Mar. 31 - Investors are myopic on emerging markets and that leads to a big distortion in the global allocation of capital, says Jerome Booth, the City investor known for evangelizing developing economies.
Unless you look at have been punished to the start of the CN if thanks to concerns about China's economic -- With me now is a dram based an -- -- of -- matching longest. Imagine markets have been steady treated as a. But no and the price I've written my book precisely because I think people need to rethink the big picture. I think economics very particular finance there is -- prosecution limitations. And in practice people thanked. Limit themselves due to -- finance their candy. So we have a very myopic look so markets and management of Israel and I think there's been a massive distortion to white people view the world. And the result is that ship big distortion in the global allocation of capital. Cushion the damage -- is not just to some. Peripheral. The place they can have a bad it. Is fundamentally a huge -- with a vast majority all of all of people in the -- than the more than half of the economic activists on the planet. And -- all souls of investment opportunities including very safe ones including ones that just safe -- cycle risk free assets in the developed world. The current treatment of imagine Marcus is wrong what should invest is using. Well that's good news and bad news. The bad news is below I criticized finance that I don't have an alternative. The good news is I'll tell you -- tell people to think instead. And really trying use some of the existing areas of knowledge which all the positive things like macro economics and history and politics and I have a checklist. For investors. That they should shall think -- and then of course I've also -- to -- -- -- -- -- a checklist for policy -- just one in developed one -- developing countries and then -- also try and work out what the implications of potential policy changes are going to be for him for investors as well. But you know is there's has mentality many events is just follow what others are doing because they don't know what else to do it. To not. It's not good enough and I think one of the consequences is that all regulatory issues here which -- need to be you know given more priority. I do think the people need to work out we know a lot from behavioral finance known about the mentality of Mosul and all the buses. And we need to compensate for them in the way that we invest in the way that I invest as a regulates its. And give your checklist given what you know now -- giving you a recess win teasing investors to be talking. There money in a matching markets. Well -- to be very diverse and of course that did you -- just. I'm if you are prudent you should find that rove and accuracy you should look good private equity and not listed securities simply because the listed securities are actually smoltz. Confessed to GDP in a lot of economic activity is actually before the list. So I think that's a huge range but I mean you don't have to be risk loving to do emerging markets -- you have to do is have. Liabilities in the future and actually. You've taken an open economy lie to you attack it. Maybe 50% of the goods and services of the pension will want to be buying in twenty years will be priced in emerging markets are not to be invested in emerging markets today. Is actually to be away from -- liabilities. And -- -- and you say that -- implications about a -- of a -- to -- on this very issue and you need to have. A whole new approach to the way we think that liabilities risk the way we asked allocate that the theories we used. It's really not fit for purpose and we need a big rethink tonight I couldn't really say this apartment as possible all right the book. Let me thank you very much -- and they fed talking tests -- magazine along. This is richest.