Follow Up To Homeward Bound

Larry asked what regions were my "favorites" for the next 5-10 years.

I don't really think in terms of favorite per se. Ideally there would be no need to go heavier into foreign because the Kudlowite view will turn out to be right. While I believe in what is going on in these countries I write about and exposure client money to the other part of it is concern over things not going well in the US.

If the US does poorly (not talking about some world wide contagion that starts in the US but simply a lag) there are many different foreign countries that could do well.

I tend to group some of these countries together into categories. The developed countries that I think could do best with a slow deterioration here are Australia, Ireland, Norway and Sweden. They don't rely too heavily on the US. They each have other attributes that I buy into and that I have written about before.

I also buy into emerging markets over a longer period of time but here, as I mentioned yesterday, I want diversification within this part of the market. While I have no Chilean exposure now it is a country that I believe in and will probably buy back into. They rely on exporting copper, similar to Brazil which I also own but with less juice than Chile. I buy into China for the long term, China is obviously a buyer of copper as opposed to a seller. I have written several times about Vietnam which I've described as being in its own world, as are a lot of frontier markets.

There are plenty of other countries that I own for clients and at anytime one of them could offer a lot of return, like Spain last year, but the ones above seem to me to be intellectually the most promising. However each will have disappointments along the way that will seem like surprises but I think of all of them as multi year themes. I would be hardpressed to guess what country will do the best this year but the way I manage I don't have to.