Morgan Creek Capital’s Mark Yusko,who was recently interviewed on CNBC where he talked about Brazil, China and emerging markets in general, pointed out that the following “killer Ds” will hurt the developed world over the next decade:
- Debt
- Demographics
- Deflation
Yusko then pointed out that it tends to be the opposite case in many emerging markets where you have very low debt, strong demographics (e.g. lots of young people) and inflation (e.g. Brazil is actually in a position to cut interest rates to provide a “good tailwind”). Moreover, emerging markets are up three times the US markets this year and yet everyone is focused on the US markets.
As for the crisis in Brazil, Yusko believes its a tremendous opportunity to buy local companies with revenues in Dollars and costs in Brazilian Real. He also added that China data is not as bad as people think.
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