HONG KONG -- Mark Mobius, the famously bald-pated emerging markets fund manager (he once sponsored a broadcast of The King and I on Hong Kong television), has not made as much money as his peers lately but his word still packs a punch.

At an emerging markets conference in Europe Wednesday, Mobius, who manages $12 billion for the

Franklin Templeton

group, warned that global Internet stocks looked like they were peaking. "I think we're nearing the time. That's my guess," he told

Reuters

reporters. "And it will be big ... some stocks will be 90% or 50% down." The story was duly picked up by

CNBC

and contributed to heavy Internet selling in the U.S., where

TheStreet.com Internet Sector

index plunged 7.6%.

It is in Hong Kong, however, that Mobius really holds sway. Net and telecom stocks in Hong Kong fell sharply on Thursday, contributing to a 3.5% drop in the benchmark

Hang Seng

index.

Tom.com

, which this month became the second most popular IPO in Hong Kong history, fell 2.8%. It is now trading 31% below its high. More recent IPO

Sunevision

, which rose 65% from its issue price when it premiered, slipped 6.9%. It is currently still 29% above its issue price, but sinking steadily. As with Tom.com, much of its business is in development. Elsewhere,

Sino-i.com

dropped 15%.

The funny thing is that, in claiming that these and similar stocks had seen their best days, the man famous for upholding Sir John Templeton's tried-and-true method of value investing admitted that he had actually owned Tom.com.

"We like the people behind it and we trusted that they would be able to make a go of it," Mobius told

TheStreet.com

Wednesday. "When the price exploded, all the projections were wiped out. It didn't make sense. We just dumped it."

"I've recently been talking to some of these companies in emerging markets," he continued. "What worries me is that when you talk to these people, there is no mention of earnings."

Fair enough. But why buy Tom.com in the first place when it never made the faintest profit projection? The main site went up only a few months before it went public. Its most attractive asset, according to CEO Carl Chang, will be non-Chinese language sites designed to sell Chinese travel packages and other things Chinese to the rest of the world -- sites which don't even exist yet. In an

interview with

TheStreet.com

last month, Chang declined to provide even rough traffic projections for the non-Chinese language sites.

Templeton's Recent Record: Just Awful

So why'd Mobius buy it?

One clue could lie in Templeton's performance these past few years. Mobius made his name when Templeton had emerging markets largely to itself. Today, the field is crowded, and the old war horse is having trouble keeping up.

The

(TEEMX)

Franklin Templeton Emerging Markets fund has returned less than its fund category average for the past five years. In the past year, it finished 95th out of 98 funds. Similarly, the

(FKPGX)

Templeton Pacific Growth fund has lagged behind the average among Asian funds for five years. Over both one year and five years, it's dead last in its category. For this performance, you have to pay a staggeringly high sales charge of 5.75%.

With returns like these, it's no wonder Mobius would have been so tempted to buy Tom.com, whose IPO was oversubscribed by more than 600 times (demand for shares exceeded supply by 600 times).

Templeton used to be more disciplined than this. In Asia two years ago, Mobius was about the only big manager not gobbling up "red chips," as overvalued shares in Chinese companies incorporated in Hong Kong are known. The Asian financial crisis burst that speculative bubble, but some of Mobius' competitors made heaps of money buying red chips and then dumping them at just the right time. Templeton missed the gravy train completely.

If investors like Mobius are getting wise to trading in and out of companies that talk Internet profits without delivering, the repercussions on the market in Asia could be significant.