Posted in Trading on October 3rd, 2016
The following article covers trading financial securities, such as stocks. The world of trading often comes with rises and declines of securities, and most things do not rise or fall in a straight line. By the time this article is published, circumstances involving what we mention may h ave changed. Often, changes in securities can be to the detriment to the traders – seldom is it beneficial. A person should only trade with money that they’re willing to lose because losses are guaranteed. By reading this post, you agree that you’ve read our disclosure.
“But 40 years later, the world is experiencing a historic shift from West to East. The great economic successes since 1969 are certainly not the United States or Europe. In this span, the US went from the largest creditor nation in the world to not just the largest debtor nation in the world, but the largest debtor nation in the history of the world… Today, most major international creditor nations are found in Asia – economies like China, Japan, South Korea, Singapore, Hong Kong and Taiwan.” – Jim Rogers
I really enjoy watching shows about travel. Even better is when I experience the different cultures first hand. Seeing the cultural differences, eating the different foods, drinking with the locals, and seeing how people interact have enriched my life.
Jim Rogers, a macroeconomic investor, is famed for running the Quantum fund with George Soros in the 1970’s. Afterwards, he retired and did a “little” journey around the world on a motorbike. Years later, he traveled again around the world on a custom-made Mercedes-Benz SLK 230 sport convertible. Both times, he set the Guinness World Record. Through his travels, he gained perspective on the trends of the world and investment opportunities that you would not see in CNBC. As he traveled, he saw the changing trends and attitudes. With this knowledge, he was able to take advantage of investment opportunities to grow his personal wealth. As an investor, I believe important investment knowledge can be gained that are not obvious and one must become an astute observer in order to become a great long-term investor.
I believe there are plenty of investment opportunities outside of the US and Europe. Of course we all want to have invested in Apple when it was sub $5 per share. Of course we should have bought on Google’s Dutch auction IPO. Or Amazon’s IPO. Or buy Starbucks when the former founder, Howard Schultz, returned as CEO in 2008. These are opportunities we could have jumped on or missed. If we missed, we need to take perspective that there are more opportunities to make money in investing. Without this perspective, many people lose money in penny stocks and boiler room operations. Many are afraid of missing out and become marks for stock scams. That’s how Wolf of Wall Street, Jordan Belfort, made his millions bilking people by selling junk stocks and went to jail because of it.
Intelligent investors can avoid many pitfalls and invest in quality stocks and foreign investment. Here are some of my observations based on my travels.
Japan has a rich history and a very unique culture that cannot be experienced elsewhere in Asia. Compared to the US, Japan is advanced technologically in many ways. However the stock market has not grown and the government debt burden is increasing every year. During the heyday of 1980’s, Japan’s Nikkei 225 index was riding high but has become stagnant since then with the index still around half of the all time high. Investment will be difficult with the negative interest rates, high debt to GDP ratio over 229%, increasing elderly population, and Fukushima nuclear plant disaster that is still seeping radiation.
However, I really enjoy travelling to Japan. Japan has a rich history, which some consider to be brutal and oppressive to other Asian nations. However, the people are interesting, very polite, and passionate. If you go to a department store, you are greeted with bows from uniformed greeters at the entrance. It is their job to just greet. Something that would be out of place in the US.
Another time when I visited Japan in the early 2000’s, I walked through a building courtyard in Shinjuku one evening. The unemployment there was still pretty high and there were many homeless people in the city. However, the homeless there that would sleep in the courtyard had their bedrolls all lined up in rows and cleaned up in the morning. Very unexpected and I have not seen this type of homelessness in any other country.
One of my favorite experiences was to go to a baseball game in Japan. I was surprised that the fans have their own band in the outfield stands, and the fans sing/chant original songs for each home player at bat. Again, a very unique, Japanese experience. I highly recommend people to spend several days there as a layover for a long vacation.
People don’t realize that China used to have a democratic government. However, through a civil war, communism prevailed in mainland China and the ousted democratic government fled to the island of Taiwan. Taiwan flourished and now it is technical powerhouse. Taiwan probably has some of the best dim sum around. The famous restaurant chain, Din Tai Fung, started in Tai’pei, the capital of Taiwan. The workers there at the restaurant are paid much higher salary than some technology and factory companies, where young teenagers opt to work instead of going to university.
Not as developed as Japan, Taiwan has some unique characteristics, small growing population, and the youth tend to be very fashionable. With a tense relationship with mainland China, it may be difficult to see any investment opportunities. However, I believe there are still opportunities there with Taiwan’s debt to GDP at around 32%.
It is one of the cheapest vacations I’ve ever experienced. I can find local hotels that cost me around $20 per night. You can take a cab, while they may not really understand you, the cab will drive through thick traffic and may take you the long way, but you still only pay less than $10 for the hour-long ride. There are many tourist traps, but one can experience authentic Thailand through careful research on the internet. The food is great and cheap, especially the seafood in coastal areas like Phuket.
Although there is some political instability due to corruption and military martial law, Thailand can still grow and expand their economic reach.
I highly recommend travel to Asia, experiencing the vast cultures and possibly developing some investment ideas. An intelligent investor will research with due diligence before investing. This may include domestic and foreign investment. One may consider investing in ETFs that invest in foreign companies, instead of directly investing in foreign stock exchanges.
Vietnam is becoming an interesting country for me. VNM price action is volatile but seems to trend higher since the January lows. For me, VNM is a long term investment.
Disclaimer: This is not a stock/investment recommendation and I do own some shares. Consult your financial advisor for any investment advice.