Tuesday, December 29, 2009

Emerging Markets


The Emerging Markets stocks have seen 80B  flow into them, 60B of this is the BRIC countries, which is Brazil, Russia, India, China.   Maybe this BRIC abbreviation is more than just a cute marketing ploy.   Maybe these countries actually have raw materials and make products that people want to buy....hmmmm, thats so old school.

They haven't yet learned that financial gimmicks is all you need for success..... j/k

Bottom line....the emerging markets could blow up quicker and deeper than the US equity markets.

ADR's effectively give you benefit of currency play.  If you are short ADR's and USD goes up while flight to safety occurs, and money runs from EM stocks...you could make good money.

This chart shows, from a previous post, shows how money is flowing into foreign equities, not necessarily the BRIC ones though.  This shows about $60B flowing just from mutual funds into foreign equities.

Putting some shorts on the Nikkei could be a decent diversification also.  Futures /NKD has been rocketing up.  God save you if you were short that and left on a 10 day vacation!  This one gaps all over the place.

And Junk JNK took a dive today.   Certainly a possible sign of a change of tide.

Over and Out....remember HBB never sleeps!

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