I Told You So Moment: Emerging Markets Mounts A Broad Based Comeback!

Early this year, I was told that I did not predict the ‘correction’ in emerging markets.

Of course, I didn’t. I have to admit I am just human. I can’t predict or KNOW ALL events (human or environmental) that may affect the financial markets over the short term.

I won’t even pretend to do something close to it.

The expectation of omniscience is sheer absurdity. Sometimes some people (who have been mostly wrong in reading the markets) just like to engage in nitpicking, perhaps to look for company (misery loves company) or to look for conversation (signaling).

As an avid watcher of markets based on the boom bust cycle, I always say that NO trend moves in a straight line and have argued repeatedly on this space that the so-called unpredictable spontaneous events (MENA political crisis and Japan’s calamities) represented no less than profit taking. [But who would listen to uncontroversial non-faddish non-current event related ideas?]

And that I further argued that emerging markets, including the Philippine Phisix, will eventually move higher once uncertainty would have been discounted to as risk.

Well I guess, broader signs suggest that I’ve been right all along...

These beautiful looking charts from Bespoke Invest reveal that Emerging Markets have been making a HUGE broadbased comeback!!!!

If you want to know what’s keeping up this streak, well, I would suggest for you to study the Austrian Business Cycle Theory (ABCT). While there are other boom bust cycle theories too such as George Soros, Hyman Minsky, Charles Kindelberger et.al., all of whom are relevant, I would say that the Austrians have mostly nailed it.

Of course, the ABCT isn’t mainstream thinking (which means there are attendant social ‘conformity’ risks that goes with it and that you won't need credentialism as CFA or an MBA for this but simply go to mises.org for self study--as I--or take Mises academy online course).

And neither is the ABCT about the Holy Grail investing (which is why you won’t see or predict the interim volatilities).