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Archive for September, 2007

Money Magazine 35th year


Pretty interesting collection of articles. The shift of global wealth to emerging economy and energy producing countries will mean we as American will get less share of the consumption than we do now. This is already happening as price depression slows down as the emerging economy catches up in wages. We are seeing USD denominated food prices such as corn or hogs going up because of increase demand in Asia. Inevitably we Americans are going to have less share of the global resource. So, starting snap up some 82 Lafite and vintage Patek. Their prices have nowhere to go but up.
This present an interesting investment strategy. For the past few years if I measure my portfolio on absolute dollar amount, I did pretty well. But when I measure my portfolio against Euros (since there is no Mark and Franc now), it’s did inline with inflation. Someone needs to come up with a new benchmark for performance. Real estate will remain the biggest investment that wage earning individual will make, reflecting choice of live style. Those who can, will be able to afford high price that real estate will demand. Those who can’t, will get stuck in area will stale home prices. Company with expertise that emerging lack will attract interest from sovereign investments (i.e. UK bank with emerging market focus, Canadian Energy Company, Australian mining company, etc ).

In the short term, liquidity from Asia will keep US and the world economy afloat. These money will fuel the craziness in Asian market for a while. I am probably looking at wrapping up my Asian positions by Christmas. Canada which welcomes foreign investment remain an attractive location if energy and commodity remains at present level. Ex China and India emerging market will prosper from trading out their natural resource but have a hard time fighting for human and other natural resource to grow. I will continue to leave 60% of my investment international and 40% US with shifted focus on large multi national companies like P&G. Small caps will be outperformed as it won’t be able to leverage the globalization trend. So I’ll probably totally getting rid of them by Christmas.

Waste water and emission control related company will become the next biotech, as more consumption will force tighter regulation, forcing evangelist to pour money into so call innovation. Really, it’s no different from RR, auto, airline, radio, TV, internet, etc. Emission trading will become highly profitable business in a few years (much like Chinese garment quota trading in HK). Since they are still relatively unknown, I need to do more homework on them…

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