Bloomberg News/Landov
‘I’m much more cautious. There could be a substantial correction in the markets... these short-term corrections can be quite dramatic.’
Dramatic, as in up to a 40% haircut in the stock market, according to veteran emerging-markets investor Mark Mobius.
“I’m not predicting that, I’m just saying we’ve got to be ready for that,” Mobius told CNBC in an interview Wednesday following his similar warning last month. “The catalyst I believe will come from continuing increases in interest rates. The (Federal Reserve) is definitely moving in that direction. When the Fed moves, everybody else has got to move in that direction.”
Mobius, pointing to the vulnerability of the long-in-the-tooth bull market, also didn’t rule out the potential impact of geopolitical flare-ups on equities, saying that “any event could also be a trigger.”
Watch this clip from the interview:
After announcing his retirement from earlier this year, Mobius now plans to dive back into the investment game with Mobius Capital Partners.
“I wasn’t ready to retire and I was ready for something new after 30 years at Franklin Templeton,” Mobius explained to Bloomberg Television. “With all this money going in ETFs and passives, there is a real role for active management where we go into companies and we try to achieve change.”
Mobius, in his new position, will run a concentrated portfolio of about 25 stocks, and will invest in India, China, Latin America and frontier markets.
At last check, the Dow Jones Industrial Average and S&P 500 index were slightly lower.