As I begin my last two weeks as a professional emerging markets investor, I decided to write a series of commentary on each region explaining my views towards investing in them and my analysis of where they are going.
In this 1st edition, I will comment on Asia ex-China & Japan. The next edition will move on to Russia and China because they must be viewed together given their communist past. From there we will go be geographically continuous and comment on the Middle East and Africa. Finally Latin America. This should keep me busy for two weeks and not ranting about something in the U.S.A.
I love traveling to Asia. I took my 1st trip there over 30 years ago and still remember the gloriousness of waking up at 2 a.m. with jet lag and enjoying watching Hong Kong harbor (Causeway Bay) wake up starting around 4 a.m. Of course, what woke them up might have been the U.S. aircraft carrier that went through the harbor all lit up at 3 a.m.
What I love about Asia is that when you are there, it is so different from the U.S. you know you are in a foreign country and you need to be a humble observer.
I don't really have any advice for any one of these countries. They all need to maintain their savings rates that drive their standard of living and work on becoming true democracies. Singapore is Asia's version of Los Angeles and a great place to get over jet lag. Malaysia is a rock of stability, but I do hope that Anwar Ibraham gets a chance to lead the country, but I fear he is getting too old and the establishment has won as far it goes with him.
Thailand needs to figure out its politics and that is an important place to follow the money. Indonesia was one of the 1st places I went to in 1983 and it still fascinates me. I still hope to travel it end to end. i don't understand why they limited natural resources exports when they need to figure out a way to maintain balanced growth and bring down the level of debt. They also need to stop burning the rain forest and polluting the air of the region.
The Philippines is also a steady performer and every foreign investor's favorite place at the moment. Korea just keeps keeping on, but I don't invest there because the nut cases who lead the North keep getting nuttier and nuttier; and who knows what they might do.
Finally, India. Overcoming the caste system and creating a true pluralistic state is still a challenge. In many ways a successful democracy, it still cannot insure the safety of women and a clean environment. It has many challenges even after overcoming many challenges and surprising me with its success of the last 20 years. It is a fascinating country, but I have no desire to be a tourist there although my wife still wants to visit Pondicherry; I may yet be there again.
All in all, non-Japan/China Asia faces a challenge of creating and maintaining real democracy while maintaining a high level of savings. Fortunately, most of the countries here have a family focus and value education for their children. This means stability for the most part and one needs to focus on the global economy and valuation for the attractiveness of investments.
Onto China/Russia when I am motivated.
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