Hi tippet,
Yes, Asian companies may be on sale for 10 cents on the dollar, however, if they run out of cash and declare themselves bankrupt, you end up with $0. The true beneficiary of these firesale deals may be the US multinationals which buy these companies once they are bankrupt.
Current shareholders get $0, US multinational buys the assets at 10 cents on the $.
Personally, I'm waiting for the stock markets of the Asian countries to "flatline." (Just like the cardiograph of a heart-attack victim.) I.e., I expect the economic recession / depression to last long enough (2-3 years) that traders lose interest and the stock markets go flat with low volume. I think that is the low-risk time to invest.
The last time I saw this was with US small-cap technology stocks in the summer of 1994. Many of the stocks I followed would trade only a few thousand shares a day. Occasionally, stocks with market caps of >$100 million would not trade during an entire day's session! That was the time to buy!
Best regards, John. |
