Mark Mobius: Markets Ready to Rise, Time to Buy Commodities

Templeton’s Mobius expects inflation, as he sees market 'bouncing along the bottom'

Mark Mobius on the cover of February's Investment Advisor. Mark Mobius on the cover of February's Investment Advisor.

After global markets’ 16% drop over the past few weeks, it’s time for some positive momentum, investment expert Mark Mobius told Bloomberg on Monday. Mobius said he expects commodity prices and stocks to rise, and he doesn’t anticipate that the U.S. will experience a double-dip recession due to the high probability of more economic stimulus.

“At this point, I do think we’re bouncing along the bottom,” said Mobius, in a phone interview with Bloomberg. “For us in equities, it’s particularly good, because people will eventually realize that to beat inflation that’s coming as a result of this higher money supply, we’re going to have to be into equities.”

Mobius, who is based in Hong Kong, is executive chairman of Templeton Asset Management’s emerging-markets group and helps manage about $50 billion in assets.

He anticipates the Federal Reserve to print more money and buy more Treasuries. As a result, Templeton is buying commodity stocks, as it expects raw material prices to rise.

As energy and material stocks have weakened recently, “It’s been an opportunity,” said Mobius in the interview. “With the amount of liquidity coming into the system, commodity prices have to be maintained at higher and higher levels. The trend is very, very clear, and that’s up.”

As other experts foresee a brief rally in the S&P 500 as companies use their cash, Mobius says he remains bullish on the situation in the EU. “I believe the situation in Europe will get better now that they have a facility to bail out these countries,” he said in the interview. “But in the meantime, the loss of confidence has really hit both sides of the Atlantic, and that’s something that’s going to have to wear away as we go forward.”

As for emerging markets, Mobius is particularly interested in consumer stocks, as well as equities in Brazil, China, Indonesia and Russia.

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