The Taipan Emerging Market Index is up today 44.2%, a huge gain from last week when it was virtually flat with an uptick of 0.52%. By comparison, this week saw the S&P 500 up 0.9% while the Dow Jones Industrial Average dropped 5.3% as of this writing.
Key
ALL ORDINARIES IDX (ASX: ^AORD) Australia
BSE SENSEX (Bombay: ^BSESN) India
IBOVESPA SAO PAULO (^BVSP) Brazil
EGYPT CMA GENL INDX (Cairo: ^CCSI) Egypt
HANG SENG INDEX (HKSE: ^HSI) Hong Kong
COMPOSITE INDEX (Jakarta: ^JKSE) Jakarta
COMPOSITE INDEX (Kuala Lumpur: ^KLSE) Kuala Lumpar
KOSPI Composite Index (KSE: ^KS11) South Korea
MERVAL BUENOS AIRES (Buenos Aires: ^MERV) Argentina
IPC (Mexico: ^MXX) Mexico
NZX 50 INDEX GROSS (NZSE: ^NZ50) New Zealand
IGBM (Madrid: ^SMSI) Spain
TEL-AV TASE-100 IND (^TA100) Israel
TSEC weighted index (Taiwan: ^TWII) Taiwan
SSE Composite Index (Shanghai: 000001.SS) Shanghai
iShares MSCI South Africa Index (EZA) South Africa
RTSI INDEX (RUS: RTS.RS) Russia
ISHARES MSCI THAILAN (NYSEArca: THD) Thailand
iShares MSCI Turkey Invest Mkt Index (TUR) Turkey
Our index shows one thing clearly. When it comes to Big Media's news rant about wild inflation in emerging markets, you're not getting the full story. Despite double-digit inflation in resource-rich Russia, Kazakhstan and Saudi Arabia, there is still money to be made from the oil, natural gas and other commodities that these countries export to the rest of the world.
The news gap between what you read in Big Media and what our index proves is that inflation impacts the man on the street. Commodities, meanwhile, contribute to the inflation through rising prices that are making investors rich.
With commodities, it's very possible that the gains you realize far outstrip the corrosive effects of inflation.
For example, our big winner today is Hong Kong's Hang Seng Index (HKSE: ^HSI). It was largely driven by gains in coal, oil and shipping. ^HSI is a perfect illustration of what I just mentioned about the disconnect between inflation and market gains in economies fueled by the commodity boom.
If you look at the big winners in the ^HSI, notably oil and shipping, they are the culprits blamed for global inflation. And if you had money in ^HSI, your gains could have been much higher than the rate of inflation -- putting you ahead.
Sure, you're feeling the pain of spiking prices in gas, groceries and utilities. But investors are still making money in emerging markets. Are you?
Have a great weekend.
--Irwin Greenstein
