In Emerging Markets, It Pays To Be Picky

Value investors have to work hard to find the real bargains

Don Reed waxes nostalgic when he talks about the Sixties. But it's not Flower Power or the Summer of Love that brings a wistful tone to his voice. It's reminiscing about how Sir John Templeton, a trailblazer of global investing when most U.S. money managers stuck to America's "Nifty Fifty" blue-chip stocks, forayed abroad and discovered Japan. Although its economy was growing an average 10% a year, the overall price-earnings multiple on the Tokyo stock market hovered at an amazingly low three. "There's nothing like that today," sighs Reed, who as president of Templeton Investment Counsel Inc. also manages more than $4 billion worldwide.

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