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Monty’s Latest From Hong Kong

Monty’s Latest From Hong Kong

Traveling in Asia as I am currently doing, always reminds me of the huge changes taking place in the world in general and in Asia in particular.

Industrial societies are a very recent development in the history of the world and have existed only for about 300 years.  Alan Greenspan pointed out in his new book that he had been very lucky to take the reins of the Federal Reserve at a time of great productivity growth and economic expansion globally. He certainly was lucky, and all of us living today have been quite lucky to live in an age with such rapid economic progress taking place.

I am not saying that there have not been, and will not continue to be challenges.  There have been, and will be many.  I am saying that we have met the challenges relatively well….The Berlin Wall has fallen.  More people live in freedom than at any time in history.  More people are enjoying the fruits of economic growth.  A great many enjoy a quality of life that their ancestors could not even have imagined.

The challenges of today are the challenges of identifying what will happen and preparing oneself and ones family to survive and prosper.  Adapting to these challenges and using them to further one’s personal well-being and the society’s growth and development, is in our opinion, the key.  We believe that from an investment point of view Asia will play a big role in the future investment priorities of those desiring to maintain and grow their assets.

ASIA TODAY…SELF CONFIDENT AND SELF DEPENDENT

The Asia I visit today is a far different place from the continent that I first visited in 1965.  At that time, and even as recently as ten years ago, Asia looked to the West, especially Britain and the U.S. to determine its place in the world.

Today, China and India are confident they have entered the world stage as major players in the modern economic and political drama and both are proving to be very skilled actors.

As I visit people in China, Hong Kong, India and many smaller Asian nations I encounter a knowledge that their day in the sun is dawning.  They are concerned with economic growth and also with their political power.  They are not yet concerned with their military power.  I believe that they currently do not want global military power, but rather military power to protect what they see as their local interests.

Many prominent Asians that I speak with believe that global military power is a huge burden.  They understand that global military reach must not outstrip the economic power of its wielder.  When it does, military adventures soon bankrupt the powerful nation and lead to that nation’s loss of power.

Rome, Imperial Britain and many others have trod that path and to many in Asia the U.S. is now making the same mistake.  They are not anxious to make it themselves…Russia is another matter, and all of us must remain alert for the rise of an aggressive Russia…but I digress, Asia is confident, active and growing very fast. The developed nations are becoming aware of the breadth of the liquidity and fast growth of the Chinese, Hong Kong and Indian stock markets, and we expect to see a continued migration of global investment funds to these markets.

WHAT ARE WE DOING OVER HERE?

We are meeting with companies doing research for future investment, and continuing to communicate with companies in which we have already invested.  We meet with analysts who cover companies in specific industries where we have an interest and we meet with economists to give a direction to our research by helping us to determine which sectors of the local economies currently have tailwinds to growth, and which sectors will have tailwinds in the future.  I will write more about Asia on my return, which should be about October 1st.

Please review last week commentary which contains information that we wanted to review.


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