The Big Picture For The Week Of November 13, 2005

The International Trader-Europe column in this weeks Barron's has some interesting commentary about central and Eastern Europe. Many of the NYSE ADRs and CEFs that invest in the region are down noticeably (20% in some cases) in the last few weeks.

The article points to deficits growing faster than GDP as cause for concern in places like Hungary. There are quotes with word like overheated to assess the current sate of the equity markets in this part of the world.

Hungary, as an example, has had problems with its deficit for a long time, this is not new to equity investors.

The point here is that for investors that can tolerate emerging market volatility, Eastern European stocks and funds have dropped a lot with nothing really new added to the equation. From a contrarian standpoint it makes sense to think that in dollar terms this region might be closer to a low than to a high.

I think this line of thought can be applied to many themes. The negatives cited are old news and a lot of the stocks are much lower. This gets repeated often. Wading through this type of report can be a good way to improve your process.