Some guy wrote to me that I was bearish for 4-years. Poppycock! In mid-Jan, I wrote a bullish analysis of Prologis (PLD), the world’s largest industrial REIT. PLD was 105 then and 124 now. An 18% return in 6-weeks is a gift for those with the IQ to grasp my logic. Which poor Densa could not. What about VNO at 18, Citi at 60, Wells Fargo at 57 and Meta at 200? Get real!
The EM trade has been a winner in 2025. Thanks to China’s spectacular bull market and the DeepSeek bombshell. Alibaba, another winner gift, is up almost 60% in 2-months. The bull market in Shanghai, Hong Kong has a long way to go as the 5,000% bid for Mixue Group IPO shares in Hong Kong on the eve of Tariff Tuesday suggests. With 45,000 stores in Asia, Mixue has more outlets than Mickey D and its owners are richer than the founder of Starbucks. The Macau casino stocks are all up 6-9% on the HKSE as it reclaims its spot as the world’s top gaming epicenter from Vegas, Monaco and Marjan Island LOL. The NPC conclave will only boost the China consumer/tech trade, so I seek my pot of EM gold in Cathay/Dragon Empire in multiple sectors.
India’s Nifty has been hit by a $20 billion exodus of foreign smart money, a 90% fall in FDI flows, a cyclical growth dip, massive earnings risk, a cancellation surge in mutual fund inflows, a rupee that has tanked to 87.40, a small cap bloodbath and threat from Trump’s reciprocal tariffs. The Nifty’s chart is awful and its 19.4X val multiple is still expensive at a time when the animal spirits of Harish/Hema Milkpack (no daaru in Mother Gujarat as the RSS Bapujis forbid soma and St. Valentine’s Day nights out with the GF squeeze at Barista Coffee!) are muted while earnings risk ensures that the stock market will continue to fall. I seek refuge in low beta Indian money center banks and positioning into IT services firms that benefit from LLM implementation projects and the uber weak rupee.
The brawl in the Oval Office between Trump, Vile Vance and Zelensky marks a new low in the annals of American diplomacy but has created a money making opportunity in German/Italian/UK defense stocks and a growth ballast for the Polish zloty/the Romanian leu. My core EM FX exposure remains in grossly undervalued LatAm currencies, led by the Brazilian real and the Colombian peso, both high yield darlings other than the Turkish lira, where the collapse of FX volatility made local currency bills at 50% irresistible. Thrilled to report that my Gen-Z girl twin, now at an Ivy League campus in the fake Hellenic City of Ithaca in boonie New York had a wonderful time in her hols in Medellin and Cartagena. The love for Latin America is obviously genetic. Salsa time in EM FX.
The EM macro trinity is my G-force. King Dollar is dethroned as the Atlanta Fed expects -1% GDP, consumer confidence has plunged by a ghastly 7-points and the market expects 3-Fed rate cuts now, which it will not get. The alchemy of finance is pure EM!
Also published on Medium.
