War II years. The Trading history of the Korea Fund (KF) illustrates the Investment boom years advancing from $4 in 1986 all the way to $40 in 1989. Then as the speculative era in the Pac Rim stocks unwound the price fell all the way to $6 in 1997, and is still under $10 today. The Japanese Bubble Burst in 1990 and the Global Flow of Funds began to shift in the early 1990's. European and especially the US Equity markets became increasingly attractive on a Global relative basis. The Emerging Market stocks hit a secondary peak in 1994, and then really fell of of a cliff starting in 1995. Obviously Investors had found Happier Hunting Grounds for their Global Equity Investments; and it's no coincidence at all that, the US StockMarket really began an acceleration of it's Multi-Year Bull Market in 1995.

To: Lee Lichterman III who wrote (4919)	10/21/2001 2:42:40 PM
From: John Pitera	Respond to of 33421

TCH-- The Templeton China fund... it's a closed end fund, and I notice that it's trading at a discount to Net Asset value of 21%, which on the margin, makes it a bit better valued. I also find that often when these closed end funds are trading at 15% or 20% discount, it's because the sector is out of favor, but the returns going forward can often be better. I know when these closed end funds are selling for 20% premiums to NAV, it's because the country or sector is the flavor of the year and investors are bidding up prices to high. When those euphoria's subside, you tend to see a good period of underperformance. closed-endfunds.com Templeton China World Fund is a non-diversified, closed-end management investment company. The investment objective of the Fund is long-term capital appreciation. The Fund seeks to achieve its objective by investing primarily in equity securities of Chinese companies. At least 65% of the Fund's total assets will be invested in equity securities of Chinese companies. The Fund intends to invest its assets over a broad spectrum of the economies of China, Hong Kong and Taiwan. Up to 35% of assets may be invested in non-Chinese companies that are expected to benefit from economic developments in China. The Fund may invest up to 20% of assets in debt securities of Chinese companies. The Fund may engage in hedging transactions to protect its portfolio from risk. Premium / Discount as of 9/30/2001 MARKET PRICE NAV YTD: 1.46% -5.64% 1 yr: -2.22% -13.37% 5 yr: -4.57% -3.83% 10 yr: % % Since Inception: N/A N/A Current (as of 10/18/2001): -21.08% YTD Min: -22.19% YTD Max: -16.21% YTD Avg: -19.06% 5-yr Avg: -21.04% 10-yr Avg: % PS. that site is not bad for closed end fund news closed-endfunds.com