The Top Markets Right Now

When asked why he robbed banks, gangster Willie Sutton gave a simple and obvious answer. "'Cause that," he said, "is where the money is."

Now, unless you're Bernie Madoff or Raj Rajaratnam, there aren't too many parallels between investing and criminal activity, but Sutton's observation is still applicable. Put simply, you can't make money unless there's money to be made.

What this means for you
Consider, for example, the U.S. airline industry. Southwest (NYSE: LUV  ) excepted, it's where good money goes to die:

Company

No.  of Years It's Turned a Profit Since 2005

Accumulated Profits (Losses) Since 2005

AMR

2

($3.3 billion)

Continental

2

($218 million)

Delta (NYSE: DAL  )

1

($18.5 billion)

JetBlue

2

($32 million)

Southwest

4

$1.8 billion

UAL (Nasdaq: UAUA  )

2

($3.7 billion)

US Airways

2

($2.1 billion)

Data from Capital IQ.

As you might expect, investors in this space have done poorly as well:

Company

Return Since 2005

AMR

(33%)

Continental

24%

Delta

Incalculable due to bankruptcy

JetBlue

(65%)

Southwest

(29%)

UAL

Incalculable due to bankruptcy

US Airways

Incalculable due to bankruptcy

Data from Capital IQ.

All of this is to say that if you're looking to make money in the stock market, you -- as even Warren Buffett learned during a star-crossed experience with US Airways -- should stay away from the U.S. airline industry. There's just not a lot of money to be made here for long-term, business-focused investors.

On the flipside
Contrast that with emerging markets such as China and India. China's GDP is expected to grow between 8% and 9% in 2010 and India's between 7% and 8%. In other words, there's a lot of money to be made in these markets next year and beyond -- so that's where you want to be investing.

It's why YUM! Brands (NYSE: YUM  ) has already expanded aggressively in China and recently announced plans to accelerate its expansion in India. It's why JPMorgan is predicting that emerging markets will "surge" in 2010. It's why Warren Buffett and Charlie Munger decided to buy shares of Chinese battery maker BYD for Berkshire Hathaway. It's why companies such as IBM (NYSE: IBM  ) , Cisco (Nasdaq: CSCO  ) , and General Electric (NYSE: GE  ) are sending over their top engineers to compete for power projects.

And it's why famed Fidelity Special Situations fund manager Anthony Bolton, a man who earned near 20% annually over a 28-year career, is coming out of retirement to launch a China fund.

But I'll let him tell you about that
The Bolton news is particularly interesting. After all, this was a man who had a phenomenal career and needs to do nothing more to burnish his reputation or financial security. Yet as he wrote in a recent Financial Times editorial, he sees something in China that he's never seen before:

I recently spent three months based in Fidelity's Hong Kong office. ... After a few weeks there, I said to my wife that the exciting opportunities available in China, and my belief that the market could go a lot higher over the next few years, made me wish I was still managing money. Rather to my surprise, she said that as I only had one life I should consider running a fund again while I still had the opportunity.

Further, Bolton (as I do) agrees with the assessment by Goldman Sachs' Jim O'Neill that "What is going on in China remains ... the most remarkable and important story of our, and possibly our children's, generation."

Put it all together, and emerging markets today present a once-in-a-lifetime opportunity that is prompting at least one of the world's top money managers to redirect his life's course! Given all of that information, I have to ask: Are you investing in emerging markets this year?

You may not be
Many individual American investors are scared away from emerging markets by their volatility, cultural differences, and inconsistent accounting standards. These are reasonable fears, but they should not make you miss out on the incredible profit opportunities that emerging markets offer today.

This is why we launched our Motley Fool Global Gains international stock research service: To help more American investors get comfortable investing in these top markets. Our team travels the world to meet with companies and investors and we recommend two stocks each month for you to buy. And we're pretty good at that: Our picks over the past year have returned more than 71% on average, making us the Fool's top-performing team of analysts (against some serious competition)!

If you're interested in seeing the stocks we're picking today, you're in luck. We just returned from trips to China and India with five top ideas. They're all yours if you simply click here to sample Global Gains free for 30 days.

Already a member of Global Gains? Log in at the top of this page.

Tim Hanson is co-advisor of Motley Fool Global Gains. He owns shares of Berkshire Hathaway. Berkshire Hathaway is a Motley Fool Stock Advisor and an Inside Value recommendation. The Fool owns shares of Berkshire Hathaway. The Fool's disclosure policy dances like no one is watching.


Read/Post Comments (21) | Recommend This Article (31)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 18, 2009, at 9:51 PM, velodad wrote:

    I have been entrusted by several of my relatives to organize what we call the "Family Fund". Kind of an investment club. The age of the heads of houshold represented, range from my son at 30 to grandpa at 94. We started in 1985 by buying and fixing and holding rental properties. a flurry of rather successful commodity futures trading from 1993 to 2002. All along the way, some profits have been moved into blue chip stocks and some bonds.

    Around 2005 we began to get into more small caps including some "off-shore" companies, (VALE, DNN, BHP, ALU, STP, SEED, CX).

    We currently own stock in 52 mostly American companies. With the Foolish community and my broker advising us to get into emerging markets, we began to look at what we had. To our suprise.. we found that 44 of our 52 mostly American stocks had substantial activities in emerging markets (especially China)! With GE, XOM, SUN, MO, TINY, RIG, PWE, MON, ORCL, HERO, JNJ, HPQ, GS, C, F, DOW, CPRT, COP, AAPL, TXT, UTX, AA in our portfolio.. we ARE ALREADY globally invested!

    So rather than put our eggs in foreign baskets.. we hold some baskets that contain a some foreign eggs.

    ps. We just sold our SEED as a 3-bagger and bought more TGB and CPST.

  • Report this Comment On December 18, 2009, at 9:54 PM, velodad wrote:

    I have been entrusted by several of my relatives to organize what we call the "Family Fund". Kind of an investment club. The age of the heads of houshold represented, range from my son at 30 to grandpa at 94. We started in 1985 by buying and fixing and holding rental properties. a flurry of rather successful commodity futures trading from 1993 to 2002. All along the way, some profits have been moved into blue chip stocks and some bonds.

    Around 2005 we began to get into more small caps including some "off-shore" companies, (VALE, DNN, BHP, ALU, STP, SEED, CX).

    We currently own stock in 52 mostly American companies. With the Foolish community and my broker advising us to get into emerging markets, we began to look at what we had. To our suprise.. we found that 44 of our 52 mostly American stocks had substantial activities in emerging markets (especially China)! With GE, XOM, SUN, MO, TINY, RIG, PWE, MON, ORCL, HERO, JNJ, HPQ, GS, C, F, DOW, CPRT, COP, AAPL, TXT, UTX, AA in our portfolio.. we ARE ALREADY globally invested!

    So rather than put our eggs in foreign baskets.. we hold some baskets that contain some foreign eggs.

    ps. We just sold our SEED as a 3-bagger and bought more TGB and CPST.

  • Report this Comment On December 19, 2009, at 1:27 AM, ahberkemeyer wrote:

    I'm tired of every article on Motley Fool ending with yet another advertisement for their premium services. There really is no advice or unbiased research happening anymore, it's all about advertising another premium service.

    I'm not even sure if I can trust the comments on the CAPS service anymore. Am I the only one thinking of this or are others all in the same boat or getting compensated for their comments?

  • Report this Comment On December 19, 2009, at 9:54 AM, graclee wrote:

    I am also tired of the seemingly constant barrage of services pushed on us. It has always seemed as though once you sign up for one service you are inundated with pitches for others! It's not just FOOLS, but also agora financial as well.i would appreciate a little more time spent on investing and a lot less on advertising!!

  • Report this Comment On December 19, 2009, at 11:34 AM, PigletOctopi wrote:

    The water may be free, but someone has to pay for the pipe. The cost of doing business is very expensive, and this site has helped many people get their start in investing without having to pay expensive fees. I, myself got started here years ago and I am very grateful for all I have learned and continue to learn. If it means a few advertisements, so be it.

  • Report this Comment On December 19, 2009, at 11:38 AM, harry1n wrote:

    I share the comments of the previous people. I have dropped most of my investor newsletters as I am annoyed that instead of getting the investment advice you signed up for, you primarily get offers to sign up for more services. I would like to see a little more honesty.

  • Report this Comment On December 19, 2009, at 11:41 AM, Sean7007 wrote:

    Hi fellow fools,

    I subscribed to stock advisr one week ago for the first time and yes i must agree with the previous two comments regarding the barrage of advertisements being pushed at me , I would also like to see more detailed investment reports and less long winded detailed garble, I'll not stick around long if this continues, Thanks.

  • Report this Comment On December 19, 2009, at 11:47 AM, Dogbreath101 wrote:

    Yeah, MF has caved! They began--and gained their credibility--by denigrating paid money managers, telling everyone to "simply invest in good index funds." (They now disavow index funds!) Notwithstanding that they claimed above 85% of all money managers/fund managers failed to beat the S&P 500 index, THEY now offer a huge number of "for fee" services. Couple that with their inability to write an article without referencing Warren Buffett, and, to me, they've just lost their appeal.

    Although they've done a 180 degrees on their investing philosophy, they are quick to criticize companies that "get away from their roots."

  • Report this Comment On December 19, 2009, at 2:39 PM, plange01 wrote:

    with the US just coming up on its first full year in a depression since the 1930's airline and car rental stocks have been living in dreamworld but reality is not far away.a strong sell on all..

  • Report this Comment On December 19, 2009, at 5:35 PM, BigOlDave wrote:

    Agree with most of these comments, especially Sean's lament that he "would also like to see more detailed investment reports and less long winded detailed garble". I go to TMF for investment advice and come away empty-handed.

  • Report this Comment On December 20, 2009, at 10:44 AM, plange01 wrote:

    3 bankruptcys in the works for 2010 .sirius soon to be delisted and long overdue. this one has seen very special treatment by nazdaq but its losses are still growing.next hertz hedge fund controlled and extremely poorly run with huge debt to top it off. after a reprsie in 2009 as car rentals did fair this has already changed and this one wont be able to keep up with huge debt payments.last the one you already know! GM the disgraced automaker living off taxpayers welfare checks.its losses grow by the day with no chance of a change.this one should have been closed months ago but its never to late!!

  • Report this Comment On December 20, 2009, at 2:11 PM, kschneegans wrote:

    I agree with the earlier comment regarding the investment newsletters - TMF as well as others - being a constant ad for additional services. Even once I subscribed to premier services, it continued right along; always another - better - service with the same insight I had expected from the last premium service. I concluded this was no ceaper then the money manager I had used before and the results were no better - yet, the time invested was much less with the money manager. I am in the process of have unsubscribing from all the services.

  • Report this Comment On December 20, 2009, at 11:25 PM, Nachanok wrote:

    This is a fraudulent activity by Motley.Fool by luring us into subscription and ending up with another more lucrative advertisements for another premium services i.e. endless subscriptions for greedy monies. Will you ever reconsider corporate governmance in your foolish organization.

    With my due respect and regards,

    Peter N.

  • Report this Comment On December 21, 2009, at 9:06 AM, ACitizen wrote:

    Ladies and Gentlemen. If you don't like the advertisements then don't read them. Like anything else you have to sort through all the junk to get to the nuggets. About China: The place scares the dickens out of me. A lot of hight speed growth in a country that seems to be growing just for the sake of growing. Real Estate is wild. I understand building are being constructed with no tenants and the finished property is being "flipped" like houses in Las Vagas in 2006. Where is all the funding coming from? If the funding is primarily debt, which I think it is, then what happens when the time comes to start making the interest and principal payments. I am probably too cautious but I think I'll keep my investments in countries a little safer than China.

  • Report this Comment On December 21, 2009, at 1:21 PM, 123spot wrote:

    Thank you MF for your ongoing public service to the investing community and "community" as an idea. And Merry Christmas , Happy Hannukah, and Happy Pagan Winetrfest to all. "May the God of your choosing bless you" (Kinky Friedman).

  • Report this Comment On December 21, 2009, at 3:41 PM, plange01 wrote:

    with the US just closing in on its first full year in a depression since the 1930's airline and car rental stocks have been living in dreamword!rising fuel costs,declining use will get worse over the next few years...

  • Report this Comment On December 24, 2009, at 10:01 AM, patos72 wrote:

    I am like many of your subcribers annoyed at the constant pitch for more services. Happy Holidays anyway.

  • Report this Comment On December 24, 2009, at 7:57 PM, Bonefish100 wrote:

    If you want to see what is going to happen to the China real estate market, take a look at Dubai.

    I had the wonderful experience of buying a TMF Chinese stock recommendation two years ago. It lost 50% of its value and never came back, due to the corrupt government in place in that country.

    I'll stay with US stocks, thank you.

    Also, TMF, like our current congress, may be shooting itself in the foot with its aggressive bait and switch practices...there's always a new publication right around the corner after telling us that what we just subscribed to would be the best ever.

  • Report this Comment On December 25, 2009, at 5:07 AM, XMFNJDevil wrote:

    Private Broker = $$$$$$$$$

    Investors Business Daily/Financial Times = $$$$$$

    TMF Premium Stuf = $$$$

    TMF Free Stuff = Ads

    It seems that every newsletter article has the same people moaning about this...unsubscribe maybe, or use the search bar at the top or look in the forums and get some information. Have you ever visited any of these financial blogs or things that come up when you Google a stock? They give you some 2 sentence summary and tell you to buy their product as well. This article gives you theory, go do your homework, if you want someone to pick stocks for you call your broker or get a mutual fund or follow Crammer's lightning round picks.

    I have noticed that in the past few months there have been more "picks" in the newsletter articles, and yet you people are still complaining. I think you have unrealistic expectations and need to understand terms like bait and switch before you through them around like a politician. http://en.wikipedia.org/wiki/Bait_and_switch . This is lead in and gives you advice, I do not recall signing up for personalized stocks picks, and each newsletter has a different purpose. It's cross advertising.

    Disclosure: I am a former Fool employee, but was not asked to write anything here.

    And to the fools, perhaps if you just put the lead-ins for the newsletters on the right-side column instead of at the bottom of the article people will stop complaining.

  • Report this Comment On December 27, 2009, at 11:10 AM, Altrael wrote:

    Agree with XMFNJDevil. A little more education and maybe one or two actual nuggets for consideration would do a lot. I frequently never open the e-mail now and I now just skim the top to see what the particular trend IS/IS NOT and never finish the article, knowing what is at the bottom. The intro material does give me ideas for direction for my own research. I subscribe to the SA reports but read the paper version. I informally advise lots of people. I used to send them to the Fool for the educational component, but no longer.

  • Report this Comment On December 29, 2009, at 9:21 AM, clydejazz wrote:

    I know there's a pitch coming with all these articles, but I find them interesting anyway. TMF can't run on donations or tax revenue like PBS.

    Compared to the broker I had, TMF is a good deal, with much better analysis and track record.

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