AS HE WALKED briskly inside Suntec Exhibition Centre’s food court, barking into his BlackBerry one minute, posing for a photo the next, then trying to talk to a colleague and reporter simultaneously while checking out the delicacies on display, short, bald, gregarious, witty, extremely fit Dr Mark Mobius looks like a man in a hurry, multi-tasking his way through the day. The 72-year-old emerging-markets pioneer is an instantly recognisable icon in the city state he now calls home. Diners turn around and smile at him. “This smells good,” he says looking at a dim sum stall while checking his email and turning around to begin another conversation. He stares at the food again as if he’d rather devour some if he didn’t have to make a dash for another meeting.

 

Mobius, who manages US$25 billion ($36.1 billion) in funds for Templeton Asset Management, is leading the charge of emerging-markets investors who are betting on a recovery in developed markets, a re-ignition of heady growth in developing markets and the next phase of a bull run in emerging-markets equities. “All the fundamentals are in place for the current rally to continue,” he says. “What we see is a clear decoupling where, even as developed markets remain mired in their economic problems, emerging-market economies in China, India and Brazil are likely to go back to the growth rates of a year ago. We are starting to see an increasing flow of funds into emerging markets in recent weeks.”

 

Templeton is part of US-based investment-management group Franklin Resources Inc, which has US$421 billion in assets under management. Mobius’ emerging-markets group has 39 portfolio managers and analysts in 15 countries. “Emerging markets are very important, strategically and financially, for us as a group,” says Kenneth Lewis, chief financial officer of Franklin Resources in San Mateo, California. “As an icon, and as the face of Templeton in emerging markets, Mark Mobius represents our value approach to investing” around the world. “Mark is a very hands-on guy, very energetic, very proactive, very engaged, always on the phone or on email with everyone in his team,” says Richard Piliero, executive director of Templeton Asset Management in Singapore who works with Mobius on strategic investments like private-equity deals. “It is his ability to look at both the woods and trees that makes him so unique. He has an incredible elephantine memory and can recall which family in Latin America has been involved with what or which family in India is doing what. Anybody who has spent some time with him is in awe.”

 

For his part, Mobius is more comfortable talking about what makes emerging markets the next hot thing. The way he sees it, the case for emerging markets has never been clearer than it is today. Emerging markets have 85% of the world’s population and account for less than 15% of the world’s market capitalisation. They also now account for a big part of the world’s growth. That growth is eventually reflected in stock prices. “Emerging-market companies are growing at three or four times the rate of companies in developed markets,” he says. “Second, their demographics are far better, with younger populations that are becoming increasingly affluent as opposed to ageing populations in developed countries.” Moreover, Mobius says, “In emerging markets today, we have companies with stronger balance sheets compared with those in developed markets. Debt, both government as well as private sector, is lower in emerging markets and foreign exchange reserves are higher.”

 

In late 2001, Goldman Sachs coined the acronym BRIC — for Brazil, Russia, India and China — arguing that the world’s four biggest emerging markets were developing so rapidly that, by 2050, they would eclipse the combined economies of the current richest countries of the world. The BRIC acronym really encapsulated the high-growth, large-markets concept for investors. “People can get their arms around these four countries,” says Mobius. “They can see the growth and transformation that is taking place.” Before the term BRIC was coined, emerging markets, as a generic term that covered everything from Africa to Latin America and Eastern Europe, didn’t quite capture that.

 

“The BRICs are four markets in different geographic regions, each very different from the other,” says Jonathan Garner, emerging-markets strategist for Morgan Stanley in London. Investors are more willing to buy the BRICs concept because they feel they are getting a diversified emerging-markets portfolio, he says.

 

While emerging markets may have growth and the right demographics, they are still considered by many conservative investors in developed markets as a high-risk asset class with corporate governance issues. “My standard response is that US and European markets have high volatility, corporate-governance issues, derivatives, terrible balance sheets and even outright fraud, as in Bernie Madoff’s case,” Mobius laughs.

 

Making a decent case for emerging markets used to be a problem 20 years ago. Not any more. “In fact, emerging markets could teach Americans and Europeans something,” he adds.

 

Mobius constantly navigates treacherous waters and rocky roads in distant lands “because we believe there is value there and because we can make money for our investors, while helping the country or company in which we were investing”. The indefatigable guru who has been shot at in Latin America, left stranded in a middle of a jungle in Africa, threatened in Russia and derided in Asia, is unfazed.

 

Son of a German baker father and a Puerto Rican mother descended from America’s discoverer Christopher Columbus, the New York-born bachelor who has dual German/US citizenship is an odd icon for emerging-market equities. He first arrived in Asia as an exchange student at Kyoto University and graduated with a degree in economics from Massachusetts Institute of Technology in Boston. After stints in advertising and marketing in the US, he landed in Hong Kong in 1967 as a researcher for US agri-giant Monsanto.

 

In 1969, Mobius branched out on his own with a consulting company in Hong Kong, helping Western companies that were coming to Asia. “If a company wanted to come and sell generators in Asia, I’d do a market research report for them,” he says. Then he hit the jackpot with Snoopy dolls. Connie Boucher, a former window dresser for Nieman Marcus in the US, had the idea of a giant colouring book for kids for her company Determined Production. Boucher approached Charles Shultz, creator of the Peanuts comic strip for rights to use his characters in her book that became a hit. Armed with licensing rights for stuffed Snoopy dolls, glasses and paperweights she arrived in Mobius’ office one day, looking for manufacturers in Asia. “I just helped find people who could make stuffed dogs for her,” he recalls.

 

Boucher and Mobius later went into business together trying to sell the merchandise in Asia. “Nobody thought Asians would buy Snoopy because it was a dog,” Mobius says. But Shultz’s characters were so popular that they eventually became bigger than his core consulting business. Yet, stuffed toys were bogging Mobius down. He didn’t see himself selling toys all his life. Eventually, he decided that his Hong Kong Chinese partners were better off selling toys and left to join Vickers da Costa, a UK brokerage whose Hong Kong office was run by Philip Tose.

 

Mobius’ task was to research Hong Kong stocks. Tose went on to set up high-flying investment-banking group Peregrine, which collapsed spectacularly in the aftermath of the Asian crisis in 1998.

 

After a stint as an analyst, Mobius was sent out to open Vicker’s Taiwan office in 1984. Two years later, Vickers, along with several local and foreign banks, helped set up Taiwan’s first investment-management firm, International Investment Trust. “As Vicker’s representative, I sat on IIT’s board, but when its president left suddenly, I was asked to run it,” Mobius says. Under Mobius, IIT listed Taiwan’s first overseas closed-end fund in New York.

 

Until then, Mobius’ own forays into the stock market hadn’t been happy ones. The first stock he invested in while running his industrial-research consultancy was Malaysian owned, Hong Kong-listed Mosbert Group. “It was a high-flying conglomerate whose stock kept shooting up,” Mobius recalls. He and his friends would often talk about it at dinner.

 

Then the stock started to tank. “It became really cheap and that’s when I thought the price had come down to a level where I could make some money when it moved up again.” His consultancy had been doing well and, for the first time, Mobius had spare cash in the bank. “After I invested, Mosbert just kept tanking until it went belly up with huge loans from Moscow Norodny Bank.” It was one of the biggest corporate collapses in Hong Kong in the 1970s. “The episode taught me a lesson,” Mobius says. “I went against my own principle of not investing until you have thoroughly investigated everything.”

 

As a man whose life revolved around research, Mobius had done little or no research on the firm. “Actually, I did call Mosbert to ask them if there was any information I could get aside from their annual report, but the guy hung up,” he recounts.

 

The lesson he learnt from his first investment mistake was never to buy a stock without doing his homework. “I bought the stock on a hot tip from my friends, which was a stupid thing to do.” Mobius lost most of his meagre savings on Mosbert. “Interestingly, a similar scam was repeated with Carrian Group, another mysterious Malaysian firm in the early 1980s,” he recalls. By then, he had wised up. Because he lost so much of his own money in one stock, Mobius says he also learnt a lesson about diversification. If he had been in 20 stocks instead of just one, the collapse of Mosbert would not have hurt him so much. Another lesson he learnt from the episode he says was, just because a stock had come down 60% didn’t mean it was cheap and wouldn’t go to zero.

 

“Every time we buy a stock, I remember Mosbert,” he says. In late 1986, while still at IIT, he got a call from John Templeton, the legendary founder of a value-investment group that bore his name. “He asked me if I was interested in starting a new emerging-markets fund for him,” Mobius recalls. Hong Kong became Templeton’s first office outside the US. In the mid-1990s, Mobius set up an office in Singapore and currently runs his funds from both his Hong Kong and Singapore offices, though he spends more time here.

 

But, the pioneering Templeton Emerging Markets Fund almost faltered just as soon as it was launched. Within months of its launch, global markets crashed in October 1987. Trading on the Hong Kong exchange was suspended for days and markets across Asia took a heavy beating. Moreover, Mobius soon found that growing Templeton’s US$100 million closed-end fund was problematic, so he initiated several open-ended funds in the US, UK and Luxembourg to grow Templeton’s expanding emerging-markets franchise. “Our assets grew very quickly when Templeton merged with Franklin in 1992,” he recalls.

 

Templeton was a strong investment house but Franklin had tremendous marketing prowess and, together, the two became a great fit as Franklin sourced more money for Templeton’s array of funds. “John Templeton was a very frugal man,” Mobius says of his mentor and former boss. “He didn’t like to spend on showy promotions and such but, after the merger, it was like putting two rocket engines on the back of a four-wheel drive. The emerging-markets business just took off.”

 

Emerging markets weren’t always what they are now made out to be. When Mobius started the fund, there were only six emerging markets he could invest in — Hong Kong, Singapore, Malaysia, Thailand, the Philippines and Mexico. “You couldn’t invest in South Korea or Taiwan, China stocks didn’t exist, India was hard to invest in, and Indonesia was really small,” he says. Fortunately for him, a few years before he launched his fund, the International Finance Corp (a unit of the World Bank) had helped coin the term “emerging markets”. Until the late 1980s, the terms used to describe emerging markets were all derogatory. “Under-developed”, “Third World” and “poor” were some of words used to describe non-developed markets. “Who would want to invest in a ‘Poor Countries Fund’ or ‘Under-developed Markets Fund’?” Mobius asks wryly. The term “Emerging Markets” crystallised, in a positive sense, what was happening around the world as undeveloped markets emerged as new stars on the horizon, he says.

 

The investment guru’s interest in developing markets dates back to his student days in MIT, where he wrote a PhD thesis on communications satellites. When he was a student in the 1960s, Mobius recalls, the discussions were about what could be done to get under-developed countries going. “Do you build a steel plant first or the rail road? It was chicken or egg.” By the time his fund was up and running in 1987, there was also the realisation that developing countries needed to open up and move towards more market-oriented systems. “Governments were waking up to the benefits that foreign investments, privatisation and the listing of state assets could bring,” he says. That gave investors like Templeton the impetus they needed because they saw the transformation as well as the interest being generated in emerging markets.

 

A major turning point for Mobius and Templeton was 1993, the year when Asian emerging markets came into their own. The markets in Hong Kong, Singapore, Malaysia, Thailand, Indonesia and the Philippines all more than doubled in just over a year soon after Deng Xiao Peng had walked around Guangdong declaring, “To be rich is glorious.” and vowed to open up China. Stocks went through the roof as global stock gurus like Barton Biggs declared he was “maximum bullish” on Asia and money flooded in. Emerging markets were suddenly an asset class global investors could no longer ignore. By then Mobius had increased his emerging-markets fund’s asset size 50-fold from an initial US$100 million to nearly US$5 billion.

 

Towards the tail end of the 1993 Asian bull run, Mobius’ sister-in-law had invested a big chunk of her family’s savings in his fund. Having gone up 100% in 1993, most emerging markets corrected 30% to 40% in 1994. “If you bought before the 1993 rally began, you were probably doing OK, but if you bought at the top of the market at the end of 1993 you were taking a beating,” says Mobius. “My sister-in-law blamed me for her losses. She wouldn’t let me in my own brother’s home.” Eventually, Mobius charmed his way back in the house, explaining to her and his brother that the downturns were the times when investors needed to pile on to profit from the next upcycle.

 

Yet, his sister-in-law’s losses brought home another lesson — that unsophisticated investors needed to be constantly educated and informed to protect them from financial ruin.

 

By mid-1990s, Templeton had chalked up over US$9 billion in assets under management in emerging markets. The next boom came in early 1997, just before Hong Kong’s handover to China as Beijing-linked “red chips” and Hshares surged to unprecedented heights. Later that year, after the Thai baht’s devaluation, the Asian financial crisis hit the region’s markets hard, wiping out 40% to 50% of many investors’ portfolios. At the time, the bulk of emerging-market funds were invested in Asia. To make matters worse, there were plenty of redemptions from worried investors who had never seen a bear market before.

 

Templeton’s emerging-markets portfolio took a big hammering, being down over 40% at the trough. “We didn’t see the intensity of 1994 sell-down as well as the Asian crisis and were not fully prepared for it,” concedes Mobius. But then again, few fund managers in the region saw the Asian financial crisis turning as bad as it eventually did.

 

Yet, just as it began a slow, gradual recovery, Templeton Emerging Markets Fund ran smack into the late-1999, early-2000 tech bubble. “We saw that one coming and we felt the bubble was getting really ridiculous,” recalls Mobius. Still, he was peeved that few investors listened to him and he watched helplessly as they took money out of emerging-market funds and put them into dotcom stories. “Those dotcom companies had burn rates but no earn rate,” he jokes.

 

Much to his chagrin, there was no shortage of emerging-market companies in Brazil, Mexico and Hong Kong morphing into dotcoms. Eventually, the bubble popped, leaving investors with burnt fingers. The Sept 11 terrorist attacks in 2001 and recession that followed in 2002 dampened investors’ sentiments further.

 

It wasn’t until 2003 that emerging markets came back into their own again, breaking out with new vigour. Templeton went from just five emerging markets to over 50 in 16 years. “We were the pioneers in Latin America, Asia, Eastern Europe, Africa, the Middle East — the first large emerging-markets fund investing in stock markets as they opened their doors,” Mobius says proudly.

 

Though there were others like Capital International, which had a big emerging-markets fund, they were investing mainly institutional money. “We were the first fund, certainly the only public fund, in almost all the major emerging markets in the 1990s,” says Mobius. Templeton’s emerging-markets portfolio ballooned because Mobius was interested in finding new places to invest. “As more money flowed into our funds, we found there wasn’t much to buy in the markets where we were investing, which forced us to look for new markets,” he says.

 

As a pioneer, Templeton had to do a lot of work that today’s emerging-markets investment managers take for granted. “There were no custodian banks in many countries, foreignexchange laws in most places were restrictive. We could bring money in but when we sold, we couldn’t take it out,” Mobius says, counting his figures as he runs through a check list. “We had to continuously chase international banks and regulators on such issues. We spent as much time trying to pry open markets as we did visiting companies and researching stocks.”

 

These days, emerging-markets adventurers can fly in to 50 emerging markets and invest in whatever stock they want. Mobius says when he started, there were obstacles like settlements, custodial issues, foreign exchange and dozens of little things including pesky regulations. “It was a battle every step of the way to open up many of the markets,” he recalls. “In most places, when we first arrived, they had never seen a foreign investor before.” In many markets, until recently, stocks settlements took weeks because back offices just couldn’t cope. “The way we worked was we told people, ‘You’ve got to deliver the securities before we pay you’ and in many countries it was a big issue.”

 

Yet, nothing was difficult after what Templeton went through in Russia. “They ended up with two different exchanges, two custodial systems and two settlement systems. It was just a huge mess, very complicated and very difficult for investors. But we kept at it and we are still there,” says the Templeton guru. Always ready with an anecdote or two, Mobius also recalls his early forays into India and an astonishing experience. “I remember going to India in the 1990s and they had guys carrying huge bags of share certificates on their shoulders or on top of their head,” he says.

 

In the aftermath of the global credit crunch and market meltdown late last year, Templeton went from US$50 billion in assets under management to just US$25 billion in the short span of a few weeks. Some of it was due to stock performance, some of it was the fall in emerging-market currencies and about 18% or so was net redemptions says Mobius. The problem with open-ended funds is that as redemptions start, managers like Templeton need to raise more cash by selling in falling market in anticipation of further redemptions. “It’s funny how most public funds like ours work out as people rush to redeem just at the bottom of the market,” he notes. “They give us the money when the markets are peaking and redeem when they are sinking to new lows.”

 

Though Templeton primarily runs open-ended funds, interestingly, so far, it hasn’t yet had a problem with redemptions. “You’d think with open-ended funds, there might be a problem with liquidity, especially since we are invested in emerging markets after all. But in 1994, during the 1997/98 Asian crisis, after 9/11 and again late last year, every time when markets corrected sharply, we’ve somehow been lucky,” says Mobius. “Sure, we have had redemptions but not to a degree where we are unable to cope.”

 

Over the years, Templeton has worked at educating investors, telling them that the time to buy is when prices are low, or not to panic when markets plunge and if they want to sell, to wait for the upturn. Yet, the reality is that not everyone gets it. Nervous investors, however sophisticated or educated they might be, are still inclined to press the panic-sell button at the first sign of trouble.

 

Another reason Templeton’s performance has at times lagged its peers is that Mobius is loath to keep a lot of cash. That means when the markets are really down and out, as they were in early March or last November, he was unable to go out and buy cheap, beaten-down stocks. “Our position is that our investors give us the money to invest,” he explains. “That doesn’t mean we are going to throw money out the window at anything just because we have it. But we realise that water levels rise and valuations rise on the expectations of better earnings down the road.” When it does, he says, investment managers have to revise their limits and sometimes be willing to buy up. “That’s what people are paying us for. They don’t pay us to keep money locked up in the bank,” he says.

 

BEATING BENCHMARKS  

Mobius readily concedes that because he doesn’t have much cash, he can’t go bargain hunting when he should. “The trouble is people take money out and make redemptions at the bottom and give us a tonne of money at the top,” he says. “We are constantly educating investors. Many of our investors understand and are happy to ride through the troughs with us but others don’t.”

 

A key criticism of Templeton is that its emerging-market funds have not always beaten the benchmark MSCI Emerging Markets Index and indeed some of his own peers. But that could be because Templeton’s definition of emerging markets is poles apart from MSCI’s definition.

 

While Mobius regards Hong Kong and Singapore as “emerging markets”, MSCI has graduated the duo to developed-market status because of their high per-capita incomes. Soon, South Korea will move out as well into the developed-market silo. “We look at Singapore and Hong Kong as emerging markets because most companies here are regional and are doing business in Southeast Asia or China,” he says. “We buy China companies H-shares in Hong Kong so it makes no sense to put that under developed markets.”

 

Little wonder, then, that Templeton’s portfolio, while benchmarked against the MSCI Index has tonnes of companies from Singapore and Hong Kong. “It’s not an apples to apples comparison,” says Mobius, who admits when South Korea exits the emerging markets index, the comparison will be even more lopsided.

 

In recent years, Mobius has become a big promoter of Frontier markets — illiquid, smaller, nascent markets like Bangladesh, Mongolia, Vietnam and Kazakhstan. “We have found that investors feel they can get another source of diversification by being in these second-tier emerging markets,” Mobius tells The Edge Singapore. More importantly, he says, investors these days are looking for Alpha or outperformance. “Frontier markets represent an opportunity because they are so cheap and many will eventually graduate to be emerging markets anyway.”

 

Templeton was also an early investor in Vietnam 20 years ago when there were hardly any companies to invest in. Its first investment was a real-estate joint venture with the Vietnamese Army, putting money in buildings leased to foreign companies. “We left Vietnam and last year went back there to start investing in stocks.”

 

Just two weeks ago, Mobius returned from a trip to Mongolia. He has described the country as “the next Saudi Arabia” sandwiched between China and Russia. “Mongolia has uranium, copper, gold and coal, and every mining company in the world wants to be there,” he says. Indeed, he says Mongolia is “a prototype” of what happens when you move from a communist society to a capitalist one.

 

“They had a privatisation programme with everyone getting vouchers. Then they had the big oligarch who wanted buy up all the stuff and control the banks and big companies,” Mobius says. “They are still not quite sure if they should allow foreign exploitation of their mines. But if they aren’t going to, get the infrastructure. It’s a chicken and egg situation. They need infrastructure, but in order to build it, they need to allow foreign participation in mines.” There are several hundred listed companies in Mongolia already but most are hardly traded.

 

How does Templeton pick stocks? “The big difference between us and many of our peers is that we don’t centralise our work,” he explains. Templeton has teams around the world in 15 offices in Latin America, Asia, Eastern Europe, Middle East and Africa. It assigns its analysts on the ground a set of companies.

 

The analysts have four functions. “They analyse companies by looking at balance sheets and cash flows going back five years and going forward with projections over the next several years,” says Mobius. “They also look at industries or sectors. Thirdly, they look at geographical areas so that when we are looking at a phone company in Malaysia we might be comparing it with similar companies in the same region.”

 

They then recommend or pick stocks for the emerging-markets portfolio. “The key is a very thorough company analysis,” says Mobius. “We take pride in being value investors, essentially looking for good companies that are relatively cheap.”

 

Once the analysts have done their work, they email it to colleagues in their own region and another set of colleagues who might be covering a similar stock in another region. After a round of comments from other colleagues the analysts set a fair value for the stock. “We have a fairly collaborative team with guys from India talking to people in Hong Kong or Latin America,” says Mobius.

 

In between, the analyst will meet the company and interview the management. “We never buy stocks until we have met the management of the company or at least spoken to them over the phone a few times.” Every Tuesday, Mobius does a conference call bringing analysts from around the world together for their input. Only then might the stock make it to the action list. Mobius also stresses that Templeton only buys below its own fair-value price.

 

Mobius says the lesson he learnt from his personal investment mistake with Mosbert was that there is “no short cut” to thoroughly researching companies on his investment radar. “We don’t listen to brokers who might be touting one stock or the other. We don’t like broker tips. We might get research from brokers and brokers sometimes help introduce us to a company or set appointments but the lessons we have learnt is that we need to do our own homework and not trust anyone.”

 

Detractors say that managers like Mobius are far too focused on outperforming benchmark indices instead of just making money for their clients. “I think it is a very valid argument, but all the consultants tell investors that they need to outperform the index because how else would they measure the performance of the asset manager? In a way, the index is the herd, so, if you want to beat the herd, you follow the herd. But I agree it is a big problem with our asset-management industry. I hope, increasingly, investors will tell us that they want absolute returns and make as much money as they can rather than beat some index.

 

In the aftermath of the market meltdown late last year, Mobius earlier this year was one of the first to predict that a powerful emerging- markets rally would result from all the fiscal- stimulus packages that were being rolled out around the world. At the time, global markets were in tailspin and touched the bottom in early March.

Why does he think the current rally in emerging markets is a new bull-market rally rather than a bear-market rally? “Quite simply, the flow of money,” he says. “Governments around the world have been printing so much money and spending so much that it has to eventually trickle down to stock markets.” Indeed, because the real growth is in emerging markets like India, China, Brazil and others, that’s where the flow of funds will eventually end up. “You have to realise that central banks and policymakers around the world have been worried mostly about deflation rather inflation,” he says. “That’s why they have been saying, ‘We will print more money, open the floodgates and get our banks to lend as much as they can and worry about inflation later.’ The way I see it, emerging markets will be a big beneficiary of these anti-deflationary measures that are being put in place.”

 

Mobius says some emerging markets will do better than others. “We think the commodity-driven countries and countries with the right demographics — those with large, young populations that are becoming big consumers — will do well.” That means all the four BRIC markets are much better positioned than other emerging markets because they either have commodities like Brazil and Russia or the right demographics like China and India. “In general, we like emerging-market companies that are exposed to commodities and consumer sectors.”

 

Among the markets he likes right now are South Africa, Turkey, South Korea, Taiwan and Indonesia. “We like the consumer cyclicals because we feel that’s the sector that will move up more,” he says.

 

“As the global economies recover and consumers start to spend, the commodities and consumer sectors benefit. Also, as Indians, Chinese and Brazilians become more prosperous, they are spending more on everything from cars to houses to appliances like washing machines and refrigerators. India and China are likely to grow between 6% and 8% next year and the year after. Moreover, population growth there is decelerating and that means per-capita income is rising rapidly.”

 

For the moment, Templeton’s biggest bets are on stocks like China Mobile, PetroChina and Brazil’s Petrobras. “We first bought all of these years ago very cheaply,” Mobius tells The Edge Singapore. But he says “the dilemma we face as an open-ended fund is that we are getting new money every day and that money needs to be invested, so even though we try to buy undervalued stocks, we are in a way always averaging up in a rising market.

 

As an international open-ended fund manager, Templeton prices everything in US dollars. “Is the US dollar going to become more valuable or less over the long run?” he asks. “The other thing is that you have stock prices that are moving and you have earnings that are moving and, more importantly, expectations of earnings, which ultimately determines the price that is always moving. A good manager tries to determine if those expectations are realistic?”

 

So, where does Mobius think Templeton Emerging Markets will be in five years? “I think there is a good chance we will have at least US$100 billion in assets under management, probably more,” says Mobius. Does the prospect of handling such a large fund worry him? Not really, he says. “To me, it is irrelevant whether we have US$10 billion or US$100 billion under management. We can find plenty of stocks to buy.”

 

The problem, he says, is when he gets huge chunks of money to invest as the markets are rising. The problem is how to deploy funds at the top of market? “As valuations rise, it becomes harder and harder to invest. You try to hold back a few weeks but, if the market continues to move up, you suddenly find yourself under performing,” he says. “For open-ended funds like ours, it is lot harder because money is constantly coming in and going out.”

 

Where does he invest his own money? Owing to compliance reasons, Mobius can’t buy any emerging-market stocks and he’d rather avoid developed markets. “Most of my money is invested in my own funds or in Franklin Resources stock,” he says. So, in a way, he is betting on himself. “I also like to invest in property. I own apartments and houses around the world.”

 

Though home is more often than not a hotel room, he says he has an apartment in Singapore where he keeps all his books and clothes, another in Kuala Lumpur and one in Hong Kong. He also has properties in South Africa and Europe. Indeed, he says, as property prices fall around the world, he is thinking of buying more real-estate assets.

 

Mobius travels 200 to 250 days a year. Until a few months ago, most of the travel was on his private Gulfstream executive jet. He isn’t using it these days because Templeton is in aggressive cost-cutting mode. He says he actually likes flying commercial except when it is inconvenient and involves long layovers and numerous connecting flights. “I just like to get to the destination as quickly as I can and hit the ground running.”

 

The first thing he does when he lands is get into the gym. “Wherever we go, we make sure we stay in a hotel that has a good gym,” says the fitness freak. “The only way to get rid of the jet lag, which is another name for sleep deprivation, is to work out. You need to catch up on sleep. I believe sleep is probably the most undervalued commodity in this world.”

 

And how does he relax? “I work out, ride a bicycle and read a lot of books.” He also likes to watch TV, movies and DVDs. Colleagues say he can remember long movie dialogues and deliver them verbatim with the authenticity of Brad Pitt or Tom Cruise. For now, there is no exit strategy either. “I am not thinking of retiring,” he laughs. “Never. I tell you, I will die with my boots on,” he declares, bursting into more laughter.