Chapter Six

Researching Emerging Markets

Always Keep an Open Mind

In emerging markets, I am continually reminded of the need for independent research and careful checking of what company managers, brokers, and researchers tell me. You must also constantly be aware not only of the influences and biases that impact their thinking but also those influences and biases affecting you. These influences and biases are strongest in the places where one spends the most time and from where we obtain the most information.

For this reason, it is important to keep an open mind and read news and research reports originating from all over the world and from different sources. You must try your best to exercise a great deal of objectivity in your analysis of all the relevant data, so that local or foreign, company-specific, country-specific, or industry-specific data may be given appropriate weighting.

“A verbal promise isn’t worth the paper it’s written on.”

—Samuel Goldwyn

There must be an ability and a willingness for the emerging markets investor to obtain information from all relevant sources, whether they’re local or international sources. In other words, total reliance cannot be placed on just local information or on only foreign information.

The four best sources of information for emerging markets investors are:

1. The staff of a company in which you are considering an investment.

2. The staff of the company’s competitors.

3. The audited financial statements.

4. The company’s customers. ...

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