Man Who Called Emerging-Market Rout Has a Warning for the Bulls
- Ecstrat's John-Paul Smith has been bearish since late 2010
- Smith sees prospect for economic crises in China and Brazil
Why Emerging Markets Are Having a Bad Few Months
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If John-Paul Smith is right, some of the world’s biggest investors are setting themselves up for a major disappointment.
The London-based strategist, one of few to anticipate the slump in emerging markets that began in 2011, sees no sign of a turnaround and says the current environment resembles that of the late 1990s, when crises in Southeast Asia and Russia roiled the entire asset class. His stance clashes with bullish pronouncements from money managers including BlackRock Inc., Franklin Templeton and Research Affiliates LLC -- an adviser to Pacific Investment Management Co. that predicts developing-nation assets could become the next “trade of a decade.”