Let’s speculate for a moment and say you could go back to 2009 and invest $10,000 in the stock market. In the aftermath of the financial crisis, the U.S. stock market went on to post year after year gains. In fact, after a relatively short five years, you’d be sitting on just over $28,400 today. Unfortunately, we don’t have a time machine. But we may have found the next best thing. All we have to do is look to Europe. The exact same conditions that led to the furious bull market in the U.S. are setting up across the pond… Read More

Let’s speculate for a moment and say you could go back to 2009 and invest $10,000 in the stock market. In the aftermath of the financial crisis, the U.S. stock market went on to post year after year gains. In fact, after a relatively short five years, you’d be sitting on just over $28,400 today. Unfortunately, we don’t have a time machine. But we may have found the next best thing. All we have to do is look to Europe. The exact same conditions that led to the furious bull market in the U.S. are setting up across the pond today. #-ad_banner-#Let me explain… The financial crisis of 2008-2009 turned out to be the worst recession in nearly 80 years. We saw the collapse of banks, the bursting of a real estate bubble and plummeting stock prices around the world. Nothing was spared. In the U.S., the Federal Reserve acted quickly. The central bank cut the federal funds rate to zero and  rolled out the Troubled Asset Relief Program (TARP), designed to step in and save the banking sector by doling out $700 billion in taxpayer dollars. It also began purchasing billions of dollars in mortgage-backed securities and treasuries. And… Read More

As the monsoon season drew to a close in India last September, the local economy looked waterlogged.  The nation’s currency, the rupee, had just slid to an all-time low against the dollar, as quarterly growth fell to just 4.4%, the slowest growth rate since the global economic crisis of 2009. In response, Indian stocks accelerated their declines as it became increasingly apparent that any economic turnaround would be slowing in coming. Yet as is often the case with many markets, sectors, or even individual stocks, the point of maximum pessimism is often the best time to invest.  That was surely… Read More

As the monsoon season drew to a close in India last September, the local economy looked waterlogged.  The nation’s currency, the rupee, had just slid to an all-time low against the dollar, as quarterly growth fell to just 4.4%, the slowest growth rate since the global economic crisis of 2009. In response, Indian stocks accelerated their declines as it became increasingly apparent that any economic turnaround would be slowing in coming. Yet as is often the case with many markets, sectors, or even individual stocks, the point of maximum pessimism is often the best time to invest.  That was surely the case with India stocks, which have staged a remarkable comeback. In just the past 10 months, India’s SENSEX index has rallied an impressive 35%, and many India-focused exchange-traded funds have done a lot better than that. (These ETFs have benefited from a rebound in the rupee, which has magnified gains.) #-ad_banner-#The catalyst behind this remarkable rebound is quite simple: Narendra Modi.  India’s new prime minister began his campaign last fall on a platform of economic rejuvenation, and Indian stocks have already begun to reflect an anticipation of much better days ahead. India’s Economic Times has… Read More

With the largest population in the world, China is a huge market — including for one of the world’s fastest-growing industries, mobile phones.  #-ad_banner-#China is projected to overtake the U.S. as the world’s largest mobile phone market this year: Sales in China are expected to hit $87 billion, compared with U.S. sales of $60 billion. That represents year-over-year sales growth of 50% for China, compared with a mere 4% for the U.S.  Here are three distinct ways in which investors can gain exposure to China’s mobile market: China’s Mobile Dominator The #1 wireless provider in China (and… Read More

With the largest population in the world, China is a huge market — including for one of the world’s fastest-growing industries, mobile phones.  #-ad_banner-#China is projected to overtake the U.S. as the world’s largest mobile phone market this year: Sales in China are expected to hit $87 billion, compared with U.S. sales of $60 billion. That represents year-over-year sales growth of 50% for China, compared with a mere 4% for the U.S.  Here are three distinct ways in which investors can gain exposure to China’s mobile market: China’s Mobile Dominator The #1 wireless provider in China (and the world), China Mobile (NYSE: CHL) owns over 70% of the market for mobile services in China. Yet, China Mobile is still in the middle of its LTE and 4G buildout, while also expanding in rural areas across China.  A key driver for the Chinese market is demand for more-sophisticated 3G and 4G phones, which offer users faster data transfer rates. The market looks promising, given that 70% of China Mobile subscribers still use 2G. That means China Mobile is poised to become an even bigger winner in China’s mobile market.  China Mobile has no debt and pays an enticing… Read More

For the companies that own lease massive dry-freight cargo ships, it’s been another tough year.  Copper export woes in Indonesia, canceled orders in China for U.S. soybeans, and a few other events have taken away any optimism that the freight industry may have had at the start of the year. The Baltic Dry Index, which tracks the daily lease rates of a wide range of freighters, was rallying six months ago, but is again back in the doldrums. #-ad_banner-#So you would have expected to hear of a dour mood when the industry’s leading players gathered this… Read More

For the companies that own lease massive dry-freight cargo ships, it’s been another tough year.  Copper export woes in Indonesia, canceled orders in China for U.S. soybeans, and a few other events have taken away any optimism that the freight industry may have had at the start of the year. The Baltic Dry Index, which tracks the daily lease rates of a wide range of freighters, was rallying six months ago, but is again back in the doldrums. #-ad_banner-#So you would have expected to hear of a dour mood when the industry’s leading players gathered this month at Posidonia, the biennial meeting in Greece to discuss industry conditions. Deutsche Bank analyst Taylor Mulhern, who attended the event, heard an entirely different tone.  His view of the event: “Optimism from management teams for fundamental improvement in the shipping sector continues to build after several years of prolonged fragility.” For an industry that has been slumping since 2008, such optimism would seem to be misplaced.  At the height of the economic boom before the global downturn, freight operators placed orders for many new ships, and those ships hit the market right as global demand for them was tanking. By… Read More

There’s a reason why Brazil, Russia, India and China (the so-called BRIC nations) captivated investors in the 1990s and 2000s. #-ad_banner-#Those four countries together host nearly 3 billion people. That created the opportunity for rapid growth in domestic consumption as hundreds of millions of people moved into the middle class. Yet the BRICs have lost much of their luster in recent years. Only China has been able to maintain robust economic growth rates, and even that economy is beginning to wobble. Until Brazil, Russia and India in particular sort out their bottleneck and rule-of-law challenges, their economies will remain hampered. Read More

There’s a reason why Brazil, Russia, India and China (the so-called BRIC nations) captivated investors in the 1990s and 2000s. #-ad_banner-#Those four countries together host nearly 3 billion people. That created the opportunity for rapid growth in domestic consumption as hundreds of millions of people moved into the middle class. Yet the BRICs have lost much of their luster in recent years. Only China has been able to maintain robust economic growth rates, and even that economy is beginning to wobble. Until Brazil, Russia and India in particular sort out their bottleneck and rule-of-law challenges, their economies will remain hampered. In the face of such challenges, investors have been moving downstream to a group of countries, known as frontier markets. These markets typically have 30 million to 250 million people, and in many instances, have been pursuing investor-friendly policies that have helped to generate solid growth in both domestic consumption and exports. Indonesia, with nearly 250 million people, has been a clear success story: Its economy has grown from $95 billion in 1980 to $750 billion in 2010, according to the International Monetary Fund (IMF). U.S. Investors latched onto Indonesian stocks in a big way when country-specific exchange-traded funds (ETFs)… Read More

Back during the gold rush of the 1800s, there were two ways to make money…  #-ad_banner-#You could mine for gold yourself — or you could sell the picks and shovels the miners needed.  The companies that made and sold the picks and shovels often proved much better investments than speculating on the gold mines themselves. Fast-forward a few decades, to the Texas oil boom, and the adage proved true again — especially for Howard Hughes.  Hughes realized that the real money was in making the drillbits used in drilling for oil rather than actually drilling for… Read More

Back during the gold rush of the 1800s, there were two ways to make money…  #-ad_banner-#You could mine for gold yourself — or you could sell the picks and shovels the miners needed.  The companies that made and sold the picks and shovels often proved much better investments than speculating on the gold mines themselves. Fast-forward a few decades, to the Texas oil boom, and the adage proved true again — especially for Howard Hughes.  Hughes realized that the real money was in making the drillbits used in drilling for oil rather than actually drilling for oil. He would go on to become the richest man in the world for a time. Today, there’s a modern-day boom in farming.  The global demand for food is at levels never before seen. Global population growth and the use of crops as renewable fuels are all contributing to the demand.  What was true in the previous booms hasn’t changed — it’s often more profitable to own the materials that farmers need to grow crops rather than speculating on the crops themselves. Crops are dependent on weather, and natural disasters can wipe out a full year’s work in a matter… Read More

Investing in specific markets or regions has always been about one thing: the trade-off for higher returns in emerging markets and lower risk in developed markets.  #-ad_banner-#Emerging markets like the BRIC nations — Brazil, Russia, India and China — have long promised high rates of economic growth and soaring stock values. Unfortunately, as any emerging-markets investor during the past couple of years can tell you, these markets are also likely to underperform spectacularly on fears of a debt bubble or geopolitical problems.  In contrast, developed markets like the United States and Europe offer relative peace of mind but… Read More

Investing in specific markets or regions has always been about one thing: the trade-off for higher returns in emerging markets and lower risk in developed markets.  #-ad_banner-#Emerging markets like the BRIC nations — Brazil, Russia, India and China — have long promised high rates of economic growth and soaring stock values. Unfortunately, as any emerging-markets investor during the past couple of years can tell you, these markets are also likely to underperform spectacularly on fears of a debt bubble or geopolitical problems.  In contrast, developed markets like the United States and Europe offer relative peace of mind but weaker returns over the long run. An investment in the iShares MSCI EAFE (NYSE: EFA), an exchange-traded fund invested in developed markets, over the past 10 years would have exposed you to just three-quarters the volatility of the iShares Emerging Markets Fund (NYSE: EEM) — but yielded a compound annualized return of just 7%.  However, there’s a way to combine the rapid growth of emerging markets and the safety of developed markets — and you can find it in one country.  This year marks the country’s 23rd consecutive year of economic growth. This country’s stable political backdrop and investor-friendly environment… Read More

Six years after the global Great Recession began, most European economies remain in a very deep funk. #-ad_banner-#And the continent’s bankers are growing nervous. Chronic high levels of unemployment have already been a long-standing concern, and now the European Central Bank (ECB) is struggling with another mandate: price stability. Europe may be on the cusp of falling asset prices, which can lead to a series of negative ripple effects. The eurozone inflation rate slipped to an annualized 0.5% in April, and Goldman Sachs’ economists estimate that figure fell to just 0.3% in May. Fears are rising that prices may start to… Read More

Six years after the global Great Recession began, most European economies remain in a very deep funk. #-ad_banner-#And the continent’s bankers are growing nervous. Chronic high levels of unemployment have already been a long-standing concern, and now the European Central Bank (ECB) is struggling with another mandate: price stability. Europe may be on the cusp of falling asset prices, which can lead to a series of negative ripple effects. The eurozone inflation rate slipped to an annualized 0.5% in April, and Goldman Sachs’ economists estimate that figure fell to just 0.3% in May. Fears are rising that prices may start to shrink, and once price deflation takes root, it is hard to reverse it. That fear is bringing out a rarely used arrow in the quiver: negative interest rates charged by the ECB on the money that banks park on their balance sheets, which can strongly encourage banks to step up their pace of lending. Higher lending often leads to higher spending, by both businesses and consumers alike. The ECB is lowering its main refinancing rate from 0.25% to 0.15%, and the rate it pays to banks for their deposits from zero to minus 0.1%. (The ECB is also freeing up… Read More

I’ve been in this racket for nearly two decades. And I have to say, I’ve heard lots of creative excuses from companies for missing earnings estimates, all of which seem to be about as effective as “the dog ate my homework.” #-ad_banner-#The weather has always been my favorite excuse especially with retail and homebuilding and related supply stocks. “It was too hot, so people didn’t buy.” Or “It was too cold, so people didn’t come out.” Granted, here in the U.S., we did have an extremely cold and extended winter. So, when first-quarter earnings rolled out this year, the weather… Read More

I’ve been in this racket for nearly two decades. And I have to say, I’ve heard lots of creative excuses from companies for missing earnings estimates, all of which seem to be about as effective as “the dog ate my homework.” #-ad_banner-#The weather has always been my favorite excuse especially with retail and homebuilding and related supply stocks. “It was too hot, so people didn’t buy.” Or “It was too cold, so people didn’t come out.” Granted, here in the U.S., we did have an extremely cold and extended winter. So, when first-quarter earnings rolled out this year, the weather was blamed by more businesses than usual. But one building products company caught my attention by delivering stellar earnings without a mention of the snow or ice — and its back story is even more intriguing than its growth rate. Based in Israel, Caesarstone Sdot-Yam (Nasdaq: CSTE) is a leading manufacturer of engineered quartz surfaces used mainly in countertops for the residential and commercial markets. The company sells in 42 countries through both direct and independent distribution. Since its 2012 IPO, the stock has been on a tear. But as interesting as CSTE’s merits might be, the story… Read More

It was the turn of the millennium when I boarded a train headed to a place that had just become its own country seven years before. I would be spending Y2K in the U.S. embassy overlooking the city of Prague in the Czech Republic. #-ad_banner-#The country was young and not well known, but its growth potential would turn out to be tremendous.  I spent time touring the incredible city. I walked over the Charles Bridge — the most important connection to Prague Castle and the city’s old town — and admired its architecture and history.  The most impressive thing was… Read More

It was the turn of the millennium when I boarded a train headed to a place that had just become its own country seven years before. I would be spending Y2K in the U.S. embassy overlooking the city of Prague in the Czech Republic. #-ad_banner-#The country was young and not well known, but its growth potential would turn out to be tremendous.  I spent time touring the incredible city. I walked over the Charles Bridge — the most important connection to Prague Castle and the city’s old town — and admired its architecture and history.  The most impressive thing was the surprising lack of tourists. It was like I had the city all to myself. Most people still called it Czechoslovakia. At the time, Prague was Eastern Europe’s hidden gem.  Fast-forward six years to when I returned… and it was a completely different city. The Charles Bridge was completely packed, the line to enter Prague Castle was a 30-minute wait, and the locals now spoke German and English on top of their native tongue. Prague was no longer Eastern Europe’s secret. It had developed into a vibrant city booming with people from all over the world. The Czech Republic had… Read More