Stitch: re Indian and Chinese....
they may be involuntary participants in the greed process. Any time a big multinational sets up shop in a foreign country, they can also set up a 401K or its equivalent with a company match for those employees. The pension plan buys a basket of stocks including an index of the home country, buys the stock of the company for the company-match portion, and takes a cut for itself. This obviously helps (1) the CEO as it makes his stock price go up-- the pension plan HAS to buy the stock regardless of its value, (2) the pension plan, who makes a profit no matter what happens, (3) the stocks that get voted onto the index, because the index is being purchased for its pension value 25 years in the future. This is why I think it may be time to buy indexes in these countries- it will be purchased and will go up for reasons that have little to do with valuations, regional politics, etc, etc.
Now, give very bright people a chance to see how this works, IMHO they will jettison the multinationals in droves to start their own companies. I expect a flood of ADRs to hit the NYSE in the next five years. |
