Ken Heebner, CGM Funds, and Frank Holmes, US Global Investors, discuss emerging markets in the context of the Fed's 50 bps rate cut last week. Both their remarks on the rate cut and emerging markets are noteworthy.
Ken Heebner, CGM Funds: âWell, the emerging market economies are going to continue to have long-term growth. Those are the markets down the most, theyâre down 50, in some places 60 percent and long term they have a bright future. Even Jeremy Grantham, the mega⌠the bear, is saying theyâre almost cheap enough for him to buy. ⌠When heâs ready to buy something, itâs going to go up.â
Frank Holmes, US Global Investors: âWell, I do like the emerging markets and I think if you look at energy names like PetroChina, itâs been just devastated here in stock price and it has a huge upside to get back to basically a healthier equilibrium and P/E ratios. But remember that most of these emerging markets, unlike 10 years ago Erin, they have, like China has $2 trillion of U.S. dollarsâŚso they have a huge (foreign reserve) surpluses to be able to reinvigorate their economies. âŚI totally agree with Ken, this is where growth opportunities lie.â
