Source: Bloomberg

Turkish stocks started the New York trading day down (ticker: TUR) but rose after President Erdogan’s White House meeting with President Trump.

Turkey has 12% inflation, a stagnant economy, and a big external borrowing requirement, and its political system is bitterly divided after the April constitutional referendum vote denounced by opposition parties as fraudulent.

But the Turkish ETF is e up 26% year-to-date in dollar terms, the best result of any emerging market ETF. Turkish stocks are cheap, Turkey stands to benefit from its position as the Western terminus of China’s New Silk Road, and Turkish stocks are cheap, trading at nine times earnings.

Erdogan may be a brutal dictator, but he is a brutal dictator who will gauge his changes carefully and ultimately deal with Russia and the US to contain the Syrian mess.