Taps Coogan – March 14th, 2022

Mark Mobius, Mobius Capital Partners founder, legendary emerging markets pioneer, and Sir John Templeton acolyte, recently spoke with the Business Standard about his outlook for global markets in light of the war in Ukraine, which he expects to be long and drawn out, but not necessarily bearish for US and emerging market equities.

 

Mark Mobius on the Ukraine war:

“I think what we are probably going to be looking at is a long drawn out situation and war in Ukraine. It doesn’t look like Putin will give up easily and of course the Ukrainians are not going to give up easily and more importantly, the Europeans and the international community generally are in support of the Ukrainians and they are going to try their best to support the Ukrainians, which will make things much more difficult for the Russians. I think we are looking at a drawn out situation which makes Europe look somewhat dangerous, let’s say, and makes other countries around the world much more attractive… I think the other markets outside of Europe will do well because they are safe heavens. I think the US Equity market, the Brazilian market, South Africa, China, Taiwan, all these countries that are not involved in this European situation… Indian markets should do well…”

On rising interest rates:

“The only hiccup and problem facing markets around the world is the fear of higher interest rates, but this is a very temporary fear because as we look at history, you see that interest rates actually do really have that big of an impact on stock markets. They have a big impact on the fixed income markets but not the equity markets…”

On gold versus equities:

“I always believe that people should have physical gold but the big winner is always equities. The reason why is that equities adjust to inflation. They adjust their prices inline with inflation… Companies that are profitable, that are able to raise their prices inline with inflation should do very very well…”

On monetary policy:

“I think central banks realize that they made a big mistake in lowering rates to such a low, low level and now they’re trying to catch up… Of course the complications of the Ukraine war may cause them to slow down their rates hikes… but you’re going to see rates go higher.”

There is much more to the interview, so enjoy it above.