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Über dieses Buch

You see it in every business paper or magazine. You hear it on every financial talk show. You are deluged with “facts” presented as certainty: China will be the number one economy. The BRIC countries (Brazil, Russia, India, China) will continue to outstrip the developed world in growth for decades to come. Emerging markets are therefore a sure bet for making money and should be part of every portfolio.

But is it true?

Emerging markets undoubtedly present one of the most exciting investment opportunities that has occurred over the last twenty years. But so was the U.S. housing market—if you knew when to get in and get out. Emerging markets are no different. To understand them you have to understand that they are different. You have to understand that you are not on Wall Street anymore. Different rules apply. And there are not only vast differences between developed and emerging markets, but vast differences among emerging markets themselves. The opportunities and risks are substantial and vary enormously between countries. Investing in Emerging Markets will help the retail investor, the more sophisticated money manager, and the prospective international businessperson to get beyond the hype, the marketing, and the dreams to understand the real risks and to take advantage of the real opportunities. This book:

Provides an overview of the emerging markets prime for investing Outlines the snares awaiting the unwary Guides novice investors and professionals alike Shows how to make money by carefully selecting markets for investment



Chapter 1. Emerging Markets vs. Marketing Emerging Markets

Chenggong is shiny new town in China that seems to represent the epitome of the Chinese miracle. For years, Western media, economists, financial analysts, brokerage firms, pundits, government officials—and certainly the Chinese themselves—have perpetuated the concept of unlimited growth.
William B. Gamble

Chapter 2. Never Forget: You Are Not on Wall Street Anymore

Something is strange in my town. All of the nail salons are owned and staffed by Vietnamese people. Exactly why this has occurred is basic to the understanding of how emerging markets work.
William B. Gamble

Chapter 3. China

The People’s Republic of China has enjoyed spectacular growth for much of the past twenty years. Annual growth rates in double digits are quite common and nearly the expected norm. Although China’s growth rate slowed for a few quarters, the Great Recession scarcely influenced it, and it soon powered back to reestablish breathtaking growth.
William B. Gamble

Chapter 4. India

India has always been considered the poor cousin of China. In the 1980s, the Indian economy bumped along with a per annum growth rate below 4%. This slow economic growth led many forecasters, investors, and economists to deride India, and they assumed that its problems were due to cultural factors. Critics claimed India was stuck with a “Hindu growth rate” as if culture was related to economics.
William B. Gamble

Chapter 5. Russia

It is hardly surprising that Jim ONeill chose to include Russia as part of the BRICs. Russia has enormous potential, partially due to its size. The Russian land mass makes it the largest country in the world, and it ranks 10th in population. Its economy is large as well. In terms of nominal GDP, it is 11th behind India, China, Brazil, and the G7 countries.1 In terms of purchasing power parity, it ranks ahead of the UK, France, Italy, and Brazil.
William B. Gamble

Chapter 6. Brazil

Brazil is a true cautionary tale for investors in emerging markets. Brazil has been “emerging” for the past 50 years. I remember clearly going to the Brazilian Pavilion at the 1964 New York World’s Fair (designed by the staunch Stalinist architect Oscar Niemeyer, one of the creators of Brasilia). The pavilion had a diorama in which a sleek, huge, mechanized vehicle sliced down trees and cut vast swaths through the green hell of the Amazonian forest, while at the same time building roads and bringing civilization to one of the last frontiers.
William B. Gamble

Chapter 7. Other Emerging Markets

One major sin committed by Wall Street (besides creating a financial crisis that put millions out of work and causing untold suffering) is creating not only the illusion of constant growth in emerging markets, but also convincing investors and, sadly, many world leaders, that the asset class is filled with markets that are somehow exactly alike.
William B. Gamble

Chapter 8. Profiting from Emerging Markets

The emerging market story is certainly seductive. It is not just the investment banks of Wall Street that hear the siren’s song. Famous academics do as well. A good example is Professor Burton Malkiel, author of the legendary A Random Walk Down Wall Street, first published in 1972 and now in its 10th edition. He is Professor Emeritus of Economics at Princeton University and a leading proponent of the efficient market hypothesis, which since its publication has shaped much of the thinking about investments.
William B. Gamble


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