Emerging markets are dirt cheap. Are you ready to back up the truck and load up?

Not unless you're fronting the capital for me!

It's true that emerging market stocks are almost universally shunned, which smacks of a classic contrarian set up.


The valuations can't be beat, either. Take Russian stocks, for instance. They're trading for less than five times forward earnings. (That's more than a 70% discount to U.S. stocks.)

However, cheaper prices can always get cheaper still. And we certainly don't want to fight the downward price momentum.

The good news? We should be getting extremely close to the bottom. At least, based on history.

I say that because during previous crises, whenever price-to-book ratios dipped below 1.5, emerging market stock prices rallied shortly thereafter. And sure enough, we just breached that critical level.Please share this article