An Emerging Opportunity

Published on
September 12th, 2018
Topic
Trading, Debt, Emerging markets
Duration
13 minutes
Asset class
Equities

An Emerging Opportunity

Trade Ideas ·
Featuring Peter Boockvar

Published on: September 12th, 2018 • Duration: 13 minutes • Asset Class: Equities • Topic: Trading, Debt, Emerging markets

Peter Boockvar, chief investment officer at Bleakley Advisory Group and editor of The Boock Report, has a contrarian view on emerging-market debt. In this interview with Justine Underhill, Peter reveals why he believes the sector is oversold and how to take advantage of the opportunity. Filmed on September 11, 2018.

Comments

  • DR
    David R.
    13 September 2018 @ 19:23
    Looks like both this EM bond surge and weak dollar tumble might be for real. Selective EM bonds in local currencies are crushing US stocks in dollars. US stocks up today, but dollar is down more than US stocks are up. So US stocks suck in foreign eyes, and thus the capital flight from US to Europe & Asia could accelerate. Watch out for DXY closing below the H&S neckline and critical support from 94.43 - 94.50. Failure to hold will be a near-term curse for the beleaguered WEAK dollar, which collapsed in latter August and has fallen again the last 6 of 7 days in Sept. This could setup the *possibility* of a major USD crash, especially considering the extremely long USD positioning by specs which, if exited, could crush the dollar. You've been warned, for 4 weeks! Watch your levels and good luck.
  • PB
    Peter B.
    13 September 2018 @ 18:37
    Stay short BNDX
  • MB
    MATTHEW B.
    13 September 2018 @ 05:42
    Given your new trade idea do you still recommend shorting BNDX or would you recommend to cover the short?
    • KS
      Karen S.
      13 September 2018 @ 14:23
      i know, right?
  • DR
    David R.
    12 September 2018 @ 19:01
    Contrary is good. Consensus usually ends up bad. Right on track with this suggestion. Indeed, yesterday Jeffrey Gundlach of DoubleLine wrote, "The dollar is going down, oil is headed for $80 to $90 a barrel, and it is now a good time for emerging-market bonds." And on cue the dollar is tumbling again today, and some EM bonds and currencies are rocketing. But one must be quite selective of EM. One of the Seattle-based firms (for UHNV investors only) has been all over this and earned 55% for its clients in 4 week as of today. The moms & pops are back buying overpriced US markets, while some smart money recently got out of US and is already killing it overseas again, at least for now. Too soon to tell if the worm has totally turned, but some exposure for anyone aggressive makes for a compelling trade. Bravo!
    • DR
      David R.
      12 September 2018 @ 19:02
      https://seekingalpha.com/news/3389555-latest-warnings-bond-king-gundlach
    • PB
      Peter B.
      13 September 2018 @ 18:40
      Thanks
  • MT
    Mark T.
    12 September 2018 @ 18:53
    The soundtrack at the end of the video is horrible.
  • RM
    R M.
    12 September 2018 @ 18:42
    Nice to see contratrian calls on RealVision.
  • bs
    bernard s.
    12 September 2018 @ 16:35
    Silly question but when you buy EMLC, do you get the yield delivered to your brokerage account in the form of cash? Thank you
    • ns
      niall s.
      12 September 2018 @ 17:03
      Yes you do , I just bought so not speaking from experience but that is the case with many similar holdings that I own.
    • ns
      niall s.
      12 September 2018 @ 17:05
      It will be subject to with holding tax which is usually 15% .
  • ns
    niall s.
    12 September 2018 @ 16:26
    The risk reward looks very attractive plus I am sure that Peter does his homework and having done very well from his HCP recommendation with a similar chart pattern , I see no reason not to scale into EMLC in a gradual way , IMO Peter is the star of trade ideas .
    • ns
      niall s.
      12 September 2018 @ 16:28
      Plus they usually come with a juicy dividend which does no harm at all.
    • DR
      David R.
      12 September 2018 @ 18:47
      Yep, and dollar bulls will be crushed again by being long the garbage greenback. DXY was recently >97, 96, 95, 94 now..... Watch the H&S neckline around 94.5, a close below that means it's going to 91 (high probability) and then possibly to new lows in the 80s. Note the DXY failed to reach back even to a minimal 99 in its bear-market rally, pathetic. Stay short the WEAK dollar; that "strong dollar" propaganda has been nonsense for 22 months per the charts - and wrong as DXY has tumbled from ~104 then to ~94 currently. I don't care or know much about fundies, but the upcoming leftward/socialist lurch in the upcoming US elections and Trump impeachment could trash the dollar - and the overpriced US stocks. Look back to 1973-1982: ten years of economic hell for USA... a repeat in the making perhaps?
    • PB
      Peter B.
      13 September 2018 @ 18:41
      Thanks!
    • PB
      Peter B.
      13 September 2018 @ 18:55
      Thanks!
  • SH
    Steve H.
    12 September 2018 @ 15:54
    Maybe it's bottoming, maybe it isn't; all we can say at the moment is that it's still in a downtrend. From a technical perspective, I'd need to see chart evidence of stabilisation and potential reversal before committing.
  • AM
    Andrew M.
    12 September 2018 @ 13:26
    Time to buy would be when the Fed reverses course. We are a long way from there. But even then I think other assets (gold and gold miners) could do even better.
  • sm
    stephane m.
    12 September 2018 @ 10:40
    Trying to catch a falling knife anyone?!??!? No way it's going back to 19$ in 12 month...
    • AM
      Andrew M.
      12 September 2018 @ 13:24
      Not while the Fed keeps hiking and it's balance sheet wind down actually accelerates next month. Fundamentals might be better, sure, but it won't matter imo. It's all about flows. Those carry trades are likely going to continue to unwind as $ liquidity dries up and UST yields rise. Why take the risk when you can get 2% on a 1 month T-bill, risk free? Not to mention Brazil, Poland, Columbia, Russia, Chile (top holdings in the ETF) could still face a big reckoning.
    • DP
      Devraj P.
      12 September 2018 @ 13:43
      Can you elaborate 1 month T-Bill trade details please?
    • MP
      Máté P.
      12 September 2018 @ 20:55
      What he means is that 1 month Treasury bill yields are over 2%, which is close to being as liquid as cash. I'm going with a mix of 1-3-6 month T-bills. The surge on the short-end of the curve and USD strengthening basically allows an EU investor (like myself) to achieve an outstanding return without much risk. I very much believe that the milkshake theory holds and we're going to get to a stronger USD by the end of the year (around 1.12). Considering you bought into it early 2018, when EURUSD was above 1.20, you can easily get a 10% return while being flexible and sitting in cash basically.

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