Skip to main content

BRIC: What's in store for 2010 ?

I am regular reader of Economist - normally my Saturday goes in reading Economist. It gives me good understanding about geo-political and economic issues around the world. This week, it has special coverage on "Brazil takes off". Few weeks back it had similar special coverage on China. I am hoping that they will have one for Russia and India.

Economies and stock markets of BRIC countries are on fire again even though economies of their biggest customers (US, Japan and Europe) are still in slow recovery. At one point last year, everyone thought that BRIC countries economies would bust but governments of these countries have done pretty good job in timely stimulus. Frankly, the way stimulus was handled by China and India was much better than US stimulus since it got economies going quickly. For example, India's plan of offering job to anyone who wants to work in rural India is an excellent idea in such situations. After all, that's what got US out of great depression. I wish Obama would have applied something similar in US - after all US needs scheme like this to get its infrastructure fixed and also help unemployment below 7%.

So now that BRIC countries are on solid footing, what's in store in 2010 ? Here are some macro predictions:

  • GDP Growth: China: 9%, India: 7%: Brazil: 5-6% and Russia: 4-5%
  • Stock market index growth by end of 2010: China: 20%, India: 15%, Brazil: 15-20%, Russia: difficult to predict but could be around 10-20%
  • Generally stable governments in all 4 countries
What are the vehicles to invest in BRIC countries:
  • Personally I invest in VEIEX which not only covers BRIC countries but overall emerging markets. It is up by more than 70% this year and could rise another 20% by end of 2010. Wait for markets to shake up little bit and invest at regular periods like every month or every quarter so you can cost-average. As always, Vanguard has low expense ratios which help
  • There are other country specific funds like MCHFX, MINDX, FLATX but they are risky due to one country focus
  • I could recommend quite a few individual stocks like IBN, SLT and so on but again they could be risky. It's better to stay with professional mutual fund managers when it comes to investing in emerging markets
Happy BRICing and have a good week !

/Shyam

Comments

Popular posts from this blog

2025 = Is it going to be 1997 or 2000?

Happy Holidays... After 5 months of hibernation with no real reason than writing block, I decided to use quiet morning of Christmas day to start writing again. Lot has happened in last 5 months - in particular release of Animal Spirits with Fed starting interest rate reduction cycle and historic victory of President Trump for 2nd term. As the year turns into 2025 and stock markets at all time high, one would wonder, what's next?  To answer this, one needs to look back at 1920s and 1990s to give us some context on where markets may be headed. 1920s saw invention of televisions, radio, wider adoption of cars, vacuums, penicillin and many other which we consider household items now. These inventions created roaring 20s with markets going up by 500% eventually leading to crash of 1929. However during mid-20s, markets keep going up due to excitement of these inventions and end of World War-1 and Spanish Flu Pandemic. 1990s also saw many inventions - the key being launch of Netscape in 1...

And the Oscar goes to...

It's Oscar Sunday and time for predictions for few categories - before I digress into talking about drama in DC or markets.  First of all, I want to recognize the damage LA fires have done to the beloved areas of Los Angeles and impacted families across all spectrums. My heart goes out to them and wish them recovery and rebuilding of their lives... This year's Oscar nominees and post nomination period had been interesting to say the least. Due to this, the field is wide open in almost all categories and that's what makes prediction game so interesting. Just to set expectations, I would consider a win if I get even 50% predictions correct given the dynamics of nominees this year. So here are my predictions - "And the Oscar goes to..." Best Picture - Anora (surprise could be "The Brutalist") Best Director - Sean Baker for "Anora" (Surprise could be Brady Corbet for "The Brutalist") Best Actor - Adrien Brody for "The Brutalist"...

The Politics and Gamesmanship of TikTok!

TikTok is less than 3 hours from going dark on USA's east coast if TikTok owner Bytedance (and Chinese Government) follows thru its "bluff" to honor the law " Protecting Americans from Foreign Adversary Controlled Applications Act" which goes into effect on Jan 19, 2025. And suddenly there is lots of politics and gamesmanship around TikTok.. Let's look at the players and their positions US Congress: The " TikTok Ban" law was passed by congress with bipartisan support and coincidently it goes into effect one day before new administration takes charge. Everyone knew the exact date and time of oath taking ceremony of new President...but maybe the congress did not think that there would be change of President and did not bother to put effective date post new government taking charge...that created a window of 36 hours of "law being in effect" unless... President Biden: Biden himself did not think that he won't be President for 2nd term. S...