Avoiding the Fool’s Game
People often ask how I time the market. The simple answer is, I don’t. I’ve never believed in timing the market. Trying to guess which way the wind will blow tomorrow is a fool’s game. Markets rise and fall for reasons that don’t always make sense. Those who spend their time predicting daily market swings tend to spend a lot of time being wrong.
Having said that, you still have to be ready to move when the time is right. A couple of weeks ago I mentioned in an interview that my new fund, the Mobius Emerging Opportunities Fund, was holding about 95% in cash. That got more attention than I expected. Some thought it meant that I’d given up on the market. I obviously haven’t. In fact, it’s the opposite. Two weeks later today, we’re down to 60% in cash. That’s just the nature of this business. One moment you’re waiting, the next you find something worth buying.
Our focus has always been on businesses with strong fundamentals. We look at companies of all sizes, but mid-caps tend to be particularly interesting. They’re not always on the radar of big institutional investors, and that’s where we often find value.
By geography, India remains my top market at the moment, despite the fresh tensions with Pakistan. These two countries have had a long and complicated history, and the latest round of friction, while serious, isn’t new. A ceasefire has been announced, which should help ease concerns in the short term. But in my experience, these tensions rarely have a lasting/significant impact on the market itself. At the end of the day the fundamentals tend to matter more in the long run.
What does concern me more is the regulatory red tape. Since our fund is new, we’ve found it slow and difficult to get proper access to the Indian market. The paperwork alone has held us back for months. If India wants to attract more long-term capital, simplifying these processes would go a long way.
Of course, while we continue to look for company and country-specific opportunities, the broader picture still matters. For the US–China trade relationship, things may look more stable on the surface now that some agreements have been reached. But implementation is what really matters and non-tariff barriers will likely remain a sticking point. This isn’t a situation where we can declare the negotiations finished and move on. It will be an ongoing process, with both sides needing to follow through.
So I do expect markets to be choppy for a while. At the end of the day, don’t get caught up in news headlines, do your homework and stay focused on searching for good businesses with strong fundamentals. That's really all that matters when it comes to investing.