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Why stock valuations don't matter much in global emerging markets

Analysts' earnings estimates are all over the place. A better bet for 2019 might be picking the stocks hit hardest this year

Photo: Reuters
Photo: Reuters

Like the Nasdaq, emerging markets are no strangers to booms and busts. Unlike the U.S. market, valuations no longer matter much outside the developed world.  That’s because sell-side analysts’ earnings estimates are unreliable. The 10 per cent correction in the Nasdaq 100 Index in October shouldn’t have surprised U.S. analysts – they’ve been revising down earnings estimates since April, when trade tensions started to brew. No Surprise Sell-side analysts were revising down their earnings growth estimates long before last ...