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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: energyplay who wrote (1982)	11/13/2005 5:50:27 AM
From: Seeker of Truth	Read Replies (1) \| Respond to of 217802

Hello Energyplay, Your division into three types of countries, industrial, creative with rule of law, and natural resource countries is quite useful. Well we are always looking for semi-monopolies. Society in time tends to gang up on absolute monopolies. Also even semi-monopolies never last forever so maybe we should say we are always looking for fairly long term semi-monopolies. I'd like to postulate that to a first approximation there are no good investments in a country without any rule of law. So while we don't have to demand a standard up to that of, let's say the Scandinavian countries, but if the country gets a good part of the way to that standard and other things are attractive then we can risk it, with diversification, of course. I think Australia,Brazil, Chile and Canada all have reasonable amounts of rule of law. I've never lived in Brazil or Chile so I might be wrong. Anyway,the natural resource companies in such companies may be good investments because in the age of six billion global population, increasing fairly rapidly, and industrialization ditto, we are increasingly troubled by the shortage of natural resources. So those who have them have a semi-monopoly. There in Australia ..Canada we have semi-monopolies combined with some rule of law. Technology produces semi-monopolies. The only problem is that MOST of these semi-monopolies don't last long. It's the nature of technology. Develop some complex but extremely useful computer program and in a few years there are several imitators. So the window of monopoly is narrow even with the most complicated of things. Are Qualcom and Google exceptions? It's a gamble. If the rule of law by itself were enough to give some companies in the creative world semi-monopolies over investment of capital from the industrial world then Morgan Stanley, Goldman Sachs, etc. etc. would be semi-monopolies. But actually most such money managers are a dime a dozen. There have to be a few good ones, but most of the bad ones have a tremendous advertising budget and you have to get past all that. Probably Joe6Pack doesn't save enough to keep these guys rich. Another thing, do the capitalists of the industrial world really have so much excess capital that they have to store it in the creative world? My impression is that they are enticed with many opportunities in their home countries. Poor means lacking capital. The industrial countries are poor therefore etc. To use your example, the capital flows from Hong Kong to various parts of China; there is no major reverse flow back to Hong Kong because the profits obtained on the mainland are reinvested to expand. Looking around the world we can vaguely see five types of countries, eager as we are for sweeping generalization. 1. Down and out and staying there. Most of Africa,Burma,Colombia,Haiti 2. Industrial and Rule of Law deficient China, 3. Creative + rule of law Diversified real estate in semi-monopoly areas like Manhattan, San Fransciso etc. may be good fairly long term investments. I have found investment in Swedish real estate delightful. (One of them, Kungsleden, tripled in the last 3 years, probably overpriced now). 4. Resource countries with no rule of law Russia,Indonesia 5. Resource countries with some noticeable rule of law. Brazil,Canada I lean to Canadian energy source companies and a Brazilian bank. In a poor country such as Brazil, people will have had experience with failed banks(cf. Anne of Green Gables) and the solid ones will have a kind of monopoly of esteem. And how about India? I like some Indian banks. India is in the Industrial category only with respect to software. Otherwise where do we see "MADE IN INDIA" labels? Nowhere. I guess India is in the pre-Industrial category by itself. The pre part is just my wishful thinking, added to the fact that India now makes cars and imitation pharmaceuticals. History always has exceptions. I think the US is now in a special INSANE category, dominated as it is by oil-hungry religious nuts. I see investing there as a no-no.