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Mark Mobius said he was taking shelter in cash while waiting for the tariff turmoil to settle.
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The emerging-markets specialist told Bloomberg that “cash is king.”
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Mobius said the trade chaos could produce bargains, and countries such as India stand to benefit.
A veteran emerging-markets investor said he’s hoarding cash until the dust settles from President Donald Trump’s trade war.
Mark Mobius, the cofounder of Mobius Capital Partners, told Bloomberg TV on Wednesday that Trump had “upset the apple cart” of global trade with his tariffs. “At this stage, cash is king,” he said. “So 95% of my money in the funds are in cash.”
Trump recently rolled out a 10% base tariff on the vast majority of foreign goods entering the US, with a 145% rate on many imports from China, which responded with a 125% tariff on US goods. This has reignited fears of inflation and recession on Wall Street, roiling stocks, bonds, and the dollar this month.
Mobius said he was eyeing some emerging-market stocks in a “very, very careful way,” and expected the US-China trade war to benefit countries such as India.
But he said he didn’t expect to spot clear opportunities and deploy large sums for four to six months, adding that Trump may have struck trade deals by then.
“Right now, we’ve got to keep the cash and be ready to move when the time is right,” he said, adding that any investor earning a risk-free 4% or 5% by holding dollars is “doing quite well.”
Threat and opportunity
Mobius’ comments follow a blog post on his website earlier this month, in which he said, “Now more than ever, cash matters.” “Not because you want to sit on the sidelines, but because it gives you the flexibility to invest when opportunities appear,” he wrote.
The investor, known for investing in countries such as Taiwan, South Korea, and India, also wrote that stocks have been pulled down by “gloomy news headlines” instead of fundamentals. “That’s where value often hides,” he said.
In the blog, he added that a US recession was a “real risk,” but pro-growth policies such as deregulation or corporate tax cuts could temper any downturn.
He added that a global slowdown could occur if “trade tensions ripple through supply chains and consumer demand” — and touted gold as a “reliable hedge.”
Mobius worked at Franklin Templeton for three decades, building the asset manager’s emerging-markets arm into a powerhouse with $40 billion of investments across 70 countries. He founded his firm in 2018.
Mobius isn’t the only investor to dump stocks and dash to cash. Warren Buffett’s Berkshire Hathaway has sold a net $158 billion of stocks over the last two years, fueling a roughly 160% increase in cash, Treasury bills, and other liquid assets to a record $334 billion at the end of December.
Read the original article on Business Insider
