by Carl Delfeld, Global Markets Strategists, The Oxford Club
Thursday, February 14, 2013: Issue #1970
While based in Asia as a diplomat and banker, I was fortunate to get a ringside seat to watch how influence and money shape a country’s power structure, economy and foreign policy.
I also developed friendships with a circle of rising business tycoons sometimes referred to as Taipans – a term that roughly translates as “bigshot.”
What I learned surprised me…
These new Taipan tycoons don’t have any background or skills that you don’t have. Many of you are better educated and grew up in much better circumstances compared to the humble beginnings of most new tycoons.
So just what is their edge, and why does whatever they touch turn to gold?
In short, they think differently and follow a simple investment blueprint I’ll describe to you in a few minutes. I can assure you right now, the new billionaire tycoons do grasp that global power and profits are making a dramatic pivot to the Pacific Rim.
Just as the twentieth century was centered on the Atlantic Ocean, the twenty-first century belongs to the nations bordering the Pacific.
Slicing Up the $6 Trillion Pie
The new tycoons are also already acting on a key finding in the just-released U.S. National Intelligence Council’s 2030 report:
“The growth of the global middle class constitutes a tectonic shift: for the first time, a majority of the world’s population will not be impoverished, and the middle classes will be the most important social and economic sector in the vast majority of countries around the world.”
While this economic pie of $6 trillion in spending power is enormous, the new tycoons know that a select group of favored blue chips will capture the biggest slice. And though we all like to believe in free markets, the new tycoons play by a different set of rules.
Now, quite frankly, following the new tycoons is not for everyone.
Yes, there is a bit more risk investing in the leading food companies of Singapore, Chile, Panama, Indonesia, Korea, Mexico, or Taiwan than investing in Kraft (Nasdaq: KRFT). But the potential reward is far, far greater.
Five Reasons to Bet on “Boom Chips”
Before we get to the tycoon blueprint, right off the bat, here are five reasons you need to add some of these ideas into your portfolio now.
- They offer you the same great balance sheets, 3% to 4% dividends, and talented management of traditional blue chips, plus much higher growth and upside potential.
- They enjoy a “favored” position in their home markets, with the fastest-growing middle-class consumer markets in the world.
- They are already considered blue chips in their own countries, and many trade on U.S. exchanges.
- They are substantial companies. For example, the average market value of the top 30 emerging market consumer companies is $26.8 billion.
- They operate in countries that avoid the high debt, high deficits and poor demographics that plague well-developed countries.
In short, just imagine the opportunity right now to invest in the Johnson & Johnson (NYSE: JNJ) stock of a century ago. This is how the new tycoons are building their fortunes at lightning speed, while most investors keep falling behind.
You too can profit greatly by investing in the “J.P. Morgan of Singapore,” the “Heinz of Malaysia,” the “Kraft of Thailand,” the “Google of Russia,” the “Starbucks of Taiwan,” the “Chevron of Indonesia” and the “Jet Blue of Panama.”
This is your opportunity – now go out and seize it.
Editor’s Note: Stay tuned for Carl’s essay next Thursday where he reveals one of his favorite foreign markets, one he calls the “Singapore of Central America” – and his top stock pick in the region.