A Day For Emails

I received an email with several topics from one reader including concern about what the meltdown of the Middle Eastern stock markets might mean for the rest of the world.

I was able to find two markets on BigCharts, Egypt (in black) and Jordan (in yellow-ish).

There have been some spectacular moves in the last few pick your favorite time period. There were huge moves up and then they all topped out in late January to early February and have dropped a lot since.

Does any of this matter? The answer to that question depends on what things you care about. The market caps of most of these countries are so small they might as well not even exist. This serves to dilute the importance for today. If you care about being forward looking it makes sense to think that these countries will only become more important to the world economic order as time goes on, regardless of what the US thinks of their politics.

These markets will not directly disrupt US markets yet. I suppose they could domino to eventually reach us but I would not be concerned about that. I view this as part of a multi year maturation process that all markets go through. Iceland may experiencing something similar, albeit for different reasons.

Some of the companies in these markets are important now and will become more so in the future. The best example I can think of is Egyptian telecom company, Oroscom. That one company could make the rest of the market important is not unprecedented. I may be wrong but I doubt too many people paid attention to Finland before Nokia came along but the country does have importance today for European managers.

Hopefully that gets the reader started on how to think of these markets.