Book review: “The little book of Emerging Markets” – Mark Mobius
After starting to look into Emerging Market companies, I thought it might be a good idea to beef up my library with some books on that topic.
Mark Mobius, the author of the book is one of the most well-known EM investors of all time (although he looks a little bit like the bad guy from a James Bond movie):
Nevertheless, I bought the “Little book” as they are usually compact and easy to read.
The book starts with the general investment principles of Mobius, which are clearly derived from value investing “Graham-style” following his mentor John Templeton. He stresses low valuations, especially with regard to tangible book and wants companies to pay out dividends.
Similar to Howard Marks he deeply believes in the cyclicality of markets.
Within the book there are several stories about specific markets such as Czech Republic, Kazakhstan, China, Thailand and Russia, but most of this are anecdotes, entertaining but not very instructive. He mentions some specific investments (Siam Cement, China Telecom) but overall he remains mre on the general level.
The best part in the book are the last chapters where he provides some general advice how to invest in Emerging Markets. For him, investing in Emerging Markets is Contrarian Investing.
My highlight quote from the book is the following:
“If you see the light at the and of the tunnel, it might be already too late to invest”.
Other good quotes are:
“When everything else is dying to get in, get out. When everyone else is screaming to get out, get in”.
“When everyone else is getting all pessimistic, that’s usually when it is tim to turn optimistic”
“You’ve sometimes got to take pain in the short-term in order to outperform in the future”
“The first country to get hit , and hit hard, is typically the first one to recover”
Overall I liked the book as it is easy to read, although it doesn’t offer a lot of “depth” which, on the other hand, is not the goal of the “little book” series.
Maybe it is a kind of “confirmation bias” from my side, but somehow the book confirmed my view that it is now a good time to dig deeper into Emerging Markets.
A final warning at the end: Just for fun I looked up the long term performance of the Templeton Emerging MArkets Fund. Despite being hailed as a guru, the long term performance of Mark Mobius doens’t look very good:
Interestingly, the last 5 years or so the fund looks like a simple MSCI EM tracker fund (minus fees):
I have to verify this but in fund management, legends are often overrated…….
value and opportunity 
You don’t need a set of scales to tell if someone is fat, you don’t need to look at more than the clothes of Mark Mobius in order to ascertain that he is a total goose. White jacket, white pants, white tie – triple check, Colonel Sanders.
I remember buying Taro Pharma off a fund he ran at $14 – it’s about $120 a few years later (although I sold at $70 or so post-NYSE uplisting).
Noble words and preaching on CNBC should be checked against results. In Mobius’s case, his returns are pitiful but that isn’t a surprise. He’s a figurehead. And an employee, I might add.
If you excel at investing, you don’t need a public profile. Look at Chandler for example = he and his brother turned NZ$10m into US$25b in 20 years via public investing in the stock market. No one pays any attention to him but if you ever get the chance to see his firm overview, the return numbers are far better than Buffett and Soros. Also, he did it with his own capital – no outside investors hence no marketing/OPM leverage. But, hey, no one cares about him. Probably because he lost $400m on Sino Forest (where he wasn’t actually wrong – the forests did exist contrary to the media perception – it was all in the legalities – which also means that I think the current bond holders will recover $0). If you have $25b, losing $400m doesn’t really matter.
well, I would call Mobius mostly an “asset gatherer”. I haven’t followed the Chandlers but I thought their Sino Forrest trade was really stupid. The problem in china is ALWAYS the legalities. The trees, factories etc. do clearly exist, they just belong to someone else in 95% of the cases.
10000 NZ Dollar in 25 Millionen oder Milliarden USD ?
From the story I know, they turned 10 mn into 5 bn:
https://www.santangelsreview.com/2011/07/24/richard-chandler-sino-forest-and-how-to-turn-10-million-into-5-billion/
Click to access S_Sov.pdf
Most “Legends” in business are better at marketing themselves than performing well at their profession I think. For example take a look at the outsider-CEOs or investors like michael burry, they keep doing the things they are best at and don’t have the desire to be praised by strangers. As a result most of these are little known in public and there is free space for people with a strong mission consciousness. Of course exceptions such as Soros or Buffet prove the rule 😉