This week on Consuelo Mack WealthTrack, a former Morningstar International Fund Manager of the Year discusses why global financial imbalances are disrupting the U.S. and European markets and helping emerging markets. Artio Global Investors’ Riad Younes discusses defensive short and long-term strategies for the new world order.
Rudolph-Riad Younes grew up in war torn Lebabon and thinks that the fear of seeing death up close helps him tackle global financial markets.
The show touches upon various of his investment themes. Some of them are:
Many Western countries are highly leveraged. Talks about US total debt (government, private and public) is 300% of GDP.
He thinks US equities are over-valued. He estimates the mid-cycle earning power of the S&P 500 companies is 50 versus the 90-95 number that analysts quote. Next is the P/E multiple assigned to that earnings. He thinks 12-14 has been the long term norm. He sees 700 as fair value for the S&P 500 index. However, pockets of cheapness can always be found.
1) Gold as an investment theme. He likes Gold and Gold mining stocks. His funds have 5-10% investment in Gold.
2) Some of the emerging markets as an attractive investment. He likes Russia and feels the country is unloved and has good potential. There are risks as well but the return potential outweights the risks. In International markets, he likes local companies that make consumer staples products. He feels the consumers of those countries will have more buying power.
3) He likes US companies with strong balance sheets with little need to dip into the capital markets via equity or debt.
4) He compares the valuation levels of some of the Asian countries to the dot com age in the US. He is not very bullish on those regions. He gives a couple of examples of potential arbitrage in the Chinese A stocks listed in China v/s the same companies shares listed in HKG. BHP and Rio listed in Australia v/s the shares listed in the UK.
About deflation and recession, he says if the economy does not have at least a 3% GDP growth despite all the stimulus money, it will feel like a recession.
Rudolph-Riad Younes grew up in war torn Lebabon and thinks that the fear of seeing death up close helps him tackle global financial markets.
The show touches upon various of his investment themes. Some of them are:
Many Western countries are highly leveraged. Talks about US total debt (government, private and public) is 300% of GDP.
He thinks US equities are over-valued. He estimates the mid-cycle earning power of the S&P 500 companies is 50 versus the 90-95 number that analysts quote. Next is the P/E multiple assigned to that earnings. He thinks 12-14 has been the long term norm. He sees 700 as fair value for the S&P 500 index. However, pockets of cheapness can always be found.
1) Gold as an investment theme. He likes Gold and Gold mining stocks. His funds have 5-10% investment in Gold.
2) Some of the emerging markets as an attractive investment. He likes Russia and feels the country is unloved and has good potential. There are risks as well but the return potential outweights the risks. In International markets, he likes local companies that make consumer staples products. He feels the consumers of those countries will have more buying power.
3) He likes US companies with strong balance sheets with little need to dip into the capital markets via equity or debt.
4) He compares the valuation levels of some of the Asian countries to the dot com age in the US. He is not very bullish on those regions. He gives a couple of examples of potential arbitrage in the Chinese A stocks listed in China v/s the same companies shares listed in HKG. BHP and Rio listed in Australia v/s the shares listed in the UK.
About deflation and recession, he says if the economy does not have at least a 3% GDP growth despite all the stimulus money, it will feel like a recession.
