“It’s frightening, they’re talking about communism. It scares any investor.” Mark Mobius, probably the best-known emerging markets investor in the world, is very used to dealing with political regimes that are corrupt, incompetent, or both. But in his latest interview with London’s Evening Standard newspaper, he reveals that it’s not the government in a developing nation that’s unnerving him – instead, it’s the contenders for power in the US and the UK. Mobius is unimpressed by both Labour leader Jeremy Corbyn, and popular US Democrat Alexandria Ocasio-Cortez.
His concerns about Corbyn’s talk of nationalising key industries may stem from bitter experience of investing in Venezuela. As soon as Hugo Chávez came to power in 1999, notes interviewer Mark Shapland, the 82-year-old investor sold his holdings in a local electricity utility to American energy firm AES. “As soon as he came in I started listening to what he was saying, I thought he’s gonna take over everything.” AES later had to sell out “at a big loss”. Mobius is looking for investments in fast-growing Romania, but he’s “lost faith” in Turkey under Recep Erdogan. Meanwhile, despite a penchant for contrarian investing, he’s also avoiding Argentina, notes Colby Smith on FT Alphaville.
The situation in the inflation-stricken economy “is quite dire”, says Mobius. “Quality of life has declined, education levels have gone down… people can only take so much.”