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Post by Fearchar on Jul 22, 2022 12:53:34 GMT
I'm considering opening a position in Emerging markets. - Compelling Valuation
- Exceptionally Strong Dollar
- Ray Dalio has a position
As I understand it, Ray has 4.22% in VWO, his largest holding in Bridgewater Associates. So, not a huge commitment on his part. He also owns iShares emerging markets IEMG and EEM at 3.57% each along with BABA at 3.28%. So, total emerging markets is 14.64%. The rest of his portfolio looks like a select list of American companies with a tilt to value. hedgefollow.com/funds/Bridgewater+AssociatesRay makes a lot of Youtube videos, some of which I've watched. But I'll note that according to Hedge Follow, Ray has only 2 stars. So, perhaps it might be better to first figure out what the 5 star managers are buying.
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Post by Fearchar on Jul 22, 2022 13:27:54 GMT
Can almost answer my own question now.
As I pointed out, Ray is not a top Hedge Fund manager. After looking over several of the top funds, I noticed that none of them own ETFs.
Also, I wasn't able to find one that owned stock in emerging markets. Maybe there are some, but I couldn't find them.
One of the more compelling managers to me is Crosslink Capital.
Recent buys: WEAV COUP TWLO SHOP MTTR CRWD
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Post by Fearchar on Jul 22, 2022 13:29:26 GMT
Recent quotes:
WEAV $4.53 COUP $70.30 TWLO $92.45 SHOP $40.40 MTTR $4.44 CRWD $189.00
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Post by ECE Prof on Jul 22, 2022 14:08:11 GMT
I have owned VWO in the past. I bought it at $29+/sh and kept buying more even at higher prices. It went up to $47+/sh. I was happy. But, it came down to $36+/sh after a few years. Patience is a virtue in equities. But, it was too difficult to bear with the meager return of VWO over several years, and killed it. The same thing about VWOB (bond ETF) also. I never looked back again, ever. You could use as a trading vehicle, if you are good at as a market timer. I do not own any foreign stuff knowingly, but X-Ray says that I own a small % in foreign equities, and M* warns me that I am underweight in foreign equities. Who said that I should heed to M*? I simply don't.
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Post by chang on Jul 22, 2022 14:48:01 GMT
FWIW, I recently sold the last of my EM, replacing it with US-LCG. I have started to doubt whether "EM" even makes sense as an asset class. Almost every foreign fund owns some % of EM. Even an index fund like SCHY is 15% EM (I think, based on recollection ... correct me if I am wrong). I've lost faith that an EM fund makes sense to own. And I say that after having made a lot of money with MIAPX and MITEX. It's in the past now.....
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Post by Fearchar on Jul 22, 2022 15:18:02 GMT
Thank Chang; I really like the 5 year chart for MIAPX. MITEX isn't too bad either. They both peaked out in Feb 2021. Since then, huge correction and more recently some consolidation. Actually, they appear to be nearly the same fund. VWO peaked in June 2021 and hasn't exactly consolidated.
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Post by Fearchar on Jul 22, 2022 15:37:19 GMT
I like growth too, but one has to be careful to not over pay. The MIAPX and MITEX combo have a great record of growing book value. That's one of my favorite metrics as is earning growth, both historical and long term. Big question is do their higher growth rates justify the higher P/E multiples?
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Post by chang on Jul 22, 2022 15:51:56 GMT
Thank Chang; I really like the 5 year chart for MIAPX. MITEX isn't too bad either. They both peaked out in Feb 2021. Since then, huge correction and more recently some consolidation. Actually, they appear to be nearly the same fund. VWO peaked in June 2021 and hasn't exactly consolidated. View AttachmentView AttachmentView AttachmentUnfortunately I missed the Feb 2021 top, and gave back some of my gains. Still, I preserved most of the run-up. Interesting how similar the two charts are. They were actually quite different funds. MIAPX/MPACX is run by a Japanese guy and owns a big slug of midcaps and Japan healthcare companies. (Well, it used to back when I owned it.) I'm no longer interested, partly because my dislike of Matthews continued to grow in recent years, and also because I did a sinoectomy of my portfolio, and haven't changed my mind about that.
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Post by Fearchar on Jul 22, 2022 16:03:50 GMT
So, when I run the numbers, projecting earnings yield into the future by assuming sales growth as the best estimate of future growth of earnings I find that MIAPX and MITEX are still pricey. VWO really isn't that bad, but it's behind my current value fund VFMFX. SCHY has the super high dividends, but growth wise, it's lacking.
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Post by Fearchar on Jul 22, 2022 16:06:03 GMT
Of course, earnings are not the whole story.
There is also the potential for multiples expansion.
Most of our correction here is compression of multiples. Earnings haven't really suffered all that much and I guess long term rates should fall and multiples grow again.
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Post by bb2 on Jul 22, 2022 17:43:21 GMT
I did some work on MTTR, on the list of recent buys by Crosslink Capital that Fearchar posted. Josh Brown recommended it around 16 I think, went to 35 and now 4. Josh, who's held, says he "believes in what they're doing". Losing money, as far as I can tell. Lots of competition. They're trying to break into China; I did a search and there are hundreds of tech companies doing virtual building walkthroughs in China. Here in the US, MTTR might have the top spot but this is a biz that, IMHO, has no moat, can't make money as of yet. They have a couple big contracts with real estate companies but I don't know if they're making money from them. Went public Q3, 2020. Flat sales. Decreasing gross. Costs rising but that could be a good thing if the investments pay off. So, not sure what Crosslink or Downtown Josh Brown sees in the name, not that at $4 it's not a spec buy. I assume these guys know more than I do. Watching. Housing is slowing. Recession - this seems like it'll get hit in a real estate slowdown. Far as I can tell, employee count went way up and is now down, like 50% but this could be very wrong. (10-400-200) Hard to find good up to date head count data. Not like you can go to Sunnyvale and watch the parking lot, since everyone's remote these days.
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Post by Fearchar on Jul 22, 2022 18:31:59 GMT
bb2 , Yes; Crosslink Capital is a 4+ Star Hedge Fund, but he still lost 10% in the 1st Qtr. His 3 year performance is +144.7%. Apparently, a lot Hedge Funds are getting hammered! MTTR is a recent purchase, but only 0.6% of his port. Karthik Sarma Stocks Portfolio might be a better one to follow. He was up 0.71% 1st Qtr. His recent major purchases: META $169.32 SHOP $37.11 PINS $18.01 ETSY $96.88 TWTR $39.87
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Post by bb2 on Jul 22, 2022 21:41:45 GMT
Fearchar - 3/5 social media stocks. Interesting. After the SNAP call yesterday, maybe not a great place to be at the moment. I need to look into SHOP. If there's a recession coming though, not much there looks attractive.
I'll check out ETSY too. My wife bought a cat bed on ETSY that took 3 months to arrive, from some eastern european country, I think. $100. I found one just like it on Amazon for $25, next day delivery.
I just looked Sarma up and looks like he's 60% into AVIS, (CAR)? That's a big bet. Hope he knows what he's doing. Rental car companies have been too crazy for me. Can't figure them out or better stated, have not even tried really. Fooled around with Hertz some years back on a whim. Volatile. Guess they get good deals on new cars and rental fees are high. A buddy paid 3500 for one not long ago, for a week. It was a van or big SUV, I think.
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Post by Fearchar on Jul 22, 2022 23:34:49 GMT
Yeah; Sarma! He's managing 9 billion dollars and 5.37 billion of that is in CAR. It's not a recent purchase though. Looks like he's had the same amount since at least the 1st Qtr of 2021, when CAR was at ~$60. So, wise move. But I would think he is probably exiting by now. Even if he hasn't he's up over 100% since then.
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Post by steadyeddy on Jul 24, 2022 14:15:54 GMT
I'm considering opening a position in Emerging markets. - Compelling Valuation
- Exceptionally Strong Dollar
- Ray Dalio has a position
As I understand it, Ray has 4.22% in VWO, his largest holding in Bridgewater Associates. So, not a huge commitment on his part. He also owns iShares emerging markets IEMG and EEM at 3.57% each along with BABA at 3.28%. So, total emerging markets is 14.64%. The rest of his portfolio looks like a select list of American companies with a tilt to value. hedgefollow.com/funds/Bridgewater+AssociatesRay makes a lot of Youtube videos, some of which I've watched. But I'll note that according to Hedge Follow, Ray has only 2 stars. So, perhaps it might be better to first figure out what the 5 star managers are buying. About 30% S&P 500 revenues come from xUS... and I suppose a portion of that is from EM. For me, that is adequate. I have cleared out most of my EM exposure.
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Post by ECE Prof on Jul 24, 2022 16:01:11 GMT
"About 30% S&P 500 revenues come from xUS"
Jack Bogle said the same thing, and therefore, you don't need EM per se to get the growth from EM countries. So, you do not need to own EM stocks/Funds/ETFs because they are controlled by their governments and their rules. That is the problem. By the way, the so-called EM is a misnomer now. Two of the three largest economies, called "EM economies" That is a stupid term, because their GDPs have passed the "so-called Advanced Economies." Even Chairman Powell said, "It is a different world."
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Post by FD1000 on Jul 26, 2022 22:18:54 GMT
We have a forum dedicated to international. The EM question have been raised several times annually for years and it's basically goes like this: valuation looks good, diversification makes sense, billions of people reside in these countries, US stocks as a % of total must shrink based on that. The facts are: Valuations are not an accurate indicator and never will be one, especially predicting next 1-3-12-24 months ahead. At some point, valuation matter, but people forget that markets are quicker now. American top tech can lose steam any time...mmm...wait...they actually did, and now may make sense again. Volatility: Most investor sprefer stable INDEXES with reasonable risk-adjusted performance and they are American indexes. US stocks actually increase their share of the global stock indexes.EM: if you buy a typical index(VWO), China is the biggest %, do you want China based on dictatorship? Others claim that these countries have better possibilities, they somehow forget these countries are also a mess in several parts (think India, Brazil, Saudi Arabia, South Africa, Mexico. These countries are in the top 10). So now you start thinking and analyzing what EM I want. You probably end up with managed funds and you depend on their manager + you pay much higher ER than the SP500. Good old USA: Ruthless capitalism and American ingenuity still works, it's not perfect but still the best. Revenues: the SP500 gets 40% of its revenues from abroad and QQQ gets 50% from abroad. Other options: before you jump to EM why not stay at home and look for other categories? Maybe SC? Maybe XLV(health care)? VALUATION is really cheap with PE about 7. Sure, I can mention valuation too Diversification sometimes lower your portfolio performance and increase volatility. Maybe over 30-50 years it works but not necessary within 10 years. 2000-2010: the SP500 lost money. 2010-2020: SP500 was one of the best. So, why think 10 years from now...which country and stocks market (think simple ETF) have the best chance to have the best risk-adjusted performance in the next 1-2 years? I'm still coming up with USA. Lastly, I'm glad we don't discuss Europe anymore, Europe is losing its edge for years already and why you can't find any European company in the top global tech by revenue( link). I just wanted to be fair and used revenues. Just think how sad it is.
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Post by Chahta on Jul 27, 2022 12:23:22 GMT
“Lastly, I'm glad we don't discuss Europe anymore, Europe is losing its edge for years already and why you can't find any European company in the top global tech by revenue(link). I just wanted to be fair and used revenues. Just think how sad it is.”
What is really sad is there are some in this country that look up to Europe and want to be like them.
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Post by Deleted on Jul 27, 2022 12:23:34 GMT
There is literally blood in the streets in EM. That was Nathan Rothschild's buy signal.
Am I the only contrarian left on the forum?
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Post by Norbert on Jul 27, 2022 12:43:17 GMT
“Lastly, I'm glad we don't discuss Europe anymore, Europe is losing its edge for years already and why you can't find any European company in the top global tech by revenue(link). I just wanted to be fair and used revenues. Just think how sad it is.” What is really sad is there are some in this country that look up to Europe and want to be like them. I wouldn't lump all European countries together. The Scandinavian nations plus Switzerland now rank higher than the US in the WEF Global Competitiveness survey. en.wikipedia.org/wiki/Global_Competitiveness_ReportSadly, the US was ranked #2 in 2019. I'll leave it to others to speculate about the reasons for the decline.
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Post by FD1000 on Jul 27, 2022 16:31:35 GMT
“Lastly, I'm glad we don't discuss Europe anymore, Europe is losing its edge for years already and why you can't find any European company in the top global tech by revenue(link). I just wanted to be fair and used revenues. Just think how sad it is.” What is really sad is there are some in this country that look up to Europe and want to be like them. I wouldn't lump all European countries together. The Scandinavian nations plus Switzerland now rank higher than the US in the WEF Global Competitiveness survey. en.wikipedia.org/wiki/Global_Competitiveness_ReportSadly, the US was ranked #2 in 2019. I'll leave it to others to speculate about the reasons for the decline. This ranking is more about quality of life. I care about stock performance, and that comes from innovation and capitalism. So, even if these countries will have successful companies, they will probably get bought. It's from my decades of experience in IT. American companies bought many Israeli innovations. So, follow the money==> USA I never cared how I make money and why I don't pay attention when I invest to human rights, ESG and all the rest. BTW, R48 is right, flexibility is the key. If EM shows better performance, why not. In 2000-2010 I owned SC, value, finance (FAIRX) and international (SGIIX). If you have 5% in EM, it's insignificant. I hardly ever own anything less than 15-20%.
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Post by FD1000 on Jul 27, 2022 17:00:26 GMT
There is literally blood in the streets in EM. That was Nathan Rothschild's buy signal. Am I the only contrarian left on the forum? I never play contrarian, I play stabilization and uptrend. Value was better than growth in 2022, but several weeks ago growth is doing better, I don't need to guess bottom, I just follow market in real time...and EM trend is down. Attachments:
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Post by chang on Jul 27, 2022 17:14:00 GMT
Lastly, I'm glad we don't discuss Europe anymore, Europe is losing its edge for years already and why you can't find any European company in the top global tech by revenue( link). I just wanted to be fair and used revenues. Just think how sad it is. This is an over-generalization. I agree that one should forget about European tech. In fact, I would forget about technology everywhere outside the US*. The US simply owns global technological innovation. (*With the exception of Israel.) However, Europe has some superb pharma, consumer and other companies. I recently started building a European portfolio; I have bought Nestle, Novartis, Roche, Sanofi, Shell, Total, Rio Tinto, ING Groep and UBS. Waiting to buy Novo Nordisk, Equinor, and Unilever. Might consider a few others. These are world class companies in terms of financial strength, branding, moat, profitability, stability and dividends. Obviously I am focused on low-beta, proitable behemoths that pay dividends, not high-growth companies. In this space, I think there are some very good Euro opportunities (especially paying with US Dollars right now).
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Post by Deleted on Jul 27, 2022 17:35:37 GMT
The more I hear international being labeled as a throwaway from a portfolio, the more interesting I find it. Past performance is not an indicator of future performance. Universally accepted the US leads in tech. Diversification is like insurance - very useful when you need it. Very true that one will get developed international exposure from multis. We are seeing the fx effects right now on US based ones. Bottom line - no one knows what the next decade brings. If you want to jump in and out and not build and compound - that can be done.
Emerging markets - yup - China has been an issue. Will it continue to be? No one knows. Allocate accordingly. If that is 0 - cool. If it is 20% of overall international exposure - also cool. Nothing new here.
Edit - International exposure in a portfolio is, like any allocation decision, based on the individual and circumstances. Emerging has shown us some pretty good reasons to tread carefully - particularly if the individual's focus is short term - less than 10 years. I have not had great results with it, but still have it in my portfolio for the long term.
Chang - I also have my share of European multis. In emerging, the one stock I hold is TSM and I add on any weakness. Would be interested in others' ideas on individual emerging market stocks.
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Post by FD1000 on Jul 27, 2022 18:30:39 GMT
Buying single stocks is another game. Talk to me about funds/ETF.
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Post by richardsok on Jul 27, 2022 19:12:01 GMT
One thing I like about lurking here is that you guys do have yr way of calling attention to areas I'd long forgotten about. Haven't considered EM since, well, I dunno. But a quick run-down of a few ETFs are interesting. Not crazy about VWO and its big China & sm cap exposure. But I do see really interesting charts and technicals with EMXC, DVYE and DEM -- with the latter two yielding about 8% in dividends. Who's a-thunk it?
EWZ appears promising as well, both its current valuation and evident rally off its recent floor. One can't depend on its payouts year to year, of course, but distributions have certainly been strong. Little late in the day for some buying, but might take a position tomorrow.
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Post by ECE Prof on Jul 27, 2022 19:49:56 GMT
One thing I like about lurking here is that you guys do have yr way of calling attention to areas I'd long forgotten about. Haven't considered EM since, well, I dunno. But a quick run-down of a few ETFs are interesting. Not crazy about VWO and its big China & sm cap exposure. But I do see really interesting charts and technicals with EMXC, DVYE and DEM -- with the latter two yielding about 8% in dividends. Who's a-thunk it? EWZ appears promising as well, both its current valuation and evident rally off its recent floor. One can't depend on its payouts year to year, of course, but distributions have certainly been strong. Little late in the day for some buying, but might take a position tomorrow. M* analysts have not covered DVYE, and it has under performed big time. It has 1* rating. M* analyst has covered DEM and has assigned 3* for a 10-year. It has underperformed by 2.6%/year below the Emerging Market Index with a current 7.73% (TTM). M* says that DEM will not be covered by M* after November 2022. EWZ is Brazil fund. In any case, I'm not going there anyway.
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Post by richardsok on Jul 27, 2022 20:42:59 GMT
One thing I like about lurking here is that you guys do have yr way of calling attention to areas I'd long forgotten about. Haven't considered EM since, well, I dunno. But a quick run-down of a few ETFs are interesting. Not crazy about VWO and its big China & sm cap exposure. But I do see really interesting charts and technicals with EMXC, DVYE and DEM -- with the latter two yielding about 8% in dividends. Who's a-thunk it? EWZ appears promising as well, both its current valuation and evident rally off its recent floor. One can't depend on its payouts year to year, of course, but distributions have certainly been strong. Little late in the day for some buying, but might take a position tomorrow. M* analysts have not covered DVYE, and it has under performed big time. It has 1* rating. M* analyst has covered DEM and has assigned 3* for a 10-year. It has underperformed by 2.6%/year below the Emerging Market Index with a current 7.73% (TTM). M* says that DEM will not be covered by M* after November 2022. EWZ is Brazil fund. In any case, I'm not going there anyway. Read the post, ECE. I'm not talking about past performance. Not suggesting EM ETFs should have been bought six months ago. I am addressing the possibility of buying NOW..... now that they are thoroughly beaten down, paying good yields and possibly recovering from their recent and evidently extreme lows. Might they go lower? Certainly --- but charts and payouts could be promising down here in the basement. How does the ol' saying go? "Buy low... yada yada...." Something like that.
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Post by ECE Prof on Jul 27, 2022 22:14:28 GMT
I would not touch any of them even with a ten-foot pole based on the long term performance reported by M* and its analyst. M* research does not even want to cover them anymore should raise alarm bells. How does that sound?
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Post by retiredat48 on Jul 27, 2022 22:47:54 GMT
I would not touch any of them even with a ten-foot pole based on the long term performance reported by M* and its analyst. M* research does not even want to cover them anymore should raise alarm bells. How does that sound? Sounds like music to my ears...when large groups give up on a sector or investment space, time to follow closely! Just like I am following marijuana stock ETF MJ very, very closely as it now has a five handle...formerly $32+ dollars per share. I know I will own some, someday. R48
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