“If your time frame is 18 to 24 months, there are a lot of good companies in China that are trading down to near their lowest levels in valuations they’ve been at for a very long time, says former Marine Corps captain Rand Wrighton.
As foreign investors cautiously dip their toes back into Chinese equities, emerging markets manager Rand Wrighton advises them to pay close attention to the Chinese government’s long-term strategic goals, saying it can be on investors’ side, benign or against them.
“A company like Amazon has the rule of law on their side, they have incredible lobbying power, they can withstand an aggressive attack by their own government – and they have, many of them have,” he says. “If your time frame is 18 to 24 months, there are a lot of good companies in China that are trading down to near their lowest levels in valuations they’ve been at for a very long time, with profit margins that are depressed and can recover,” he says.
Wrighton appreciates investors’ hesitancy about emerging markets. However, he says the big returns haven’t come from a handful of technology companies that you could “sit on and ride for a bunch of years”. Rather, it’s about picking your moment.
“You’re learning how to manage your time, you’re learning how to interact and bring different groups together to achieve a common mission,” he says. “You’re having to have hard conversations with people that are not succeeding and ones that you have to replace.”
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