Emerging Market Investors

[Gold Pile]

They've been referred to by ever changing names. Primitive, backward, undeveloped, under developed, 3rd world, emerging markets. The West starting investing in these areas. By the 1980's they started getting burned by these people. Much of the 3rd world nationalized industries that investors built. They stopped paying their loans. With some exception they didn't run the stolen businesses well. They naturally wanted more loans. Of course investors wouldn't invest in people who burned them. So the (then called) 3rd world started lobbying for debt forgiveness. They got it.

But the memory of getting burned was still a recent one. Westerners knew better than to invest there again. So time had to pass and the name had to change. They were repackaged as Emerging Markets. Investing legends like Warren Buffet and Jack Boggle have long urged investors to stick with mostly American stocks. But a new generation of naïve westerners started chasing the high yields in the emerging markets. A few good years of this and they started scoffing at the older generation (Buffet and Boggle). Very soon they will see what it feels like to get burned. Historically when the going gets tuff, the (formerly called) 3rd world defaults and nationalizes. 

Down the road the term Emerging markets will be declared offensive as it seems to refer to these people in strictly financial terms. They are of course so much more than dollar signs. A new term  will be hatched. A few years will pass. A new crop of investors will invest in this "new" opportunity. The circle continues

Edited April 1, 2020 by Gold Pile

[OpenBook]

I'm with Buffett & Bogle. (I didn't know they urged investors to stay in America, but I agree with them!) Not because I know a lot about emerging markets (I don't)… but because of what happened after the financial meltdown in the Great Recession. I watched the stock market intensely during those days, and realized that whatever the US market did, the other markets soon followed.

Another reason I don't invest overseas - unforeseen geopolitical circumstances that have nothing to do with America.

It's just too dang risky, and too far away from home.

Whoever gave the advice "If you don't understand what you're investing in, don't invest in it" (I think it was Benjamin Graham) is like the smartest thing you can do with your own Gold Pile.

But the circle continues indeed. That reminds me how Alan Greenspan warned after the Great Recession that it will happen again... sometime in the future after memories have faded.

[simpycurious]

12 hours ago, OpenBook said:

I'm with Buffett & Bogle. (I didn't know they urged investors to stay in America, but I agree with them!) Not because I know a lot about emerging markets (I don't)… but because of what happened after the financial meltdown in the Great Recession. I watched the stock market intensely during those days, and realized that whatever the US market did, the other markets soon followed.

Another reason I don't invest overseas - unforeseen geopolitical circumstances that have nothing to do with America.

It's just too dang risky, and too far away from home.

Whoever gave the advice "If you don't understand what you're investing in, don't invest in it" (I think it was Benjamin Graham) is like the smartest thing you can do with your own Gold Pile.

But the circle continues indeed. That reminds me how Alan Greenspan warned after the Great Recession that it will happen again... sometime in the future after memories have faded.

Open, that's because the American Market is the standard bearer for all practical purposes.  Downturns are inevitable and if you look at history it will tell you just that.  We are in the process of shifting assets and fully believe "generational wealth" will be created once some sort of stable footing is found.  Things right now are so emotionally driven and frankly IRRATIONAL. 

Overseas investing is RISKY and always has been but GREAT PROFIT taking is attainable if you are crafty enough. Enjoy the Ride

[simpycurious]

I would also add that paying PARTICULAR attention to where the money starts going over the next few months will be TELLING.