If ever there was a year to make money in Big Tech, 2023 was it. My three big strategic calls all outperformed my expectations. Google rose from 85 to 142, Nvidia rose from 150 to 492 and Microsoft rose from 295 to 374. 2024 could well see several emerging markets beat the S&P 500’s stellar 26% rise this year, though the real fairytale has been Argentina’s YPF, up 70% since the election of a first libertarian President who quotes Friedman/Von Hayek, admires Mrs. Thatcher despite the horror of the Malvina’s war and is committed to energy privatization. There is still serious money to be made in the Pampas if economy minister Louis Capoto executes Milei’s reform blueprint.
India has been the darling of EM in 2023 with the Sensex up 17% and $20 billion in foreign inflows as it emerges as the highest growth/reform/macro momentum story in the EM constellation, a beneficiary of investor fears on China’s structural property woes, trade/geopolitical friction with the US and tech crack down since 2021. This is reflected in their relative valuations. The Shanghai Composite trades at 9.8X 2024 earnings whilst MSCI India is at 20X. Indian small caps and real estate stocks have had a spectacular 2023, yet I sense the mood of the market has now shifted to expectations of Modi/BJP win in the general election if the results of the three Hindi belt state elections are a loadstar for the future. This makes mega caps a compelling theme and cement an ideal proxy for a pre-election construction boom. India will have a general election in 2024 while Pakistan will have a General’s Election and General Asim Munir is Da Man while Imran Khan is still a state guest of the GHQ in Adiala. Howzzat?
A lower dollar, lower US inflation, lower borrowing costs and the near/friend shoring trend is a license to make money in Mexican stocks. Prologis Mexico is the obvious choice to surf the industrial renaissance reshoring theme in the northern states that border Gringolandia. On the consumer side, Grupo Televisa and Femsa have multiple catalysts to make us mucho dinero. Brazil has been a consistent performer since Lula calmed investor angst on Wall Street with his fiscal/pension reform compromises and the largest economy in Latin America is an emerging Saudi Arabia of crude oil as Petrobras spends $105 billion in capex on new projects in deep water offshore/the Amazon Basin while agri-business is 30% of GDP. Mercado Libre is up 90% in 2023 but I still think it is premature to sell this LatAm e-commerce colossus whose majority footprint is in Brazil while Itau Unibanco is a play on credit growth. The Brasilia Central Bank has begun to cut its 13.75% Selic rate, the dawn of a massive consumer boom that could well trigger three bagger moves in some specialist retail/property stocks listed on the Sao Paulo Borsa. Nubank is up 100% now but as Reagan would say you ain’t seen nothin yet given the scale of its TAM, 50 million new internet accounts opened since 2019 and a loco 35% ROE.
