Templeton's Mark Mobius says the global economy is "very healthy," according to Bloomberg. He also is reported as saying that losses from the US subprime mortgage downturn have "almost passed."
More:
"We're pretty bullish,'' Mobius, whose Templeton Emerging
Markets Investment Trust has beaten its benchmark over the past
five years, said during an interview from Hong Kong. "Markets
are probably going to surge ahead to new highs barring any other
unforeseen circumstances.''
The fund manager said he has purchased shares of energy
companies Sinopec Shanghai Petrochemical Co., PetroChina Co. and
Petroleo Brasileiro SA during the market rout of the past month.
South African shares and those of Chinese companies traded in
Hong Kong are among the most attractive in emerging markets
worldwide, he said. Mobius added that U.S. shares are "not very
expensive.''
Is Mobius correct? I don't pretend to know and the big picture, top-down stuff is beyond me anyway. (Heck, the bottom-up stuff may be beyond me as well.) But Mobius is worthy of paying attention to -- and I'd rather spend time reading (or hearing) his thoughts than most talking heads.
I'll add that I agree with him that US stocks aren't very expensive as a group. And they're not cheap, either. Most tend to be fairly valued from what I can tell.
It is certainly interesting that Mobius is so positive at this juncture. I think certain sectors of the market are quite cheap, while others are expensive. Just as you said, the market overall looks pretty fairly valued.
Posted by: Aaron | August 30, 2007 at 01:09 AM
I'm a macro amateur as well, but from the market-wide measurements I've seen, I still think it leans in the direction of overvalued once one considers that profitability has been exceptionally strong recently. (Implication being that earnings are at a cycle peak.)
I see that earnings yield on SPY is about 5.8% now (vs 6.1% historically). Dividend yield on SPY is about 1.8% now (vs 2.3% historically).
Posted by: Steve Austin | August 30, 2007 at 01:06 PM
Well, Ed Hyman of ISI on Bloomberrg was just as bullish, on the economy and the market going forward.
Posted by: me | August 30, 2007 at 01:32 PM
I noticed that Francis Chou in his latest report is expecting more troubles from the subprime thing. His flagship fund reports being more than 40% cash. Lots of opinions out there.
Posted by: John | August 30, 2007 at 11:33 PM
Well, hé was certainly wrong about the mortgage situation, as of spring 2009.
Posted by: Jay Taylor | June 10, 2009 at 05:26 PM