Taps Coogan – November 27th, 2021

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Mark Mobius, Mobius Capital Partners founder and legendary emerging markets pioneer, who also was one of the only high profile investors to go on the record as unambiguously bullish near the Covid lows during May of last year, recently spoke with CNBC to share his views on emerging markets.

 

On the recent tech selloff and focusing on companies that make money:

“If you look at where the damage is, you’ll see that it’s mostly in companies that don’t make money. Companies like Gamestop Opendoor, Rocket Labs, companies like that are not earning… So what we are going to do, in emerging markets, is focus on companies that have good cash flow, good margins, and they’re still going to continue to do well…”

Contrasting the performance in China versus India and Taiwan, Mr. Mobius notes:

“Our two (top) countries are Taiwan and India… The strange thing is you see China going down since February about… 32%, whereas India is up something like 17%-18%. So, we’ve really got to differentiate where we are looking and what companies we are going to operate in.”

On the impact of the Fed tapering QE:

“It will have a negative impact everywhere. There is generally a feeling that once interest rates rise, you’ve got problems, but the good news is that companies in a really good earnings position with good margins, even a higher interest rate environment will do well. If you look at the history of earnings and the history of market, you will see that higher interest rates don’t necessarily mean a big downturn in the markets.” 

For what it’s worth, Mr. Mobius, who was once a longtime China bull, seems to have moved his focus on to greener pastures.

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