Taps Coogan – September 3rd, 2020

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Back in May, we incredulously observed the closest thing to unanimous agreement among investors and economist that we had ever witnessed: the idea that markets would not stage a ‘V’ recovery.

While warning repeatedly that comparisons to the Financial Crisis were stretched, the only unambiguously bullish investor that we could find going on the record was emerging markets legend Marc Mobius, who declared all the way back on May 1st:

“Yes, these (market) recoveries will be sustained… there are always going to be corrections along the way, but I do believe we are at the cusp of another bull market going forward… I do believe that we have already witnessed the bottom… I think equities are very very important at this stage because of the incredible printing presses that are working overtime globally. So, you have to be in equities which will adjust to these changes in currency movements and the devaluations of currencies. I’ve always said you’ve got to have some gold… and I think you’ve just got to be very, very cautious in the fixed income arena…”

Now that markets and gold have rallied relentlessly for several months, what is Mr. Mobius thinking? Speaking with ET Now, he says he is still looking for bargains, though valuations are “out the window,” comparing it to the 1999 and 2000 tech bubble, and cautioning people to look for earnings, dividends, return on capital, and good governance.

With regard to the longer term outlook he notes:

“There is no question that there is a lot of complacency, particularly when stocks are being bought willy-nilly regardless of dividends and regardless of earnings… Of course, a lot of people expect this money printing to go on, and on, and on, but eventually it will stop and when that happens, people are going to have to run for cover…”

He notes that, geographically, India is his largest exposure and that he remains bullish on emerging markets generally.

Enjoy the full interview below:

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