"The time to buy is when there's blood in the streets," legendary financier Baron Rothschild declared more than a century ago. The same principle could hold true for times when protesters, police and the army are taking to the streets of Egypt.

The Market Vectors Egypt Index ETF (EGPT) tumbled about 15% in the days following the outbreak of political chaos in the country. But it posed a sharp rally of nearly 8% on Monday as investors regained some confidence.

While plenty of doomsday scenarios are circulating, a more levelheaded look at Egypt suggests that the sell-off could provide a good entry point for investors. Its economy is growing fast and has plenty of room to run. And while apocalyptic predictions prevail, the changes that are likely to be ushered in may in fact help the country's development.

A More Moderate Track Ahead?

With a growth rate of about 6% in 2010, Egypt's economy outpaced all the Gulf states except Qatar, and economists polled by Reuters at the end of last year predicted average gains of another 5.4% in 2011. With a per capita GDP of $2,270 in 2009, Egypt has plenty of room to rise as its economy plays catch-up. Certainly, there's reason to think this process is already well under way: Per capita GDP has roughly doubled from $1,041 over the past five years.

Most headlines, meanwhile, have focused on the possibility of the country slipping into extremist hands if the regime of dictatorial President Hosni Mubarak is displaced. Often mentioned as a contender for power in a post-Mubarak scenario is the Muslim Brotherhood, the country's largest opposition party, which advocates a return to Islamic law.

But the country has better odds of taking a more moderate turn that could boost commercialism. The secular, urbane Mohamed ElBaradei -- the former U.N. International Atomic Energy Agency head and secular democratic opposition leader -- is more likely to emerge as the new face of Egypt than the leader of a radical group.

And while fears of extremist groups taking power are getting more media attention, the bulk of Egypt's population is showing significantly warmer feelings about the U.S. over the last few years.

In 2007, only 11% of Egyptians viewed U.S. influence on their country as "mostly positive," while 59% said it had a "mostly negative" impact, according to a BBC poll. But in June 2009 -- the first survey after President Obama delivered his high-profile speech in Cairo -- positive opinions about U.S. influence had soared to 45%, with negative views at 29%. That puts Egyptian attitudes about the U.S. in the same league as those of the British or French.

The Egyptian stock market, meanwhile, remains cheap. Its trailing price-to-book ratio is approaching levels not seen since 2003, and is well below its average over the last decade. The chaos engulfing Egypt, in other words, provides patient investors with a good opportunity to buy.

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May 29 2011 at 1:36 AM Report abuse rate up rate down Reply

Takeconomics1 - Please stop monopolizing the board with the 3 sec propaganda for the barely able to read, and clueless on the art of critical thinking, comments. Nobody is impressed with your nonsense.

February 02 2011 at 7:01 AM Report abuse rate up rate down Reply

"The time to buy is when there is blood in the streets." The Capitalist System is sick beyond words.

February 02 2011 at 6:52 AM Report abuse -3 rate up rate down Reply

it's call drastic change is needed. and civil war will spark if change don't start soon.
Banks better stop robbing main street or they will see massive demonstrations and withdrawals!!!Fees after fees,penalty after penalties and hiring criminals as they are as shark loaners!!!!

February 02 2011 at 2:17 AM Report abuse +3 rate up rate down Reply
1 reply to setec5354's comment

poeple would rather complain like the ones here than doing appropriate actuin.

February 02 2011 at 2:21 AM Report abuse -2 rate up rate down Reply

I can't believe the ignorance written in these posts. Shame on us Americans, we need more Civics, Political science classes.
We're mever going to go anywhere with this close-minded mentality. More than 60 percent of the world population is non-white. We need to think globally so we can better forsee the future for us at least!

February 02 2011 at 2:17 AM Report abuse -5 rate up rate down Reply

Typical American attitude! Better get there befroe the Chinese!

February 02 2011 at 1:44 AM Report abuse rate up rate down Reply


February 02 2011 at 12:38 AM Report abuse +5 rate up rate down Reply
1 reply to cartra's comment

Obama stated several times that he wanted to fundamentally change America...why was nobody listening?

February 02 2011 at 1:20 AM Report abuse +1 rate up rate down Reply

it takes a sorry piece of dung to profit from someones downfall but I guess we in the U.S. qualify for that move for whatever reason you need to be such an *******!!!!!!!!!!!1

February 01 2011 at 9:06 PM Report abuse rate up rate down Reply

What we need to do is take to the streets and demand changes just like they are doing now in Egypt. The GOP will not lead us out of this recession by cutting spending. Cutting spending will only deepen the recession by taking money out of the pockets of consumers. The fat cats have already gotten a 2 year extension on the Bush tax giveaways to the very wealthiest, and they will demand more of the same, all the while they will ship more jobs overseas and then try to blame it on the opposition party. Ever notice when you call for technical support for your internet service you get someone you can't understand talking to you from India? There are not just manufacturing jobs being shipped overseas, more and more service jobs are going abroad as well. Big business won't even pay the minimum wage to keep the jobs at home. What we have running the country nowadays are robber barons, our elections are so money driven we can't get any honest people elected to make the changes needed. The Tea Party? Forget it, these people are nothing but more of the same GOP folks, only worse.

February 01 2011 at 8:52 PM Report abuse rate up rate down Reply

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February 01 2011 at 4:24 PM Report abuse rate up rate down Reply