ICing on the BRIC

Implications: 1. China and India are two of the fastest growing markets and turbulence is expected. 2. Ups and downs form stock theatrics in any stockmarket.

Analysis: China and India are not only fastest growing economies but also most volatile.Among the BRIC countries (BRICc) Indian stockmarket is the oldest with longstanding infrastructure and has seen many a rainy day. China's stockmarket is relatively new.

However, China has had a headstart among the BRICc in emerging as a economic powerhouse.However the other three have played catch up since and have been creating ripples in the worldmarkets. China and India with a billion population each have got the potential to be voracious economies and will take a long time to digest and thus provide an opportunity for other developed economies to participate in their growth. Countries rich in resources such as Australia have got a readymade opportunity.An ideal setting for a marriage between the resources bull and the resources bear.

Thus, what Mobius is seeing is an opportunity in the resources sector and resources consuming sectors of both China and India.Both present long term possibilities. 

But there is a caveat. Mineral resources have age limitations. Will iron have the capacity to meet the requirements of the BRIC?If not what then.Just as oil there is an urgent need to find a substitute for iron and steel ( I am not joking) any restrictions on consumption will not help. Even if power and energy are supplied through nuclear reactors they are still dependant on uranium and thorium which have limited life span.Maybe water and solar energy is the only way out.

Therefore any investments in the resources sector will not only have to factor that in but also the price of the commodities which will form the main driving force. Price increases as resources deplete.

Bargains can only be had at a price.