Tag Archives: Emerging Markets

Q 4 2017 Newsletter Video Audio Podcast Review By John Kvale

Welcome to our Video and Audio Podcast Review of our Q 4 2017 Newsletter. For those on the road or just unable to grab the time to read, our podcast type review gives you the behind the scenes insight to our thoughts, observations and deep views of the entire Newsletter.

Click here for direct link to an electronic version (an early peek-good ole fashion paper versions are on their way to you shortly) and here for our Newsletter page

Let’s get going!

Q 4 2017 Newsletter

International Market Analysis

In a quest for value, it may be appearing overseas with our friends across the pond. Our core article of the newsletter discusses P/E Price Earnings along with the more smoothed CAPE or cyclically adjusted price earnings which is just a 10 year average ratio. With multiple looks at a long awaited possible long term positive trend, the next 3-5 years may be in the corner of  our overseas friends.

Tripit our App of the Quarter

After stumbling upon a neat app from a dear friend, “Tripit” makes our app of the quarter. Bet you have no idea just how many different reward programs you are involved … after loading them into our app of the quarter, your life will be easier.  Constant price reviews after the purchase along with multiple handy reminders may make this a fun – non financial review and item for you to try out this quarter.

Equifax Update and To Do’s

Our most popular posts on street-cents.com our blog, was the discussion of the Equifax breach. Our theme “Chillax” if our information had not been comprised before, it will eventually. The best defense in this case is an offensive preparation, BEFORE the next breach.

Break In: Yahoo announce after our discussion much more information had been compromised than originally thought …

Not IF, but WHEN our information is compromised …

1 Minute Video Reviews and Screen Shots

With tons of fun and compliments, our half dozen set of 1 minute video’s also make the Newsletter. If you like to talk like I do, full appreciation for just how hard it is to make a 1 Minute video… haha

Here is a link to our 1 Minute Video Page on our Website

Here is a link to all the Videos here on our blog

Parting Thoughts

Shhhh, we have a secret that we want to tell, but are forbidden for a couple of more weeks. We will only say it is an honor!

Watch for a reminder of our hopefully awesome Saturday Before Thanksgiving-Early November 18 Holiday Party at the Dallas Arboretum from 1-3 pm and free reign of the park until 5! Fun times !!!

Thanks for the time!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

China added to Important Index, Welcome Aboard!

Last week it was announced a group of large capitalization Chinese company stocks were allowed to be added to a very important global index, the MSCI Emerging Market index. This is great news for China and super news for those following our David Cameron talks from earlier this year.

China added to MSCI Emerging Market IndexChina hainan-105596__340

The fourth time really is a charm, as MSCI (Morgan Stanley Capital International) – most prominent and well known International Index provider – allowed a group of over 200 stocks to EVENTUALLY be added to their MSCI Emerging Market Index. The total inclusion will take several years but is a huge positive for China’s acceptance as a valid economic capital market.

Certainly China has a different social system than the USA, however, if David Cameron is only half correct in his thoughts, embracing rather than shunning China will have positive effects for decades to come.  The addition of China stocks into the MSCI Index may be the first step of many future positive ones to come.

We began a detailed review in our latest Newsletter on International and Emerging Markets but it was shoved tot he floor by our Residential Real Estate Price Movement article.  Everything happens for a reason. This recent announcement is a great addition to the facts and research we were including, look for more abbreviated information to come soon here with the full article(s) to follow in our Next Newsletter!

Have a Great “Mutually Prosperous” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

Jeremy Siegel Talks Markets

 

At a recent CFA (Chartered Financial Analyst) Annual Forecast dinner, legendary Author, Investor and Professor, Jeremy Siegel chatted candidly with the audience.

Just by chance, recently he had a two hour podcast interview on Bloomberg’s Masters in Business.

Combining these two lengthy events, the following themes and forecasts (yep we will code this forecasts for future reference here in our digital diary) resonated:

  • Net real returns on stocks, netted out after inflation are about 6.5% over the long term – (Ok by us)
  • Siegel thinks the next 3-5 years will be a slightly lower 5-5.5% – again net of inflation
  • Inflation will not rise to the 2% target of the Federal Reserve (FED) due to deflationary forces – (We disagree)
  • QE (Quantitative easing) helped during the 07-09 crisis but has overstayed it’s welcome (We agree)
  • Emerging Markets (Young international country stocks) are poised to do much better over the next 5-10 years than many if not all capital markets (We 100% agree) – the trouble is when will they will finally get their feet under them from a timing standpoint according to Siegel (We totally agree again)
  • Increased regulations such as Dodd Frank have undermined productivity, leading to lower wage growth, investment and over all GDP (Ahh…this is so hard to measure, but seems like too much affect to us- we disagree)
  • Jeremy mentioned three times he was concerned with deflation over the next 1-2 years (Nah!)

We threw our thoughts in too … just for fun, and to also be held accountable.

We will check back in the future to see who got it correct !

Have a Great Day!

John A. Kvale CFA, CFP

http://www.jkinancialinc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225

 

 

Emerging Market Manager Thoughts … In the Air

As this post hits your in-box, I am in the sky to a coast line state for multiple business meetings for the remainder of the week.

Recently in our “Sipping from a Fire Hydrant Post” a lunch with three emerging market portfolio managers was discussed.

As a reminder, Emerging Markets are smaller, less mature countries that MAY be in growth mode … think Brazil, Russia, India and China aka The BRIC’s (Examples, not recommendations … must pick carefully)

Emerging Market Portfolio Manager Thoughts

Research Affiliates latest expected return … higher means better return, BUT farther right means more risk too … no free lunch!

6-8-15 Research Affiliates Expected Returns

  • More volatile than mature markets (this is obvious, but worth repeating)
  • Where the growth is looking into the future (think mature/USA markets 50-60 years ago)
  • Political stability is VERY important (bad policies can bankrupt a small country)
  • Hold off on investing in this category until rates in the USA start to rise (WHAT … See below!)

WOW… I saved the best for last, these guys make their living investing in emerging markets, and they all but said, hold off until rates rise as they were concerned on how their currencies would move as rates rise in the USA.

Sounds like an opportunity!

Will chat with you Friday from the Road

Have a Great Wednesday!

John A. Kvale CFA, CFP

http://www.jkfinancialinc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225

 

 

 

Sip from Fire Hydrant Meetings Updates …. A ton of Information

Last week, was a full week of discoveries. I had the opportunity to have lunch, visit, or listen to the following people:

  • Four Emerging Market Mutual Fund Managers
  • Cybercrime Research and Insurance Firm
  • Executive VP and CFO of Dallas Fort Worth Airport
  • Bond Fund Mutual Fund Portfolio Manager
  • Co-Founder and COO of a Multifamily Investment Firm based in DFW

Needless to say, lot’s to talk about over the coming weeks.  Just to whet your appetite of an easy way to see why we are interested in Emerging Markets, the next chart explains.

5-1-15 EEM 8 year

Expecting late this week before Memorial Day to slow …

Happy Monday!

John A. Kvale CFA, CFP

http://www.street-cents.com
http://www.jkfinancialinc.com
8222 Douglas Ave # 590
Dallas, TX 75225

 

When critical of their own, we listen up!

Just as a Ford dealership representative will not have much good to say about a Chevrolet, an investment parallel, Bill Gross, the largest bond fund manager in the world, will rarely say interest rates are going up, which will hurt his position.

We take note when someone is critical of their own wheelhouse. Recently Rupal Bhansali of Ariel investments was critical of her specialty, Emerging Markets. Our ears perk up when this happens, as while we do like this asset class, and have exposure, we have concerns on the overzealous money flows going into this asset class, taming our appetite for further allocation to this investment class.  Remember when something is overhyped, or too popular, we tend to become skeptical (Zigg when other Zagg.) When someone is critical of their own, we give it more credence as there are very few reasons other than honesty as far as we can tell.

Here are a couple of Mrs. Bhansali’s main points:

  1. Common misconception that there area a lot of excess returns to be garnered because the growth rates are high. She says not true, see next point!
  2. Correlation between GDP growth and returns are good especially in Emerging Markets–NOT TRUE according to Rupal
  3. Risk and returns are adequately compensated – Not so according to Rupal …there is major liquidity risk. Developed markets have $23 trillion of market capitalization compared to Emerging Market’s $3 trillion market capitalization…cash flows into and out of this asset class will dramatically move the market as they cannot absorb this movement  (This is our main concern as well)
  4. Investing in Emerging Markets especially the commodity based areas, Rupal recommends investing at high PE or low earnings cycle due to the deep cyclical nature, THIS IS NOT THE CASE TODAY–ACTUALLY THE OPPOSITE as PE’s are low
  5. In the next decade, it is very possible that developed countries will outperform Emerging Markets, due to current elevated Emerging Market values (Buying at the correct time is critical)
  6. Japan and Switzerland are Rupal’s stealth favorite longer term investments

Thanks for the critical pointers of her own area of expertise, we like candid honesty as it is often so hard to find and will continue to monitor her statements.

HHH (Happy Honest Hump Day!)

JK

214-706-4300   http://www.jkfinancialinc.com