Cracking the Emerging Markets Enigma (Financial Management Association Survey and Synthesis Series) - Tapa dura

Andrew Karolyi has a long track record of distinguished scholarship on international financial markets. This important book on the fundamental risks associated with investing in emerging markets shares many of the lessons of his writing. Anyone who cares about investing in emerging markets should consider Karolyi's new framework. This is an especially important book because it lets data and evidence talk loudly and clearly. Cracking the Emerging Markets Enigma provides a practical framework that highlights for asset owners, consultants, and professional asset managers the fundamental risks of investing in emerging markets. Readers will be inspired by the lucid arguments and, as investors, will be better prepared for the next hard decision they will face in the emerging market space. (David Booth, Chairman and Co-CEO, and Eduardo Repetto, Co-CEO and Co-CIO, Dimensional Fund Advisors)

Investing in emerging markets requires a careful analysis of potential risks and benefits that vary greatly from country to country. Informed investors and firms must devise their own system of assessing risk when considering investments in these regions-systems that often omit influential factors and fail to respond flexibly to swiftly changing conditions, be they political, economic, or otherwise.

Cracking the Emerging Markets Enigma outlines a rigorous, comprehensive, and practical framework for evaluating the opportunities and, more importantly, the risks of investing in emerging markets. Built on a foundation of sound research on foreign direct and portfolio capital flows, Andrew Karolyi's proposed system of evaluation incorporates multiple dimensions of the potential risks faced by prospective investors in an empirically coherent framework. These dimensions of risk reflect the uneven quality or fragility of the various institutions designed to assure integrity in capital markets. By distilling these analyses into a numerical scoring system, Karolyi has devised a way to assess emerging markets by different dimensions of risk and across all dimensions together.

This novel assessment framework has been tested in the private sector to great success. Researchers, students, firms, and both seasoned and novice investors are poised to gain a clear understanding of how to evaluate potential investments in emerging markets to maximize profit.