Executive Chairman, Templeton Emerging Markets Group, part of Franklin Templeton Investments Corp.
HOW I'D INVEST $100,000 RIGHT NOW: Right now, I’d put all of it in emerging markets. Stocks in emerging-market countries have come down by about 10% over the past year and the fundamentals are terrific. Those countries now have better financial statistics than the developed ones—lower debt-to-GDP levels, more foreign currency reserves and they’re growing faster. The stars are all aligned.
BEST INVESTMENT: In our private equity area a couple of years ago, we made 17 times our money in a company called China High Speed Transmission Equipment Group. It makes gears for windmills. General Electric got involved and it went through the roof.
WORST INVESTMENT: An Indonesian company called Asia Pulp and Paper. We probably lost about 25% of what we put in. The family who controlled the company basically took money out and put it into a Cook Island bank that had the same name as a legitimate bank.
MY STRATEGY FOR THE YEAR AHEAD: We continue to seek the best bargains, patiently, and buy more if they go down. Some companies benefit from crises. For example, if an entire industry gets in trouble, you have consolidation, and the strong companies survive and get more market share.
WHAT KEEPS ME AWAKE AT NIGHT: It’s the follow-on from subprime: Some banks are still involved in derivatives in a big way. They’re taking money from the deposit-taking and lending side, and putting it to use by the gamblers. There should be a separation of commercial banking and investment banking, so that banks don’t put their whole balance sheet at risk.
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