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Too far too fast?
Old 10-05-2005, 10:22 AM   #1
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Too far too fast?

I decided to put a small bet with some play money on my Eastern Euro theme about a month and a half ago. The fund has a high exp ratio but it was one of the few choices available. It is now up about 19% since I bought it. I need to hold at least 3 months so the short-term trading fee is waived. Any opinions when something jumps that fast? I did not really intend to hold this puppy for the long haul b/c of the expenses plus the majority of my emerging mkt exposure is in VEIEX.
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Re: Too far too fast?
Old 10-05-2005, 10:23 AM   #2
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Re: Too far too fast?

How much is the short term trading fee?
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Re: Too far too fast?
Old 10-05-2005, 10:25 AM   #3
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Re: Too far too fast?

Think it is 2% so enough for me to avoid it
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Re: Too far too fast?
Old 10-05-2005, 10:53 AM   #4
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Re: Too far too fast?

Quote:
Originally Posted by wildcat
It is now up about 19% since I bought it.* I need to hold at least 3 months so the short-term trading fee is waived.* Any opinions when something jumps that fast?
I've been steadily rebalancing a mutual fund that's behaved like that. When you hit the three-month point you may want to sell half this year, and sell the other half next year.
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Re: Too far too fast?
Old 10-06-2005, 08:14 AM   #5
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Re: Too far too fast?

Wildcat
I did the same thing. I put money into CEE about a month ago. It shot up 45% by Tues. 5% over NAV. But yesterday it dropped 10%.

I like Eastern Europe because it seems less connected to the US than other EM areas. I also hold VEIEX (as the EFT) but it has less than than 5% in eastern Europe. My plan is to hold both long term. I think if CEE goes up 100% or goes way over NAV by christmas, I will rebalance. What are you thinking?
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Re: Too far too fast?
Old 10-06-2005, 11:16 AM   #6
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Re: Too far too fast?

Well, just from a qualitative perspective EE and the Med region is relatively new to the business world unlike China and India (everyone is well aware of both stories).* Additionally, I think China and India both have more speculative prices built into current levels.* Investment is flowing into the EE area.* Doors are still being open.* Stability is still fresh.* I think many of the EE countries will try to be like Western Europe in terms of capitalism but are not plagued by the red tape and old traditions of other countries.*

The fund I own is pretty heavy in Turkey, Egyt, Russia (the contrarian bet) and some other small EE countries.* You correctly pointed out that a huge move in returns in these particular markets wouldn't do jack to an emerging market index b/c of the light exposure.

I haven't decided on my next move.* I will probably hold b/c my position is light and I still the theme stands + my position is small. I will also agree with you that it has been up even when VEIEX is down so maybe it is a nice diversifier for time being.
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