Emerging Markets 101: How to Invest Amid Geopolitical Uncertainty

Episode #318 | July 10, 2023

Episode #318 | July 10, 2023

Emerging Markets 101: How to Invest Amid Geopolitical Uncertainty

In This Episode

On this week's Stansberry Investor Hour, Dan and Corey are joined by Paul Podolsky. Paul previously worked as a strategist for Bridgewater Associates – one of the largest hedge funds in the world – for nearly 16 years. Now, he's the founder of Still Press, an author, and the host of the Things I Didn't Learn in School podcast.

But first, Dan and Corey discuss Ben & Jerry's recent tweet about "stolen Indigenous land," as well as the broader implications for businesses engaging in political activism. They explore the potential impact on market performance, consumer behavior, and the overall perception of companies like Target, Disney, Starbucks, Unilever, and Anheuser-Busch. As Corey explains...

When it comes to stock prices and business, politicizing [products that don't] need to be politicized generally doesn't work out too well.

After that, the conversation briefly shifts, and they discuss how it's becoming more difficult to accurately predict market reactions based on current sentiment the longer inflation persists.

Paul then joins the conversation to highlight his experiences at Bridgewater under billionaire investor Ray Dalio and share insights on the second-largest economy in the world, China. He emphasizes that whether or not people choose to invest in China, the country will still be a major player. Its economic growth has had a significant impact on the global market, and the volatility of its growth has influenced economic trends worldwide. China's weak post-COVID recovery, for instance, has contributed to the current global inflation ebb. Paul says...

One of the reasons why commodity prices are so weak – inflation is so weak – is because of what's going on with China right now.

Paul advises investors to weigh the potential benefits and risks associated with including Chinese assets in their portfolios. He says Chinese assets can offer positive expected returns and low correlation with other assets, which makes them attractive today. However, Paul draws from his experience with trading Russian assets to inform his views on China. He emphasizes that the future of both China and Russia remains uncertain. While the two countries have made progress in adopting market-based economic systems, questions arise regarding their long-term stability.

Lastly, Paul shares his insights on another potentially lucrative emerging market... Chile. Despite the challenges Chile faces due to political fluctuations, Paul explains how it remains an investable option for those seeking diversification. He questions Chile's economic trajectory and ponders why it hasn't achieved the same level of prosperity as countries like Norway or Australia. By drawing parallels between these countries' structures, he highlights the commonalities: small populations strategically positioned atop a vast reserve of valuable commodities...

Latin America is another part where this global debate over the optimal system is playing out. And Chile is part of it.

As global economic debates continue, it's crucial for investors to carefully evaluate the potential returns and risks of investing in emerging markets. Today's podcast provides some interesting points for investors to consider, so you won't want to miss it.