From FT Alphaville:
Out of one bubble and right into the next. John Auther earlier this week pondered whether the stampede towards emerging markets following the Fed’s gift to stock markets was just creating another thing to go pop down the line.
Now Jonathan Garner at Morgan Stanley, which has been leading the charge on economic decoupling of emerging markets from the US, has gone a bit cold as well. Holding a tiger — let alone a dragon — by the tail is a recipe for an exhilarating ride, but potentially lethal should it turn and bite, he notes in a report which advises investors to take some profits at this stage.
This is what happens when everyone suddenly agrees with you - the bulls are suddenly feeling nervous now they seem to be occupying consensus ground. The MSCI Emerging Markets index is up 23 per cent since Garner advised investors to pile in back in August, hitting a new all-time high earlier this week....MORE