Mexican Beauties Still Hold Allure

Holidays such as Thanksgiving create markers and memories in our lives. We see people we haven't seen for a while and mark the passage of time accordingly. Reflection can be good for the soul and bad for the digestion.

So it is with the impending end of the calendar year, a time when various financial scribblers summarize what has happened, discuss why it was bound to have happened and look ahead to what they think will happen. I hate these year-end reviews. What can you do with the information provided after the fact that the top-returning stock market for a given year was Mauritius', as was the case in 2002? Go ahead, park your life savings in some guano-encrusted rock pile; see if anyone sympathizes with you.

Mexico Revisited

Let's review the stellar performance of Mexican stocks over the last 16 months. Since I last discussed Mexico in August 2004, the total return of the Bolsa index has been 81.9% in dollar terms; the comparable return for the Russell 3000 has been 19.9%. The degree of outperformance by the Mexican market, marked on the chart below, is rather breathtaking. Moves of this magnitude seldom are sustainable for long periods.

Inflation and the Peso

...