Emerging Market Value Analysis – August – September 2007

by | Oct 12, 2007 | Archives

Emerging markets generally fall fastest in times of turmoil.  Yet they are (and have been for the past decade) the fastest growing equity investment sector.  You can see how fast they can dip from the sudden drop in August.

From August 10 to 17, both the Swiss Samba (invested in Latin bonds and equities) and the Emerging market portfolios we track for educational purposes (invested in China , India , Eastern Europe, Asia and Turkey equities) dropped nearly 50% in one week!


Yet, can we afford not to hold such growth potential. From August 10 to September 9, both portfolios recovered.  The Emerging Market Portfolio more than doubled its value in less than a month!

Can we not take advantage of such upwards potential?  30.86 and 67.95% growth in ten months and nne days is phenomenal.

You can learn why this performance has taken place in a sixteen page email report about how 13 economic forces now clash to shape investments markets ahead that show the rewards and the risks.  The report also outlines the

five Multi-Currency Portfolios we are tracking in our Borrow Low-Deposit High Multi-Currency Sandwich Educational Service. Details are at https://garyascott.com/catalog/bldh

Because of this performance one of the largest financial publishers will shortly begin a cooperative plan to offer our Multi Currency Educational Service.  “ Gary , I have sent your promo out to a designer this week…we’re eager to market ASAP.  I’m waiting to hear back from our ops crew about how best to get you the orders.”

When they begin the subscription price will rise so the time to subscribe at the low, existing $149 price is nearly through.  To take advantage and save during these last days simply go to https://garyascott.com/catalog/bldh


The main reason these portfolios have performed is that we look first and foremost for value in our selection process. One way we keep track of value is to follow the analysis of our friend, Michael Keppler.

Michael continually researches international emerging stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and

cash flow return. He compares each emerging stock market’s history. From this he develops his Good Value Emerging Stock Market Strategy. His analysis is rational, mathematical and does not worry about short ups and downs.

He is, in my opinion, one of the best market statisticians in the world and numerous very large fund managers use his analysis to manage funds.  In January, his company, Keppler Asset Management, was, for the third

consecutive year, named Best Fund Company in the Fund Specialists’ category by Capital, a leading German business magazine. Keppler’s firm was one of only six out of 100 companies tested that received the highest five-star

rating based on an independent evaluation of fund quality, management, and customer service by Feri Rating & Research and Steria Mummert Consulting.

Once a month we share Michael’s emerging market analysis with you.

Here is a summary of Keppler’s current comments on recent developments &

outlook in international emerging equity markets.

Recent Developments & Outlook

After a quick sharp setback in August, Emerging Markets equities reached new all-time highs at the end of September. The underlying strength becomes most evident by looking at the equally weighted Emerging Markets Index, which — with the exception of August — has reached new all-time highs every month since October 2006.

Last month, the Morgan Stanley Capital International (MSCI) Emerging Markets Total Return Index advanced 34.5 % in dollars and 24.7 % in euros.

The strongest regional index was Latin America with a 12.5 % gain in September, followed by Asia, which gained 11% and Europe, Middle East and Africa (EMEA), which was up 8.3 % (performance numbers are in US dollars unless indicated otherwise).

Year-to-date, Asia (+40.8 %) is slightly ahead of Latin America (+40.6 %). EMEA returned 17.9 %.

Twenty-six markets advanced in September and two declined.

Brazil leads the winners’ list with a 20.1 % monthly gain. China , advancing 19.9 %, came in a close second, and India gained 16.8 %. Venezuela (-7.3 %), Sri Lanka (-4.5 %) and Chile (+0.5 %) finished last.

Year-to-date, twenty-seven markets are up and one market is down. Peru with a triple digit percentage

gain (+103.8 %) is the clear year-to-date winner. Other top performing markets include Turkey (+64.5 %) and Brazil (+58.6 %).

Sri Lanka, losing 17 %, was the only declining market.  Also underperforming year-to-date have been Jordan (+0.1 %) and Venezuela (+1.6 %).

There are no changes in our performance ratings this month. The Top Value Model Portfolio contains seven markets  Brazil , Korea , Malaysia , Poland , Taiwan , Thailand and Turkey — at equal weights.

According to our performance ratings, these markets offer the highest expectation of risk-adjusted returns.

SELL CANDIDATES (Low Value) Argentina , Egypt , India , Indonesia , Mexico , Morocco , Pakistan , Peru , South Africa .

NEUTRALLY RATED MARKETS Chile, China, Colombia, Czech Republic, Hungary, Israel, Jordan Philippines, Russia, Sri Lanka, Venezuela.

For more details on Keppler’s analysis, contact Roderick Cameron at

1-212-245-4304 or email roderick.cameron@kamny.com

You can get ideas on shares in these top value emerging stock markets from

Thomas Fischer at Jyske Bank at Fischer@jbpb.dk

Jyske Bank is the second largest Danish bank with 450,000 domestic clients, 35,000 international clients, USD 23 Billion in total assets, and a Moody’s rating of AA1.  Jyske has over 35 years’ specialization in private banking

and Denmark is ranked by Moody’s as the safest country in the world to have a bank account in. 

Jyske Bank uses a good value system as well and their affiliated fund management company has been rated #1 by Morningstar. They use this value system to help us select shares for Multi-Currency Portfolio Educational

Tracking Service.  This has worked pretty well. In 2006 the mainly equity portfolios we tracked rose 42.93% (Emerging Market) and 114.16% (Asia Emerging Market) in a year.

This year the five portfolios we track are up in the past eleven months:

Portfolios 2007 Mar 27 June 28 July 20 Aug 17 Sept 28 Oct 5
Swiss Samba 16.15% 44.80% 45.84% 15.19% 44.40% 47.94%
Emerging Market 12.81% 54.31% 67.67% 30.50%  103.22% 105.22%
Dollar Short 20.12% 33.81% 40.31% 9.14% 42.71% 42.06%
Dollar Neutral 16.58% 37.64% 38.07% 13.56% 34.74%  37.10%
Green 86.86% 178.28% 214.15% 110.93% 220.22% 236.47%

You can learn why this performance has taken place in a sixteen page email report about how 13 economic forces now clash to shape investments markets ahead that show the rewards and the risks.  The report also outlines the

five Multi-Currency Portfolios we are tracking in our Borrow Low-Deposit High Multi-Currency Sandwich Educational Service. Details are at https://garyascott.com/catalog/bldh

Low Subscription Update. There is one last chance to take advantage of the low subscription fee.  The publisher we are working with conducted its first test market and just wrote to me.

“ Gary , The price test at $249 didn’t win out.  We’d have to test it again to get a more conclusive result.”

This means that you can start your subscription at the low, existing $149 price only today.  To take advantage of this and save go to www.garyascott.com/catalog/bldh

Until next message, may all you global investments be good.


Join us at our Hotel Meson de las Flores for our next International Business & Investing Made EZ in Ecuador , November 9-10 and 11 where we will update our multi currency portfolios. https://garyascott.com/catalog/IBEZec/

I will conduct most of the November 9-10 and 11, 2007 course in Cotacachi but have also invited Peter Conradsen and  Henrik Villumsen from Jyske Bank to speak and be available for private consultations (no added cost).   Jyske Bank is one of the leading international investing and currency managers in the world. Their trading room process $50 billion of business a day. So this next course makes a huge amount of global investing information available to you.

Join us in Ecuador for all three of our November courses and save $398. See https://garyascott.com/catalog/ecuador-tours-november-2007

We hope to see you there.