Musings on Investing

“Emerging Markets” Really Growing Faster?

Nevsun Resources (NSU)

According to the Economist, Ethiopia is among the fastest growing economies in the world, with a growth rate of 7.2%. The USA is “struggling” with a growth rate of mere 2.3%.

The above is, alas, extremely erroneous. Mathematically, you cannot compare growth rates unless they have the same base.

GDP per capita of Ethiopia is US$707. That of the USA is US$57,466. If Ethiopia grows by 7.2%, its GDP per capita will grow by US$51 over the next one year. Over the same period, at a 2.3% growth rate, USA’s GDP per capita will grow by US$1,322.

Contrary to the propaganda, the USA is growing much faster than Ethiopia is; about 2,500% faster.

Over the last three decades, the media, the IMF and the World Bank–through propaganda, virtue-signalling, and political correctness–have convinced the world that the so-called emerging markets are growing faster than the developed world. This simply isn’t true.

I explain this in more details in the speech I gave at PDAC (Toronto):

On investments…

Nevsun Resources (NSU; C$3.82) has received a hostile takeover bid from Lundin Mining and Euro Sun Mining. The offer values NSU at C$5. You should expect NSU to open at close to C$5 when the market opens on 8th May.

NSU has rejected the bid. I am with the management of NSU. In the past, I have written several times about NSU. While the offer for NSU values its cash and Bisha project appropriately at C$1, the offer undervalues Timok project. Lundin has offered C$4 for Timok project. Based on my valuation, I expect to be paid C$6.50 per share for Timok project.

I will happily tender NSU for C$7.50 (C$1 for Bisha project and cash, and C$6.50 for Timok project).

Finally, I will be speaking next week at the International Mining Investment Conference, which will be held in Vancouver (Canada).

Warm regards,

Jayant Bhandari


Disclaimer: All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies. The sole purpose of these musings is to show my thinking process when analyzing a stock, not to provide any recommendation. I will not and cannot be held liable for any actions you take as a result of anything you read here. Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise.

%d bloggers like this: