How to play the hot foreign markets now: What a laugh, sometimes its best to look back over ten years in order to understand the media stock pushers and financial press today.Interview with a fund manager, 1997:1996 was supposed to be the big one for foreign stocks, but the performance of foreign funds has lagged that of domestic funds. What happened?Its not so much that foreign markets have done poorly as that the US market has continued to do better He continues his answer in a fairly well thought out way.Which regions of the world present the best buying opportunities?I think that the major emerging markets of Latin America have finally turned the corner following their collapse from the Mexican peso crisis in late 1994 I think not. Turkey would have been the way to go. Who would have figured that out?The hoped-for economic recoveries in Western Europe really havent materialized yet. Do you think they will occur in 1997?Yes. Despite the fact that many European corporate earnings forecasts were reduced in the third quarter of 1996 Ha.Are there any areas that you are not avoiding these days?Were not avoiding Japan about 22% of our fund is invested there versus almost 40% for the Index Ha, ha.What about other Pacific Rim countries?Our portfolio has more non-Japanese Asian stocks than the Morgan Stanley Index 16% versus 10%. We particularly like Hong Kong, Malaysia and South Korea, which we feel will mend its differences with North Korea in five years or so Is there anything that could disrupt your relatively rosy view of foreign markets? Also it looks like the US recovery will go on for a while, putting investors at ease and encouraging them to take greater portfolio risk and diversify by investing abroad.Ha, ha, ha. The recovery continued for three more years.
Source: Page three of Bottom Line Personal, January 15, 1997.