29 Aug 2010, Posted by Prem Malik in MALIK'S CORNER, No Comments. Tagged China, Emerging Markets, India

Market update

1.Markets: The world economies are trying to find their footing. It was the US initially which went into tailspin and now followed by the serious problem of poor fiscal policies in Europe. I do not think Europe is out of the woods yet. Some more pain to come. China, India and other emerging markets continue to be in the news, both positive and negative.

 I continue to look at emerging markets and the growing consumer demand in these countries to lead the developed world economies out of their current slump. Recent news in the auto industry is proof of this new buying power. As an example BMW, Mercedes and Ford are leading the charge by reopening factories and hiring new workers. Oil, coal and fertilizer companies are also enjoying this pent up demand. China and India are buying up oil reserves in just about any country they can get their hands on. This will lead to higher long-term prices for oil. Precious metals will continue to shine in such uncertain markets. Long-term portfolios must reflect exposure to these growing sectors.

 A common question during manager presentations is the state of the US market. Most ‘blue chip’ managers will own companies, Coca Cola, American Express, J&J etc in their portfolios. These companies earn a substantial portion of their revenues from their global businesses. Most of these companies have been battered for their exposure to the US consumer. There is however a lot of upside in them. Warren Buffets top 10 holdings include the following companies. Coca Cola, Wells Fargo, Amex, Proctor and Gamble and Kraft Foods. All these powerhouses have massive global exposure. That is why he owns them.

 2. The enclosed charts from www.yahoo.com are worth looking at. Best performing market over the past 5 and 10 years is the Bombay Stock Exchange followed by Hong Kong and then the TSX.  Need I say more?

 3. I was recently interviewed by the press on my thoughts on investors making knee jerk reactions to daily news. Check out the link below

http://www.advisor.ca/advisors/news/industrynews/article.jsp?content=20100804_152422_7864

Thank you very much for your continued confidence in my services. I also value the referrals you have been sending me over the past few months and years. Thank you. Enjoy the rest of the summer and look out for the next ‘Malik’s Corner”

Regards,

Prem