Investors overall have grown more skeptical of these formerly fast-growing economies: Growth for emerging markets dropped by nearly half between 2007 and last year, and investors pulled out a net
Leverenz spoke recently about why he sees big gains for Chinese online-video companies in particular, as well as why he has avoided Argentine stocks and why Indian stocks may be in the midst of a strong bull market.
Q: You've called Chinese online-video stocks one of the best media opportunities of a lifetime. Why so optimistic?
A: America is disproportionate in everything -- half the world's health care spending, half the world's media spending. The only other country that has that capacity to develop these continental-size markets, whether it's health care or media or technology, is going to be
And that's what I meant by one of the greatest media opportunities of all time:
Q: What do you make of all the jitters surrounding Chinese stocks?
A: Chinese equities have done stunningly bad against the world's greatest growth markets from a macro perspective. There was a big bull market between 2004 and 2007, but we're basically back where we were 10 years ago. All great bull markets have to start in the environment of extreme stress and despair because then ownership is low. That's where we are in the Chinese equity market.
I think that
Q: What do you think of the argument that it's better to invest in the Chinese economy by buying developed-market stocks that do lots of business there?
The Chinese model is very different. Think about
There's a presumption that
Q: You've said
A: Politics is dirty. The problem is institutions create politics. The institutions in
Q: What about
A: I do think in this five-year term with Modi, it will be a very strong market. It's not just his character but the unique mandate he's got, that he's going to be able to scare his opposition into doing things that they may not be inclined to do because they would be voted out if they didn't. From that perspective, all the bottlenecks in the economy -- about land clearances, environmental permits, financing for projects -- all those things that had completely broken the animal spirits of
From the perspective of an investor, it looks really encouraging. However if
Q: What kind of returns should investors expect from emerging-market stocks?
A: I can only speak to my fund. My fund in the long term generates somewhere between 12 and 15 percent compounded. I think that's the capacity of this fund. But in the environment where most people think interest rates are going to be stuck at relatively low levels, that's a pretty nice return. But that won't happen year in, year out.
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