Mark Mobius is widely regarded as the world’s top emerging markets investment guru. On a trip to Dubai, he talks exclusively to Arabian Business about the sell-offs in 2014, why he thinks media gets it wrong, and his faith in Middle Eastern stocks.
Much like the strip that bears his name, Dr Mark Mobius’s career seems never-ending. Variously dubbed ‘the Bald Eagle’, ‘the Pied Piper of emerging markets’ and ‘the Indiana Jones of the investment world’, the executive chairman of Franklin Templeton Emerging Markets Group has spent the last 25 years steadily circumnavigating the globe, hunting out stock picks in developing countries.
In that period, the assets under his management have leapt from $100m to over $45bn (Franklin Templeton’s full assets under management sit at $882bn), while Mobius’s own ethos and eccentric lifestyle have passed into legend. The sprightly 77-year-old splits his time between the iguana-skin bedecked cabin of a Gulfstream business jet (bought by Frankin Templeton from a Saudi jeweller), the factories of some of the planet’s fastest-growing corporates, and the treadmill of the local business hotel. Mobius has no particular home base (he gave up his US passport and reverted to a German one to make travelling easier) and no family. In short, he has dedicated his life to finding out the best bargains in emerging markets.
Visiting Dubai for a rare full week on the ground, Mobius is dressed in his trademark all-white outfit. When questioned as to where he has spent the last couple of months, he laughs before reeling off most of the countries in Latin America and sub-Saharan Africa. So given his exhausting schedule — where he spends around 200 days a year in the air — how long can he go on for?
“One of the great things about our business is that as long as your brain is working, you get better as you grow older,” he says. “As long as you don’t become too conservative, as long as you keep an open mind, you can probably do a better job because you’ve got that experience.
“So you can go on into your 80s — John Templeton [the man who founded one half of Franklin Templeton and who originally hired Mobius] went on until he was 80 plus.”
In order to work out which companies make the best investments, a typical day will see Mobius and his team visit anywhere between three to eight firms. Each company will already have been vetted solidly by the Franklin Templeton team, who will try and draw up a five-year record of audited reports. Each visit takes roughly two hours, and includes interviews with management.
“The kind of questions we ask are, how do you count your earnings, and what is your plan for the future?” Mobius says. “Body language is also a good reason to do person-to-person interviews, and you can see where they are, what the factory looks like, so you can read a lot into what’s happening. Obviously the company is going to try and give you the best picture, so you have to talk to other people as well.”
Mobius may have a few more years left in him, but the opening months of 2014 have undoubtedly provided him with something of a headache. As the US Federal Reserve began its bond-tapering programme, capital flowed out of emerging markets — many of which have huge deficits. The MSCI Emerging Markets Index dropped by over 6 percent at one point in early March, before gaining some ground to stand at 3.6 percent down last week. More than $12bn vanished from emerging markets stock funds in January alone, according to EPFR Global. Combined with the sell-off has been media chatter about a possible hard landing in China, the world’s second-biggest economy.
“I would say that the news flow is very, very short term and can be quite misleading,” Mobius says. “There’s a lot of alarmist talk about China and the fact they’ve had the first bond default. But people don’t look at these things from the local perspective. A simple question would be: ok, China has had a bond default, how many bond defaults has the US had?
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