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The legendary emerging-markets trailblazer Mark Mobius on bargain hunting, regrets and his next chapter

Mark Mobius, who has just retired as executive chairman of Templeton Emerging Markets Group, will continue to scour the globe for investment nuggets, but now he will do it at his own pace.

Justin Chin/Bloomberg

Before his retirement party last week in Singapore, legendary emerging-markets trailblazer Mark Mobius informed his colleagues at Franklin Templeton Investments that he had no interest in a gold watch, or any other retirement gifts. Instead, he rustled up 140 items he had collected from his 30 years of near-constant globetrotting as the head of the firm's emerging-markets operation and gave them to his friends and co-workers who came to the party – two gifts for each of his 70 guests.

"In the Chinese tradition, the eldest gives the lai see, the 'lucky packets,' to everybody," he said.

The gift-giving reversal speaks partly to Dr. Mobius's closeness to the people he has worked and travelled the world with for years. Having never married, he has long considered the job as his spouse and his Templeton Emerging Markets team as his family.

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It also speaks partly to his fondness for Asian beliefs and traditions. Indeed, his famous personal trademark – his gleaming bald head, which he has been shaving for decades, long before it became fashionable – came about after he lost his hair in an apartment fire and a colleague told him about a Chinese superstition that bald men are destined for wealth.

But perhaps more than anything, it's a statement that even as he officially retired from Franklin Templeton on Jan. 31, at the age of 81, the charismatic founding father of emerging-markets investment funds isn't about to stop working – or even slow down much.

"The word 'retired' is not very appealing to me," said Dr. Mobius (PhD, economics and political science, MIT) in an interview this week from his office in Singapore. "I've got such a pile of things that I've wanted to do over the years that I didn't have time to do with Franklin Templeton.

"I'm starting a new career."

He wants to write more books, adding to the dozen or so he has already penned over the past 45 years. He wants to take a deep research dive into environmental, social and governance (ESG) investing issues, to determine how the presence or absence of strong ESG policies in emerging-market companies relates to their financial and stock performance. He wants to spend more time in some of the corners of the world that have been underrepresented in his decades of scouring the globe for investment nuggets, most notably in Africa.

For example, he said, "I'd like to spend more time in Nigeria. It's such a dynamic economy that's moving very fast. It's just exciting to witness it. It's not an easy place to get around, it's kind of chaotic, but it's really something to be involved in."

It's that kind of drive and curiosity that made Dr. Mobius famous in his three decades at Franklin Templeton, where he took the company's emerging-markets business from next to nothing to a globe-spanning powerhouse that today has nearly US$30-billion of assets under management. His approach has always involved a prodigious travel schedule: For years he has spent about two-thirds of his time on the road, investigating investment opportunities with his own eyes and ears – making the company's private jet more than earn its keep.

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His appetite for travel, especially to exotic, remote parts of the world, has made Dr. Mobius a uniquely romantic, even mysterious, figure in the world of investment-fund management. It helps that he has a name that sounds like a spy-movie villain and he looks the part: Compact, elegantly athletic (he works out daily), with his shaved head, sharply tailored suits (often white) and an intense gleam in his eye. His hard-to-define accent is one of an international citizen: American-born to a German father and a Puerto Rican mother, Dr. Mobius is a German citizen who has home bases in Singapore and Hong Kong – when he's not travelling through places such as Cape Town, or Moscow, or Rio de Janeiro.

He has no plans to curtail his wanderlust now that he's hung up his Templeton spurs.

"I'll be travelling as much as I always did. I enjoy travel," he said. "And in order to get answers to some of this stuff, you've really got to get your feet wet."

Indeed, feet-on-the-ground research has always been the defining characteristic of Dr. Mobius's approach to emerging-markets investing. In the late 1980s, when Dr. Mobius was in his early days of building the Templeton Emerging Markets Fund, there wasn't much choice; the countries the fund was going to weren't the kind of places you could easily invest in remotely. Communications and information technologies were nothing like they are today, especially in the developing world where he was operating. Many of the major emerging markets in today's investing marketplace – in China, Russia, Latin America, Africa – were under totalitarian regimes with limited access to international investors. Many other investment markets were laughably primitive.

"I remember being in Turkey when [the stock market] traded one day a week. The trading was done in a little room, with a guy sitting at a desk, calling out the name of each stock, and then people waving their hands and making bids. That was it."

By immersing himself in these markets, Dr. Mobius was able to get access to and intelligence on investment opportunities that few others had at the time. But it certainly wasn't without its risks – both to the business and to himself. He weathered several property scandals in Hong Kong; the hyperinflation in Brazil and Argentina in the late 1980s and early 1990s; the "Asian contagion" currency crisis of 1997. He has been carjacked at gunpoint in Brazil, and literally ducked bullets during a military coup in the Philippines.

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It was often chaotic – but a kind of chaos that Dr. Mobius has come to embrace.

"You get used to it. You look forward to it, in some ways."

Of course, emerging markets have grown up a lot since those early days. Many countries have adopted market economies, financial institutions and rules of law that have made them more predictable and less risky places to do business. And the advances of technology have revolutionized emerging-markets investing, making information and computerized trading instantly accessible from desktops half a world away.

"It is lower risk – in the sense that there is more liquidity, and more choices," he said. "You are able to be diversified."

But the emerging-markets landscape has become a lot more crowded over the years; where Templeton was once almost alone in pursuing investments in some of these countries, it now has plenty of competition. In particular, the marketplace has seen an explosion of exchange-traded funds, offering typical retail investors easy access to stock markets in emerging economies that offer much higher growth potential than advanced Western markets.

"The one big change, obviously, has been the internet – you can get incredible amounts of information," he said. "[In the old days] I had the advantage … We were getting information that other people were not necessarily getting. That has changed, dramatically."

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But he firmly believes that there is still great value in getting on the ground in these countries, talking with business managers, witnessing their operations first-hand, and thus uncovering hidden gems. He noted that because most ETFs focus on the larger-capitalized, highly liquid stocks that make up the stock indexes in each country, many smaller stocks are flying under the radar of the big ETF money – companies on which a Google search still won't tell you much.

"The good news is that the number of stocks out there has increased dramatically. Even though there may be more information, the ability for us to find things that other people have not necessarily seen is good," he said. "Thousands of small stocks are just completely ignored [by ETFs] … In China, there are about 3,000 small and medium stocks that are not covered by any researcher."

"There are still opportunities for us to find bargains."

Indeed, bargain-hunting has always been at the core of his success at Templeton. But he admits, on reflecting on his career, that sticking too rigidly to his value approach has resulted in some significant missed opportunities. If he had to do it all over again, "I probably would have been more flexible," he said.

"We were always talking about 'What's the P/E, what's the price-to-book,' without really looking further forward. The result was that we missed out on a lot of companies that turned out to be very fast-moving … The whole internet and tech arena, when you looked at it from a value perspective, it looked expensive. But if you looked further, and used more imagination, you would have gotten more winners."

As for his own future travels, Dr. Mobius said there will be a few differences from his hectic Franklin Templeton schedule. For one thing, he plans to linger longer in each location for a better look around and some deeper research, now that he's not tied to a corporate timetable. For another, the private jet stays with the company. "I go commercial now."

He's learned some good travel tips through his decades of near-constant travel – many of them remarkably mundane coming from someone with such an exotic lifestyle, a reminder that no matter who you are, flying around the world is a grind. Among his favourites: Spend the money to get high-quality luggage that will last and protect your belongings; always have plastic bags with you to keep potentially leaky items from making a mess of everything; and get to the airport well ahead of your trip and work from the airport lounge, rather than arriving in a panicked rush.

Oh, and if you're not flying on a private jet, he strongly recommends choosing your airlines carefully.

"Emirates and Singapore Airlines are the top. American airlines should be avoided at all costs ... all of them."

***

Mark Mobius's advice to the next generation of emerging-markets fund managers who will follow in his footsteps:

  • “Study, study, study. Keep on reading, try to pick up anything you can get your hands on about these countries, and cultures.”
  • “Travel. Go and meet people. There’s nothing like getting out there and talking to people on the ground. That really gives you incredible insights.”
  • “Keep an open mind. Don’t reject things out of hand. Be ready to open your mind to new things.”
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