Virtue In Being Early?

Trader Mark has a post up about Chile (hat tip to a reader) that was inspired by this Wall Street Journal article. Both the blog post and the WSJ article have a lot of meat on the bone.

Mark says that he’d never written about Chile before and based on what he wrote I presume he is favorably disposed (apologies if I read that wrong). I’ve been writing about Chile for about four years, following it a little longer than that and have had exposure more often than not over the years. It has been quite clear to me for several of the reasons cited in both links that Chile offers a lot of potential utility as an investment destination.

This post is not about whether you should think Chile makes for a good investment or not. To be clear neither Mark nor the Journal are late. I think, though, this is a good example of how investors will learn about new (to them) destinations and the potential value in having exposure to these places before that happens.

Although that is a fairly obvious point I know (you do too depending on how much stock market television you watch) that many investment professionals are reticent to be early in adopting something new–safety in numbers. I know from some of the conferences I go to, and by some feedback from my Street.com articles that not many folks invest at the sector level, for example, and individual countries are also uncomfortable.

I believe that the way markets and investing are evolving people will have to go narrower than they do now. This means seeking out specific countries that provide a reasonable expectation of a low correlation to the US and Western Europe.

I have had many posts over the years about the countries that I favor in this context and if you have been with me for a while you’ve probably noticed that the list doesn’t change too frequently if at all. I’ve had some decent luck with the country picks, not because of any brilliant analysis, but because I wanted different economic attributes. Making a list of “different” countries is pretty easy, selecting which ones to buy is obviously more work but the task of figuring where to look would probably only take a few minutes.

11 Comments

  1. Anon 7:13
    IMO a key element a lot of people are missing about the export-driven economies of Asia is relatively weak domestic demand. Take away US consumption from China and South Korea and you are confronted with the paradox of thrift. Remember that the per capita GDP in China is only about 2000 USD. Yes, the aggregate savings of 1.4 billion people on deposit in Chinese banks is something to behold, but the savings rate does include public savings as well.

    The reality for the rest of the world is that the US is TBTF. Not saying that’s a good or honorable thing, but it is what it is.

    Reply
  2. Roger,
    can you describe also when you get out of the theme? What are the triger points.
    Tx,
    Jeff from Milan

    Reply
  3. never been a big fan of S. Korea, just something about it…

    Jeff–good question for this week’s video

    Reply
  4. Anyone invested in the stock market is a fool.

    Invest in yourself and your own business,generate you own cash flows.

    Why give your money to financial advisors, fund managers, and wall street

    Reply
  5. Anon 7:15

    Over time, I’ve read that trade within the SE Asian bloc has been steadily growing. Obviously, it’ll take a long time, if ever, to supplant the US as the big boy on the consumer block, but as various emerging countries develop and become more affluent, I suspect the US’s role will diminish.

    Old Trader

    Reply
  6. Betting on any country that is not America and not in debt and has natural resources is an easy call.

    Wealth is in the hands of those countries that have not squandered thier natural resources as America has.

    California is turning into a huge desert filled with illegal Mexicans. At some point it will be cheaper just to give southern california back to Mexico and the Mexicans continue to turn it into a cess pool.

    Reply
  7. Clearly it’s open mike night at Club RR.

    If only people mowed their own yard, we’d solve two big problems in this nation: Illegal immigration and angry trolls.

    Reply
  8. And obesity.

    Reply
  9. Interesting to note how it appears that investors are all too ready to throw the US investment play under the bus.

    Methinks that even our liberal friends know this administration is making very costly errors that will haunt for a long time – even an era, and are investing elsewhere.

    Reply
  10. Roger,

    I’ve noticed that another Seeking Alpha writer, Dr. Kris from MIT has developed a really interesting item called the SMC analyzer on her stockmarketcookbook.com website….it puts together Modern Portfolio Theory and several market timing oscillators – seems she prefers the CCI – in regard to properly allocating assets. Looks like an innovative and new way to allocate, and puts ‘buy and hold’ to bed for good it seems. Are you familiar with it?

    I’ve been involved in markets for many years and fund managers have never shown that they can effectively time the markets. Maybe they should take a look at it, since this seems to be hard math and there is no ‘human’ element to louse the results…. Your thoughts on it?

    Reply

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Virtue In Being Early?

Trader Mark has a post up about Chile (hat tip to a reader) that was inspired by this Wall Street Journal article. Both the blog post and the WSJ article have a lot of meat on the bone.

Mark says that he’d never written about Chile before and based on what he wrote I presume he is favorably disposed (apologies if I read that wrong). I’ve been writing about Chile for about four years, following it a little longer than that and have had exposure more often than not over the years. It has been quite clear to me for several of the reasons cited in both links that Chile offers a lot of potential utility as an investment destination.

This post is not about whether you should think Chile makes for a good investment or not. To be clear neither Mark nor the Journal are late. I think, though, this is a good example of how investors will learn about new (to them) destinations and the potential value in having exposure to these places before that happens.

Although that is a fairly obvious point I know (you do too depending on how much stock market television you watch) that many investment professionals are reticent to be early in adopting something new–safety in numbers. I know from some of the conferences I go to, and by some feedback from my Street.com articles that not many folks invest at the sector level, for example, and individual countries are also uncomfortable.

I believe that the way markets and investing are evolving people will have to go narrower than they do now. This means seeking out specific countries that provide a reasonable expectation of a low correlation to the US and Western Europe.

I have had many posts over the years about the countries that I favor in this context and if you have been with me for a while you’ve probably noticed that the list doesn’t change too frequently if at all. I’ve had some decent luck with the country picks, not because of any brilliant analysis, but because I wanted different economic attributes. Making a list of “different” countries is pretty easy, selecting which ones to buy is obviously more work but the task of figuring where to look would probably only take a few minutes.

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