December 1, 2009 by Joshua M Brown
Yes, Iâ??m about to give props to Goldman. Deal with it.
The single biggest, most profitable market call of the last decade was made in 2001 by economist Jim Oâ??Neill, then working at none other than Goldman Sachs. The call was made in Global Economics Paper #66 aka â??Building Better Global Economic BRICsâ? and it marked the original usage of the term â??BRICâ? to describe Brazil, Russia, India and China as a group.
The coining of the term is secondary to the trillions in wealth and world-changing shifts that this paper predicted. Had you heeded Oâ??Neillâ??s work and gotten invested in the stock markets of those four nations, youâ??d have made more money this past decade than by doing virtually anything else conceivable.
from Goldman Sachs Global Economics Research
Oâ??Neill and his fellow researchers concluded way ahead of everyone else that:
This call was bigger and more prescient than any I can think of this decade. It literally encompasses every major theme, from currencies to commodities, from the cost of technology components to the price of a barrel of oil, from the exchange rate of the dollar to the growth rate of the global middle class.
As far as percentage gains, in some instances, weâ??re talking about thousands of percentage points in whole indices!
Congratulations to Goldman Sachs for nailing this story back in 2001 and to anyone who got in and rode the BRIC trade this decade. From where these markets stand today, even after the Credit Crisis, Oâ??Neillâ??s original paper is starting to look like a once-in-a-lifetime call.
Hereâ??s how right GS was, a look at each of the BRIC markets since 2001:
India and China markets since 2001
Russia and Brazil since 2001
Sources:
Unfortunately, I have been unable to locate the actual Paper #66, but hereâ??s a link to Goldman Sachsâ?? BRIC Research Archives, which seems to go back to 2003:
http://www2.goldmansachs.com/ideas/brics/index.html
Read Also:
Emerging Idol: Auditions for BRIC without the â??Râ? (TRB)
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Wow! You gotta give credit where credit is due. GS owns us because they are good and smart.
An apt shout out for the creation of a theme and meme that has become pervasive. It is instructive to trace the evolution of these intellectual constructs and give credit where it is due.
The next step will be determining when the concept is beyond its useful life and is causing decision errors as a result.
[...] Looking back at the biggest market call of the decade. (The Reformed Broker) [...]
[...] Sachs, for first using the term BRIC. If we'd paid attention to him then, we'd all be millionaires.Close Forward this [...]
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