The economists at
Deutsche Bank decided to look beyond the "sexy growth story":
What is important for returns to capital is not growth per se, but rather growth relative to the amount of investment required to achieve that growth.
Click on chart to enlarge, courtesy of
Deutsche Bank.
Of course, it depends on God and pure luck, however:
Bearing all the caveats we listed in mind, we can still draw a few tentative investment conclusions from the analysis. First, the emerging market universe as a whole is not necessarily more attractive for equity investors than the industrial country universe. Second, within EM Latin American markets appear more attractive than other regions, while China appears least attractive. Third, within the industrial country universe the US market seems more attractive than other (notably European) markets. Fourth, the best way to benefit from high emerging market GDP growth is to invest in companies that combine a lean capital structure with a strong exposure to emerging market economies’ demand.
Run, run ... I just do not know how much of Latin American dream is driven by China hunger for resources?
Of course, it depends on God and pure luck, however:
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