It is an old adage of investment cynics that "managers do not pick markets, markets pick managers." This attitude suggests that brilliance is about evenly distributed, but that markets select their own heroes rather than vice versa. With the construction of investment styles according to the radiation approaches I have described, that limitation is not quite true. Rather, managers can freely roam the world looking for an investment style that suits them a growth manager could have a period of successful investing in the United States, become a non-US manager, and then find a suitable venue in emerging markets: three investment lives all engaged in approximately the same principle. One can invest in all traditional ways and change location, or one can change investment techniques and invest in the same location.
How did you know a growth company in the 1945 and later period? I knew it when I saw it. When I see it again, now, in an emerging market, I say, "this company can compete on a world-wide basis, regardless of the fact that it is ... wherever."
The US style is now flexible, fast and fuzzy. The developed (ex-US) market style is structured, systematic and suited to individual customization. And despite the global economic crisis, emerging markets are the places where there is the greatest potential for growth if we hark back to the high-quality investment styles of yore.
Market students must look geographically outwards to see familiar, repeated patterns and inwards to see what is next.
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