Probably, if you think that I am going to write something on global outsourcing, Thomas Friedman or Chinese manufacturing or Indian service sector Inc's, Hold on your thought and proceed...World is Flat, what it means to me as an individual? Skim through this blog and pour your comments if it really makes some sense. (Simple Arithmetic)
Initially I was analyzing 2006 global market trend in order to write a counter blog for my earlier blog “Global Market Phenomena”. But as an outcome of analysis I got better investment ideas.
The following are the ROI from known influencing global market indices for the year 2006.
Most of us know there was a global downtrend during May -June 06. The following is an interesting statistics.(Global Down Trend - Sorted in order of 2006 H1 ROI)
Here comes the recovery of indices after the historical global fall.(Global Recovery and Up Trend - Sorted in order of 2006 H2 ROI)
And here comes the statistical trend chart of influencing global market indices for year 2006.
Based on above statistics, it crystal clear that China is out performing in emerging markets. Even during global down trend, china didn’t get affected much. A closer look on the above chart infers that china market trend is unique and totally different from other countries. Except China, rest of the market followed the similar pattern of rise and fall.
India, Mexico and Brazil are successor emerging market next to china.
Now back to main topic, World Is Flat? Whether the playing field is really becoming flat for a person like me? It looks like even a person like me can play a wise game in this flattened field.
Let me try something during 2007. I would like to have my own portfolio which has a mix of promising stocks from leading emerging market like China, India, Mexico and Brazil etc.
I dont know whether there is a way to do this ?!
Portfolio with diversified global markets, that’s sounds interesting and exciting, isn’t?
I don’t know whether my wish will come true, Lets C :)- !!!!!!
Even Impossible spells I’M Possible.
Happy Investing :)-
5 comments:
Arasa, very nice analysis. It gives a great picture about the global market in the last one year.
I am not sure how you are planning to get into investing in the Brazil, Mexico and China markets. Please share.
Seeni, Thanks for your comment.
As I said, even I don’t know how one can do this. But at least indirectly one can invest in ADR's of emerging foreign companies from US. Further analysis need to be done, but this thought could be a first step for an unknown long journey.
nice post. It kind of gave a gyst of what was happening in all the markets last year. The idea to invest in all the markets is also good. Start looking at ADRs, global index specific mutual funds.
The idea of Shanghai index beating BSE by such a margin was puzzling. So I tried something. Try the graph for 2 years.
Here it is.
http://finance.yahoo.com/charts#chart1:symbol=000001.ss;range=2y;compare=^dji+^bsesn;indicator=split+volume;charttype=line;crosshair=on;logscale=on;source=undefined
Shanghai has a return of 120% and BSE at 114%. I won't say a huge difference. BSE increased a lot during 2005 and corrected in 2006. For china it is a more gradual increase both in 2005 and 2006.
If you try 5 years it will be clearly in BSE's favor. What can I say ? :-)
I guess, generally all the markets improved. But the % of returns is based on their value and growth potential in those markets.
The link gets messed when I post it. Sorry. Try the chart yourself :-)
Thanks Siva. Tracking ADR’s & Index specific Mutual Fund would be wise option. Do you know any website similar to moneycontrol.com in US also Let me know if you come across people who are investing in US market.
You point is valid, index comparison for 2 yr and 5 yr time frame shows BSE is equally good and better than SSE respectively.
Recent couple of years only Inc's started making use of globalization to more possibilities, Also FII investment increased drastically in recent past.
So 2 yr comparison definitely makes logical input data for analysis. 5 Yrs won’t be a wise comparison, that’s long time frame for a comparison and results will mislead.
During 2005, BSE Sensex (65% ROI) witnessed Bull Run and it was a good year for BSE, whereas SSE CI (Nearly neither loss nor Profit zone) witnessed huge volatility and corrections.
During 2006, BSE Sensex (48% ROI) witnessed Bull Run, Historical fall, corrections and recovery whereas SSE CI (120%) witnessed stable and steady growth.
More or less Both China (120% ROI) and India (114% ROI) had given neck to neck ROI's over 2 yrs time frame.
Only thing which attracts me more on china is its performance during May global down trend and recovery after the fall. It outperformed its peers during 2006 H1 (20% ROI - Down Trend) and 2006 H2 (120% ROI - Up Trend).
Basically what I am selling here is the idea of having a diversified global portfolio :)-
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