Developing the Potential of Emerging Markets : Investing: A talent for finding low-priced, high- potential stocks has made J. Mark Mobius a guru. His latest target: China.

J. Mark Mobius has already circled the globe three times this year in search of low-priced, high-potential stocks.

Such diligence has made Mobius, the 57-year-old president of the $3-billion Templeton Emerging Markets Fund based here, “the guru of emerging markets.”

Mobius has ventured to and invested in new markets in Africa, Asia and South America--always far ahead of other fund managers who are increasingly discovering the potential of developing countries. In recent years, many emerging markets have outperformed those in developed countries.

Mobius’ most recent vehicle is the world’s largest China equity fund, the newly launched Templeton China World Fund, which is designed to exploit the boom in China and Hong Kong.

“We’ve been pretty much on the cutting edge of the public funds of emerging markets,” Mobius said recently over breakfast at the prestigious Mandarin Oriental Hotel, a favorite spot among Hong Kong’s movers and shakers.

“And now with this China fund, it puts us right at the top in terms of the amount of access we’ve had in the past,” he said.

Mobius introduced the first public New York Stock Exchange-listed emerging-markets fund in 1987. Starting with $107 million, the fund is now worth more than $300 million and is one of 21 Templeton funds overseen by Mobius.

Working out of offices in Hong Kong and Singapore, he and his team of analysts search out companies that are undervalued based on Templeton’s investment criteria.

Mobius insists on taking a “bottom up” approach to investment. His Emerging Markets Fund picks companies that are worth buying, not countries.

“We pick those companies which appear to be cheapest in comparison to the company’s own history, to the market and to the world,” he said. “I then visit the country to meet the people involved in the operation.”

Whether he’s looking at an electric company in Turkey or a copper mine in Chile, Mobius refuses to invest until he has examined all aspects of the organization and its management, which requires him to maintain a prodigious work pace and a breathless travel itinerary.

Analysts in Hong Kong speak highly of his approach. “Mark established contacts long before there was a chance of making money in the market,” said Angus Baxter, managing director of securities for Smith New Court Far East Ltd.

“When we first started doing business in Sri Lanka, we found that Mark had been traveling there for the previous eight years, maintaining contacts and keeping an eye on the market,” Baxter said. “He’s a real adventurer and a real pioneer in the emerging markets.”

Bill Ebsworth, managing director of securities for Fidelity Investments Management Ltd. says: “Mark is all over the world because he’s very much a kind of hands-on guy. . . . He does a lot of research, so he knows markets better than anybody else.”

A native New Yorker, Mobius received a Ph.D in economics and political science in 1964 from the Massachusetts Institute of Technology. He got his first taste of the Far East when he studied briefly at Japan’s Kyoto University.

In 1970, he launched his own regional economics and research consulting firm in Hong Kong and, 10 years later, moved into the securities industry, directing operations in India, Indonesia, Taiwan, Thailand, the Philippines and South Korea. He speaks six languages, most of them Far Eastern.

Mobius follows the contrarian investment theories of Sir John Templeton, the group’s founder, who was a pioneer in the Japanese market when it was considered speculative.

“This fund is in line with what Templeton has been doing since the 1950s,” Mobius said. “Most people who are familiar with the company know that we take the long-term approach, and most of them have a lot of confidence in what we’ve done.”

China is Templeton’s new area of opportunity for investors. Fueled by high demand for China-linked stocks, the Templeton China World Fund has raised more than $240 million. The main focus of the fund will be on Chinese company shares listed on stock exchanges in China, Hong Kong and, pending permission of the government, Taiwan.

“We consider China will become the largest equity market in the world if trends continue,” Mobius said. “We feel that it’s impossible for anyone to predict when a market will go down or up, so we focus more on value rather than on timing, and that has placed us in very good stead over the years.”

“Emerging markets are, on the average, growing faster than the developed world,” Mobius said. “People are now able to leapfrog the development processes that industrial England and early America went through because of converging demographic trends and cross-border technological factors that are taking place in the world today.”

Mobius said that the more he travels the more he realizes there are no limits to what a country can achieve given the right political and economic philosophy. But he isn’t deterred by rampant inflation or unstable currencies, because that is when there are often bargains to be had.

He lives out of a suitcase most of the year and has visited almost every developing country in the world. He said he doesn’t mind the life of a nomad.

“My life is my work, so there’s not much time for anything else,” he said. “But I don’t really miss anything, because the scope of Templeton’s activities is so wide that it’s very difficult to be distracted.”