How Value Markets can be Found

by | Aug 15, 2002 | Archives

Recent messages have looked at many ways to invest in stock markets during these troubled times. One way is to look for markets that offer the best value. One reader wanted to know more and wrote this request.

Dear Gary, When you have a moment could you please clarify this for me? When yousay: "Here are Keppler's Major Market ratings: Buy: Austria, Belgium, Germany, Hong Kong, Norway. Neutral: Australia, Italy, Singapore, Spain, United Kingdom Sell: Canada, Denmark, France, Japan, Netherlands, Sweden, Switzerland, U.S.A." Are you talking about the currencies of these countries? Thank you and I enjoy your letters very much and hope to soon become a member. JM.Rather than explain this I decided to get the answer from the horse's mouth and asked eClub - see - Michael Keppler to explain.

Here is his answer:

When we say a market/country is attractive, we base our decision on an analysis of the respective Morgan Stanley Capital International (MSCI) national country index.

For example MSCI US Index, is very similar to the S&P 500 Index. All these indices are market capital weighted stock indices.

So if we say that Austria is a good value market, we mean that the MSCI Austria Index indicates that this market is selling at levels lower relative to its norm. The recommended investment in this case would be the MSCI Austria index linked share ora similar portfolio of Austrian stocks. As an investor of MSCU Austria you would have both currency (in this case Euro) plus the stock market risk and opportunity of this country.

An easy way to invest in all the top value markets is to invest in the Major Markets HighValue subfund of the Global Advantage Funds, managed by State Street Trust. This fund invests in the top value funds I recommend and is the top performing global equity fund over the past three years (up 35 % versus a loss of 15 % for the average fund).

Michael has just published his top value updates and the top value major markets now remain, Austria, Belgium, Germany, Hong Kong and Norway. The top value emerging markets are Brazil, Czech Republic, Egypt, Korea and Philippines.