Christmas on the Frontier

The U.S. economy is slowing and the EU doesn't sound so hot. Emerging markets? So last year. For intrepid wealth managers and their daring clients, it's time to move on. IPOs from Kenya! Hot issues from Ivory Coast or Bangladesh!

Here and there on the wild investment frontier, stock prices have doubled in 2007, as The Wall Street Journal notes here.

Long overlooked by all but the most intrepid investors, frontier markets are attracting increasing attention in spite of their small size and often patchy infrastructure. In terms of geography, they are a diverse bunch, ranging from quasideveloped markets in Eastern Europe, to oil exporters in the Persian Gulf, to countries in sub-Saharan Africa and beyond.

Bigger and better-known developing markets such as India and China are famous for their rapid economic growth, but a similar process is also unfolding in many out-of-the-way markets. The countries of sub-Saharan Africa, for instance, are projected to grow 6.8% in 2008, according to the International Monetary Fund, while Kazakhstan is set to expand by nearly 8%. Booming commodity prices, growing investment, and efforts to rein in debt have contributed to the rosier picture.

Half a century ago, Brooks Brothers had Paul Brown sketch this Christmas scene from our own, early-1800s frontier. The inspiration, no doubt, was the immense popularity of a Disney mini-series, Davy Crockett.

Good luck, frontier investors. Keep your powder dry, and watch out for bears.

MERRY CHRISTMAS!