Investor's Bookshelf: In conversation with the Indiana Jones of EM investing
'Buy when everyone is scared and sell when everyone is buying.'
That, according to ace emerging markets investor and prolific author Mark Mobius, is the best piece of advice anyone has ever given him.
“Try to control your emotions and avoid investing based solely on what you see everyone else doing,” he told AsianInvestor.
The person who gave him that nugget of wisdom was renowned investor-banker John Templeton, who asked Mobius in 1987 to run Templeton Emerging Markets, one of the first emerging market funds in the world.
Mobius, one of the world’s best-known investors, stayed with Franklin Templeton Investments for over 30 years, becoming the voice of emerging market investing over that period.
Media outlets even called him “the Indiana Jones of emerging market investing."
That refers to the famous movie franchise, where the main protagonist was a swashbuckling character who gets through tough situations -- and finds amazing treasures -- with wit, resourcefulness and grit.
EM DOYEN
The 88-year-old, now chairman of the Mobius Emerging Opportunities Fund, remains a fierce advocate of emerging markets.
With good reason. Emerging markets are growing at double the rate of developed countries and the investment opportunities are plentiful.
“India and even China are growing at two to three times the rate at which European countries and the US are growing.
“That will eventually be reflected in financial markets. Yet today, when the Indian stock market outperforms, people are surprised. But it’s a reflection of the reality of growth,” he said.
He believes India will continue to be a leading investment destination over the next decade and that China, now that markets are recovering, has some interesting stock plays on offer, although investors have to be more discriminating in what they pick.
“Don’t focus on stocks that are more critical to the Chinese economy; look at the global companies from China, many of which are continuing to make money – that is what investors should be looking at as Chinese equities recover,” he said.
ACTIVE BETS
Having invested in more than 5,000 companies throughout his career and managed more than $40 billion in investments, Mobius is a firm believer in active stock-picking.
Index funds are strict no for him when it comes to emerging markets.
“People think it's easy and cheap to buy index products but it’s a mistake. Many good companies may not be included in index funds just because they are too small and those are the companies we are looking for [when investing].”
Nevertheless, he acknowledges that index funds have become a significant player in the global investment landscape, accounting for $11.5 trillion in assets at the end of 2023.
Mobius has authored several books including Invest for Good (together with Carlos von Hardenberg and Greg Konieczny), The Little Book of Emerging Markets; Passport to Profits; Mobius on Emerging Markets and The Investor's Guide to Emerging Markets.
His latest book is The Book of Wealth: A Young Investor's Guide to Wealth and Happiness, which is a guide for young people starting out on their investing journey.
“I think it was a good chance to summarise what I’ve learnt over the years – the best way to create wealth,” Mobius said.
From stocks and bonds to alternative assets, this book serves as a guide for understanding the diverse avenues of wealth creation.
WRITING BUG
Ask him what his favourite book is among the 12 or so books he has written, and he responds: “The Inflation Myth and the Wonderful World of Deflation is my favourite,.”
Inflation is, not surprisingly, a big topic of discussion in the investment community these days as it awaits the first Federal Reserve rate cut.
“One of the inflation myths I point out in my book is that the measure of inflation, the CPI [consumer price index], is not accurate because it does not account for a lot of things,” said Mobius.
“While today, presidential candidates [in the US] talk about inflation of 4%, the reality is inflation is closer to 15-20%. How can you say inflation is just 4% when the cost of eggs or milk or other consumer goods has doubled in the past few years?”
How does Mobius manage to write so many books in between all the many other things he does, including travelling to over 100 countries?
“The best way to write is to do it in small doses. You try to write a chapter at a time, so that you are not overwhelmed," he said.
And while researching for a book can be tedious, he noted that the emergence of artificial intelligence has made research easier.
So what advice would he give aspiring writers?
“Speak from the heart. Don’t try to guess what other people are thinking or what they want to hear. Speaking from the hear is the way to really come up with good writing.”