Juan Torres on emerging market value investing, China, Indonesia and Taiwan | S08 E06

Emerging market equities are off to a strong start this year, but Juan Torres, Co-PM of Emerging Market Equities at Neuberger Berman, expresses caution, noting that EM hasn't outperformed developed markets for two consecutive years since 2010. While EM appears cheap in relative terms, dispersion exists, with some market segments being very expensive, while the cheapest quintile remains attractive across countries and sectors. The conversation explores whether country-specific factors, like potential MSCI downgrades, drive market behavior more than sector quality. Jake Taylor introduces the concept of "buying the dip" as a trained market behavior, questioning its effectiveness in changing economic environments, referencing a rat experiment to illustrate habitual versus goal-directed investment decisions. The discussion also touches on biases in China and Taiwan.