Tuesday, February 5, 2013

Joining the Seeking Alpha Team; Global Growth Steady and Positive in January

Yours truly has begun posting on Seeking Alpha.  An article I submitted last night was published today regarding my theme that a number of emerging stock markets have plenty of risk, but ultimately better risk-reward characteristics than does the U.S. equity market.  This article explored some of the reasons for investors to consider the major Russian ETFs such as RSX or ERUS, and the smaller-cap one, RSXJ.  This is the LINK.

In today's news, Markit reported strong global PMIs (LINK to list).  Here is the report from Russia:

“The Russian economy grew somewhat faster in January, theHSBC Russia Composite PMI survey revealed. Importantly, itfollows from the survey’s results that economic growth inJanuary was stronger than the average growth in both 2011and 2012. Translating Composite PMI Index values into GDPgrowth numbers using past correlation, we see clear signs offaster GDP growth over the recent months. Recent values ofComposite PMI Index are consistent with GDP growth of about4%, we estimate.“The PMI data show that growth engines rebalanced inJanuary: manufacturing has rebounded while the servicesector moderated its output growth that nevertheless remainedrobust. This rebalancing is healthy, we think, as it puts theeconomy on a more stable growth track. That said, somefurther moderation of business activity expansion in the servicesector is quite likely in the coming months due to the expectedslowdown of consumption demand growth.

Russia is performing well economically, it appears, regardless of its political situation.
Globally, the PMIs were positive, as well.  Russia's JPMorgan Mfg and Services PMI was reasonably strong at 53.3.  

Amongst the country services PMI, Brazil did well, with the HSBC Composite PMI accelerating to 54.9 from 53.2 in December.  I very recently went long the Brazilian real around today's price.  The USD-BRL ratio of 1.9860 has room on the charts to correct downward to 1.80 or so.  Given today's accelerating data from HSBC, I also went long the small-cap (domestically-oriented) Van Eck ETF, symbol BRF.  This ETF is well off its pre-crash highs.  It is not a value play but has good growth characteristics.  

A number of emerging countries have had stronger and steadier economic growth post financial crisis without having had to resort to massive overt monetization of the federal deficit.  This is where I want a good portion of my equity allocation to be while their stock markets have lower valuation metrics than those of the U.S.


  1. Will you be cross-publishing (or at least notifying us) of all your articles at Seeking Alpha? I'm a huge fan of your work and would hate to miss an article, but it would be difficult to cull every Seeking Alpha article every day looking for your byline.


  2. You could set up an alert for articles by doc at SA. You'd have to register there first, if you're not already.

    I haven't been there for a long time, as the signal/noise ratio is usually quite low. But I'll set up an alert for doc's material. Don't wanna miss it!