This article originally appeared on Jan. 27, 2014, on RealMoney.com. To read more content like this plus see inside Jim Cramer's multimillion-dollar portfolio for FREE... Click Here NOW.
"Don't wait for extraordinary opportunities. Seize common occasions and make them great. Weak men wait for opportunities; strong men make them." -- Orison Swett Marten
The early turmoil in the New Year from emerging markets hit domestic equities hard last week and U.S. markets had their worst performance on a weekly basis since June 2012. Emerging market currencies had their biggest selloff in five years and volatility from these regions could continue for a while.
Emerging market pullbacks are being triggered by uncertainty around the Federal Reserve's operations to start to remove liquidity from the market and concerns around slowing Chinese growth. This turmoil has started to shake some of the complacency out of a market that had been on 'auto pilot' for quite some time.
I think investors needed a bit of a wake-up call as the returns the market bequeathed them in the previous 12 months were simply unsustainable. The rally in 2013 carried equities about 30% higher in only an approximately 5% yearly rise in earnings.
With the Federal Reserve finally set to start the 'taper', having this sort of multiple expansion continuing into 2014 was a bit of a pipe dream. My belief is that emerging markets still have a ways to pull back but at some point in the near future they will provide a great long-term entry point.
I also believe big iron and copper miners as well as other commodity plays could remain under pressure. Prudent investors should make a list of solid blue-chip plays that should remain unperturbed with additional emerging market turmoil. Here are a couple of these that sell significantly under the market multiple and have good dividend yields as well. Adding some shares if the downturn continues looks like an attractive strategy right now.