Don't ignore the bond market when looking at EM equities

It sounds obvious, but I got burned hard in late 2021 / early 2022 by getting too fixated on equity valuations in certain EM countries and ignoring the screaming signals from their local currency bond markets. Rates were pushing higher, but I convinced myself it was 'just inflation' and that the companies I was looking at could weather it. Turns out, higher rates across the curve, especially in some more vulnerable economies, meant a capital flight that equity multiples just couldn't outrun. Should've been looking at the yield differentials and the direction of hot money flows more closely instead of trying to justify my equity picks.

My mistake was treating EM equity and bond markets as separate entities for risk assessment, when they're obviously deeply intertwined, particularly when capital starts flowing out. Missed the memo that the bond guys usually get it first when the macro picture sours. Cost me a significant chunk of change on a few names in LATAM and Southeast Asia before I finally capitulated.