This post is a guest contribution by Dr Mark Mobius, executive chairman of Templeton Asset Management.

During 2008, Russia was among the weakest stock market performers in the emerging market universe, losing more than 70% in US$ terms. But this year, the market has staged an impressive rally surging nearly 100% in the year-to-October period. The Russian market is among the cheapest in the emerging market universe and is trading at a discount of around 50% to its counterparts.

Today, Russia and many other emerging markets are now being driven by an excess in money supply in the international markets which means that these markets are experiencing an inflow of money for investments. Consequently, as Russia was more depressed than other markets, the upside is greater. At Templeton, we continue to find attractive opportunities in most sectors despite the recent rally as valuations remain undervalued. The Templeton Emerging

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One great thing about my position here as Director of Marketing is my extensive contact list. I say that because I have access to thousands of excellent traders, investors, and economists at my finger tips! So when things around the world catch my attention, I can quickly find someone who can give me the skinny on what’s really going down. One of my contacts is Nicholas Vardy, Editor, The Global Guru, and he’s got a MUCH better pulse on the world aboard then I do. That’s why I asked him to give us his reasons why the markets outside the US are doing so well and WHY!

He told me he’d love to get feedback from the Trader’s Blog readers, so let’s not let him down! You can also visit The Global Guru to get his new report on his favorite global picks.

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Make Your Fortune from the

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Cris Sholto Heaton’s recent article on investing in the small Asian countries outside China and India brings a welcome change to the usual run-of-the-mill emerging markets coverage.

You can read the whole story here.

I’ve long been a big proponent of investing in so-called Asian frontier countries. As Cris points out, “These smaller countries complement China and India. They should benefit from the rise of their larger neighbors and the region as a whole, while offering exposure to different themes and sectors.”

In fact, when I talked to Franklin Templeton’s outgoing emerging market fund manager Mark Mobius earlier this year, he was in the process of putting more of his own personal money into these miniature high-growth markets (you can read that story here, but you’ll need to have access to Index Publications’ subscription-only monthly ETFR publication).

Cris highlights

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I found this a href="http://www.bloomberg.com/apps/news?pid=20603037amp;sid=a2uzw71az3O0"interesting story /aabout emerging market specialist Mark Mobius. I've copied a couple of quotes here:br /br /blockquotepMark Mobius said global stocks will drop as much as 30 percent following their recovery from last year’s rout as companies take advantage of the rebound to sell more shares.br //pp“When you have these rapid increases, almost without correction, you will definitely have a correction at some point, so we can expect a lot of volatility,” Mobius, the executive chairman of Templeton Asset Management Ltd. said in an interview in Kuala Lumpur today. “Increases of 70 percent will be followed by decreases of 20 to 30 percent.”br /br /The biggest risk for global stocks is the increase in initial share sales and bond issues, Mobius said today. Investors will be “selling to take up new stocks, that will impact the prices,” he said. Mobius, who oversees about $25 billion, ...

Templeton Asset Management's assets in emerging markets will reportedly be doubled to $50 billion, says company executive chairman Mark Mobius, and Russia may count for 20% of that portfolio, as opposed to its current 10% portion.  'Emerging markets will be the first to climb out of the crisis, and Russia will be one of the leaders', Mobius comments.  Oleg Deripaska may have a fighting chance to prop up his beleaguered empire as lenders agree to restructure the debts accrued by his companies, with banks agreeing to extend a freeze on repayments of $7.4 billion worth of loans. Prime Minister Putin has cautiously suggested that in 2010, 'we we should enter the trajectory of post-crisis recovery'.  Next year budget spending will go down by 27.4%.  The Moscow Times reports on the Forest Code, a series of laws gradually ...

Profit From the “New Decoupling”

Tony Daltorio, The Investment U Research Team

Emerging markets first hit investors’ radar screen about 20 or so years ago. There was a lot of skepticism and a lack of understanding about emerging markets, which was understandable because there were few emerging markets open enough (or large enough) to invest in with a degree of safety.

That has all changed in the past two decades as most emerging markets are open to foreign investments and have a high degree of liquidity. The number of so-called emerging markets has also grown from a mere handful to over 60.

Yet Wall Street seems to have missed these changes – there is still a lot of skepticism on Wall Street when it comes to investing in emerging markets. That is where the opportunity for investors lies.

Famed investor

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This post is a guest contribution by Dr Mark Mobius, executive chairman of Templeton Asset Management.

Emerging markets surged in the second quarter of 2009 with the MSCI Emerging Markets Index returning 34.8% in US$ terms. Part of this return was due to weakness in the US dollar. A return of confidence in emerging markets, the desire for higher returns and the search for undervalued companies support the markets’ uptrend.

Latin American and Eastern European markets were among the strongest performers during the quarter, while most Asian markets also recorded strong double-digit returns. A rebound in commodity prices and stronger domestic currencies supported markets in Latin America. Asian markets continued to attract significant portfolio inflows allowing markets such as China, India and Thailand to outperform their regional counterparts. In Eastern Europe, Hungary returned 69.7% in US$ terms in part due to a strong forint. Poland returned 37.0% in

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I have been positive on emerging markets for a while, maintaining that especially China and other Asian countries, as well as resource-based Latin American countries, would be the leaders of the economic recovery and stock market performance in the next upswing. These views are supported by a recent Q&A with Mark Mobius, Templeton Asset Management’s guru on emerging markets, as published in the company’s Market Views newsletter.

Emerging markets have been outperforming thus far in 2009, do you think this trend will continue for the rest of the year? Although we are optimistic about the opportunities for upside potential, it is important to realize the volatility is still with us and will be with us for some time. This means there will be periods when the markets go down as well as periods when they go up. We should therefore take advantage of

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Everybody has a different stock / bond /cash allocation that is best for them.   Whether the selected equity allocation is high or low, we think over-weighting emerging markets and under-weighting developed markets within the allocation is the better long-term strategy for long-term investors — except for investors currently relying on, or about to rely on, their portfolios for life style support for whom the volatility may not be appropriate.

Much is being made of the fact that the key US equity indexes are near or slightly above their year-end 2008 level.  That is clearly better than not, but year-end 2008 was at a sorry level compared to year-end 2007.

These charts may help keep wider perspective.  They are three-year daily percentage performance charts that also show the 200-day simple moving average (a commonly used measure of the primary trend) and the year-end 2008 level.

The first thing you may notice is that exceeding

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Last August, in an exclusive article to Oxford Club members, I badmouthed decoupling - the theory that the rest of the world (particularly emerging economies) could somehow party on while the U.S economy endured a recession.

A quick glance at the scoreboard proves my criticism was spot-on…

While the S&P 500 Index slumped 38.5% in 2008, 30 countries witnessed drops of 50% or more. Even more telling, the poster children for the decoupling trade: Brazil (-41.2%), Russia (-72.4%), India (-52.45%) and China (-65.39%) didn’t escape punishment either, despite wild predictions they would…

Clearly, the old adage still applies, “When the United States sneezes, the rest of the world catches a cold.” (Or in some cases, like Russia, they get pneumonia.)

So why resurrect the past? Because decoupling diehards won’t let this junk science die. And sadly, another warning is in order…

Decoupling 2.0 - Redefining The Theory

On the back of an

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