A Quote by Robert D. Arnott
Diversify. But carve out 10 to 20 percent for the most unloved part of the market: emerging markets value.
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My view is that the U.S. market will eventually join the emerging markets on the downside because if you take a bearish view about emerging economies, you cannot be too optimistic about the U.S. because for many U.S. corporations, 50 percent or more of their profits come from emerging economies.
[When] the market is trying to get to terms with, first, lower global growth, particularly out of emerging markets and China. And, second, the market is worried the central banks have run out of ammunition. So put these two things together, and then investors are repricing the market lower.
Analysts estimate that emerging markets are expected to drive 90 percent of the world's pharmaceutical market growth, and differentiated products will be important to this growth.
In the financial markets, hindsight is forever 20/20, but foresight is legally blind. And thus, for most investors, market timing is a practical and emotional impossibility.
To invest successfully, you need not understand beta, efficient markets, modern portfolio theory, option pricing or emerging markets. You may, in fact, be better off knowing nothing of these. That, of course, is not the prevailing view at most business schools, whose finance curriculum tends to be dominated by such subjects. In our view, though, investment students need only two well-taught courses - How to Value a Business, and How to Think About Market Prices.
I don't think the market can keep going up. In the U.S., we see real estate not going up.. houses are selling at lower prices. You can't have anything going up 10 percent to 20 percent to 30 percent indefinitely.
I'm still very bullish on emerging markets. There's an emerging middle class. They're a growing group of customers. And frankly, they want Walmart. They want everyday low price. And that's why we are continuing to grow in the emerging markets around the world, too.
Economists often talk about the 80/20 Principle, which is the idea that in any situation roughly 80 percent of the “work” will be done by 20 percent of the participants. In most societies, 20 percent of criminals commit 80 percent of crimes. Twenty percent of motorists cause 80 percent of all accidents. Twenty percent of beer drinkers drink 80 percent of all beer. When it comes to epidemics, though, this disproportionality becomes even more extreme: a tiny percentage of people do the majority of the work.
I've long loved emerging markets airlines because they usually sell at bargain prices. The troubled history of developed market airlines unfairly taints these stocks. In the emerging world, they're growth stocks.
Market value is irrelevant to intrinsic value. ... Unqualified judgment can at most claim to decide the market-value - a value that can be in inverse proportion to the intrinsic value.
Now, the impact on export markets - we export about 10 percent of what we produce, so obviously that will probably have some impact on the market. At this point it's too early to determine how much.
If unemployment could be brought down to say 2 percent at the cost of an assured steady rate of inflation of 10 percent per year, or even 20 percent, this would be a good bargain.
Historically, we have always seen reversion to the mean. After stocks have had an unusually great 10 or 20 years, they typically turn in subpar results over the next 10 or 20, and after bad 10- to 20-year stretches, the next 10 to 20 tend to be above average.
In the late 1980s the amount of German films was down to four or five percent of the market, and the remaining 95 percent were American. It is now 20 to 30 percent German productions.
In emerging markets, slow growth in the advanced economies has shut down a traditional development path: export-led growth. As a result, emerging markets have had to rely once again on domestic demand. This is always a difficult task, given the temptation to over-stimulate.
If you work at a 10,000-person company, and you're using e-mail as the primary means of communication, then you probably have access to a couple hundredths of 1 percent of all the communications happening across the company. But if you use Slack, you might have access to 10 or 20 percent.
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