Faber: I am surprised nobody mentioned India today. The world is changing. In the past 10 to 15 years there has been a huge shift in the balance of economic power. The Western world still regards itself as the dominant economic force, but auto sales and oil consumption, for instance, are larger today in emerging economies. India added over a hundred million mobile phones last year. It has a billion people, 70% of whom live in the countryside. I have been going to India since 1973, and not much changed until about 10 years ago. Today, because the economy has become much more market-oriented, you drive through the villages and people have businesses and shops.

The typical international portfolio manager has 60% or 70% of his clients' money in America and 30% or 40% overseas. Maybe 10% or 20% is in emerging markets. That doesn't mean he should sell all his U.S. and European holdings and buy emerging markets, because the U.S. now is relatively inexpensive compared to other markets. But we are living in a new world where emerging economies no longer are the poor cousins of rich countries, although their per capita income remains much lower.

But this isn't a revelation. Emerging markets did spectacularly well last year.

Faber: Still, many people think of emerging economies as relatively small, when in fact, they are larger than the developed world.

Cohen: It is not just the size, it's the growth rate. In physics, mass times velocity equals momentum. The mass of the BRIC nations [Brazil, Russia, India and China], their GDP, has been increasing. In the past eight to 10 years, the BRICs probably contributed far more to aggregate incremental global GDP growth than the U.S. did.

People said similar things before the Asian financial crisis of 1997-98.

Faber: That crisis was predictable, as Asia's emerging economies had to finance their current-account deficits with foreign money. When the foreigners balked, no more credit flowed in, and whole economies and currencies collapsed. Today we don't have current-account deficits in emerging economies. We have current-account surpluses. Sure, rapidly growing economies have setbacks, but investors should find ways to invest in countries such as India and China.

David Fuller's view India has been one of Fullermoney's favourite stock markets since 2Q 2003, along with Asian emerging markets and resources markets generally. However, investors should always remember that emerging markets (I prefer the term progressing) remain high-beta and they have never uncoupled from any significant downturn on Wall Street.

A number of interesting shares are mentioned in this interview.