Markets open lower today with further fears about the coronavirus despite better than expected jobs data. In our portfolio, Allergan $AGN , our largest holding, is having a great as AbbVie $ABBV registers great earnings. Allergan stock price now depends more on AbbVie's earnings than its own, ahead of the merger. As you know, this is one of our arbitrage play and so far, we can say that it was a good investment, returning a little more than market but with less risk and volatility.
5 Best Countries to Invest in 2020
You can find good investments in any country but in some countries, it is easier to do since the economy is growing faster and the stocks in that country are cheap.
Number 5: Singapore
According the the predictions of Bridgewater Associates, the economy of Singapore will grow by 3.2% per year for this decade. This is higher than the average growth in the developed world. Despite not being a 100% democracy, Singapore has shown economic growth over the past decades. The country is the most innovative in Asia and has a very strong work ethics. If we look at stocks, the average CAPE ratio is 14, which makes it one of the lowest in the developed world. The problem with Singapore is that the market is quite small with only 5 million inhabitants. It will be hard to find a company that is going to conquer the world there.
Number 4: The United States of America
I know that stocks are expensive in the US with the S&P 500 $SPX500 at all time high but because there currently 2600 public companies in the US and if you have a big enough pool, you can most certainly find one or two good fish. The US still has a strong economy compared to the rest of the developed world, it is still more innovative than Europe or Japan. The US is an entrepreneurial capitalist country and companies you will never find companies such as Facebook or Amazon disrupting whole industries in other countries. And in case of recession, the Fed has more room for monetary policies compared to the ECB or BOJ. The main problem is rising government debt, wealth gap and populism.
Number 3: Russia
This is a slow growing economy with low work ethics, high corruption and weak government. Why then is this country third on the list? Because stocks are really cheap in Russia. The CAPE ratio is 7.8. You can find really cheap companies there. Besidee, if $oil prices rises, the economy will grow at a faster rate and this will really boost Russian stocks $RSX . The main risks with Russia is that it is Russia.
Number 4: South Korea
The second most innovative country in Asia after Singapore. It gives us more opportunities than Singapore because it is a bigger country. The expected GDP growth is higher compared to the rest of the developed world. The CAPE ratio in South Korea is 12.7, which means that stocks are really cheap. It has very competitive companies such as Samsung. The main risks are high corruption, big-firm capitalism
Number 5: The People's Republic of China
China will be the largest economy in the world in the coming decades. Stocks in China are really cheap with a PE ratio of 10.9 and CAPE ratio of 15. Now is the time to invest in China. The main risks with China is that the government still has much power on businesses.
I had to make a balance in this video, I cannot include fast growing countries such as India because their stocks are too expensive and couldn't include countries where stocks are cheap such as Spain because the economy is not growing.
Watch the full video on YouTube:
https://www.youtube.com/watch?v=Sg3tMlLUM2M&list=UUPO3uUyoXSaFWG-Ldq1mqEQ
Here's my analysis on the best and worst economies:
https://ishfaaqpeerally.teachable.com/courses/662813/lectures/11892670
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