However, managers can get around the difficulties of liquidity with markets that have dual listings. For example, some companies in Argentina, which previously had strict foreign currency exchange controls, were also listed in New York.
“So we could sell in New York if something went wrong,” he said.
Mobius highlighted conviction as one of the most important qualities of a fund manager, alongside inquisitiveness and humility.
“Once you have made a decision, stick with it.”
Mobius admitted that he also feels bad whenever he is going against the grain. However, having conviction on a contrarian view is often what reaps reward.
“To buy when others are despondently selling and to sell where others are greedily buying requires the greatest fortitude that pays the highest rewards.”
He added that managers should be ready to articulate clearly to clients why they hold views that are different from the consensus. “Explain to them the process you go through. How are you disciplined?”
Having a track record of consistent performance, regardless of market ups or downs, will give strong support to the manager’s claims, he added.