Its easy looking back, but there are always classic lessons to be learned, 1929 was not a good year for investors and it took a decade for the primitive wheels of commerce to grind back towards profitability. The capitalist cart had just begun rolling smoothly when Mr. Hitler and his gang of filibusters sprang into view, spilled the beans and spoiled the broth, and dumped the world into a dizzy turmoil. In the back woods, Wall Street was a prime victim.
In 2008 it was the turn of Wall Street (the bastion of ‘financial security’) to lead the charge down the dungeon of capitalist make believe, and to upset the shiny apple cart, and dump the world in a credit crunch par excellence. In 2010 the USA and their European allies still flounder in this dirty bathwater. A dark and murky cloud drifts aimlessly in a financial playground, where smoke screens have become all the rage, in an effort to smooth over the turmoil, and disguise the oozing river for near ‘bankruptcy’ that flows as large as the Yangtze Kiang through the financial streets of the old World order. Back upstream the 3 gorges dam seems to do little to stem the flow of financial tears in the West.
But in the East it is a different story. Asia is plainly and mysteriously on another financial planet. Feng Shui; a definitive mindset; a shiny set of financial wheels; and a more respectful rung on the economic ladder, has actually boosted the Asian economies.
At the heart of the matter is that new chestnut, China, somehow symbolized by the gleam and glitz of Pudong’s Pearl Tower, dominating the skyline like a rocket ship about to launch. The fact of the matter is that it has already taken to the skies, through the buzzing airways of commerce, industry, trade and finance, supported by infrastructure and what the West, in their time of despair, might like to class as economic skullduggery.
The proof is in the pudding, and 2009 eventually saw a gigantic turnaround with some remarkable results in Asia. At the beginning of 2009 most investors were bent over and creaking in shock, sourly beaten by hideous falls in equity markets worldwide. While cash was being stored under larger mattresses at home, well away from the collapsed banking system, Asian equity markets took off a pace and flourished in equity outer space.
Those investment funds lumped aptly under the grand title of “Emerging Markets”, or fine tuned under the title of a “BRIC” fund, have been raking in the profits. The question is – how much money came out early enough from under the mattress and was Asian invested?
The Frenchman Voltaire in the 1700s Blooming in the Face of World Gloom said, “Is there anyone so wise as to learn by the experience of others?” Yet in this day and age, and in the case of the Asian financial market boom in 2009, who was there (alongside you) to reap the rewards?
Everyone knows that when things have taken a big dip, that is the time to buy. After all as Ambrose Redmoon succinctly put it “Courage is not the absence of fear, but rather the judgment that something else is more important that fear.” Naturally we all leapt into the Asian markets and took that plunge and made a killing.
This is all backed up by the words of TS Eliot who said, “Only those who will risk going too far can possibly find out how far one can go.” You and I were ready on the sidelines to cash in on the cash cow, because, as George Bernard Shaw said, “The people who get on this world are the people who get up and look for the circumstances they want, and if they can’t find them make them.” At the end of the day William Shakespeare said it all with the simple words, “The readiness is all.”
The investment house Jardine Fleming, have a Fund in Korea that made 66.7% in 2012. Their Thailand Fund made 84% over the same timeline, while in Taiwan their fund creamed in a growth of 64%. They are a British company who delisted on the Hong Kong Stock Exchange around the time of British ‘handover’ of the territory to China, when China spoke of ‘150 years of shame’ while Britain ruled Hong Kong. Jardine Fleming were picked out by the Chinese as example of this shame, amid a flurry of mainland accusations of being linked up with the Opium Wars, in the days when the British rulers issued Government licenses to trade in Opium in another century.
Meanwhile investing in most of Europe and the USA is a bit like pouring tea from a chocolate teapot. South America adds the B to BRIC funds with Brazil, and with South America comes under the lucid umbrella of “Emerging Markets”, and has also managed impressive results recently.
This is all very well, but what of the future? If you still fall in to line and believe in the old world order, then invest in USA and Western Europe, but beware that this investment flame might be getting as much protection for your capital as using a chocolate fire guard. There again shares in Kraft might get you a boost with Cadbury. The buzzwords still have to be “Emerging Markets”, while the downturn in 2009 with the Hedge Fund industry and in Commodity Funds is being talked back up right now, profitability is forecast for 2014 and beyond.
It’s a complicated brew. But for those who made it in 2009 in Asia it is time to sit back on the brand new yacht, and enjoy the new beach cottage.
Perhaps it is also time to take more cash from the stash beneath the mattress and trickle a dollar or three into those “Emerging Markets”, and place a wholesome wad into agricultural Commodities… after all, half of the world lives on rice. Put your money where your mouth is, and invest in this fuel that drives the workers of the “emerging markets” – after all rice is Asia.
But the future signs are still only for the brave at heart. “Is there anyone so wise as to learn by the experience of others?” The advice is simple, don’t fret, take the plunge, for rather the judgment that something else is more important than fear.”
Indeed, its easy looking back, especially after the success of investing last year when the signs were obvious, and the lessons worked well when put the test. Asia is definitively blooming in the face of the world gloom.
