Hello Wiz,
I have noticed a fallacy in the US press and consequently in the mind of many US investors. God help me, I hope I can explian myself in English without offending some readers!
I have been investing in NYSE since 1972. Then when I started Asia was of no importance. The market meant US and to much lesser extent Europe and South America. We made money all the same.
Despite what analysts want to make us think, Asia (China excluded) has less significance on the earning of US Corporations than we are lead to believe. I don't think US economy will be brought to their knees if the currecny in Malesia is devalued (I bet most of the analysts that have raised the alarm don't even no what is the name of Malasian currecny or who is Mr. Mahatir!!)
As for China, There are no crisis there. The Chinese market is strong, the demand is still strong and US comapnies are still doing brisk business in China.
Hong Kong is less important than we are lead to believe. You see, as long as HK was a Crown Colony, it was important as it acted as a front for the China based manufactueres. It was the commerical and marketing power house that sold china's goods world wide and kept the profit!
The HK stock market represnted the interest of HK commerical
companies that sold and distributed Chinese manufactuered goods and
a few real-estate companies.
Now, HK is no longer a Crown Colony, and nor is it and independent
economy. There is one China, and all the string in HK are pulled in Bejing. (if there is a semblance of HK independence, it is becasue
the communist Chinese want us to believe it , since they don't want to frighten Formosa. So, if HK really is no long a soverign government, their Currecny, HK dollar and their stock market are also
make believe?? If the Heng Seng and HK dollar collapsed, maybe more
than the work of ousiders (as the world is quick to accuse Mr. Soares!) it could have been the work of insiders? It could have been
the work of local Honk Kongers that according to Swiss Bank Corp have
transfered over 500 billion dollars from HK over that past five years,
or maybe it was the work of Chinese government that wanted to buy the
shares in major HK companies for small money, and undirectly strengthen their grip over HK economy? I don't know all the facts but
I suspect some answers, wrote Marco Aurelio.
Instead we should look to Europe, South America and the Middle East where the demand for US made goods is as strong as ever. Major Euopean economic powers, Germany, France, Italy, UK, Switzerland, Greece, Spain, Portuagal, Norway, Sweden, Holland and Denmark are pulling out of the recession and the recovery is underway.( I have Austria out as so far their national output is of lesser
significance.)
The major stock markets in Europe countires show an average storng 16% gain so far in 1997, (against average loss of 27% in Asian stock markets, Australia excluded.) Europe still represent a great market for US made goods and the demand for the US tech. is very strong. Middle East, with the exception of Syria, Iraq, and Iran that all three (Syria partially) all black listed to US made goods, is a thrieving market for the US corporations. South American regional powers, Mexico, Argentina, Chile, and Brasil are still great markets for the US goods and investments.
So,in my modest opnion, we can look to another five years of grouth
once the Hong Kong flue is over with.
Any comments?
Kind regards,
Yaacov |
