Monday, February 13, 2012

Keynes, Templeton and Rogers were all right about this market - NASDAQ

John Maynard Keynes is credited with the line, "the market can stay irrational a lot longer than you can remain solvent." He's just the oldest of three thinkers -- Keynes, John Templeton, and Jim Rogers -- whose advice should be heeded in today's markets.

Rogers is the youngest of the group, and the most bearish. He has warned that there is a " 100% chance " of another financial crisis, one that will be much worse than 2008.

Since March 2009, the stock market has been on a liquidity-induced rally, one that has nearly doubled the Standard & Poors 500 since its 683.38 low. These advances have come despite declining growth in the United States, China, India, Brazil and Europe.  Sovereign debt ratings downgrades and warnings litter the globe, and a wide variety of investment indexes dropped in 2011.

What does all this mean? That there are now great buys in the stock market, particularly in emerging nations.

To explain that, we must look to Sir John Templeton, the middle man of our trio and the legendary investor who founded the Templeton mutual fund family. Templeton achieved his first fortune by purchasing 100 shares of every company in the stock market for less than a dollar per share in 1939. Within four years, he made profits well into the triple figures.

Templeton advised investors to "see the investment world as an ocean and buy where you get the most value for your money." He believed in diverse investments, and that "bull markets are born in pessimism."

As the ups and downs of 2012 continue, keep your eyes on the emerging markets, and be ready to invest when the opportunities appear.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


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Jim Rogers

Warren Buffett

Nouriel Roubini