I’m giving away my age, but I remember learning how to read with Dick and Jane books. I’m a big reader today, but it was far from my favorite subject back in the first grade.
Instead, I loved making masterpieces with crayons, big fat scissors, and sticky white paste. For harder drawings of recognizable images, I’d use connect-the-dots sheets.
It’s been 45 years since then, but I still love connecting the dots. The difference is that I’m no longer drawing pretty pictures.
Instead, I’m busy figuring out the investment implications of various events and trends. To me, that’s the best way to find the most profitable investments. Let me give you two examples …
Connecting the Dots #1: Sony has had to recall millions of lithium-ion laptop batteries over the past few months. And when the initial news came out, a lot of investors were busy looking at the companies that would get hurt.
But they could have just as easily asked themselves a different question – “Who will profit from the massive recall?â€
Here’s one answer: Simplo Technology, the second-largest laptop battery maker in the world. The Sony battery fiasco was very, very good for Taiwan-based Simplo because the company saw an increase in orders.
For example, last quarter, Dell put in an urgent request for 400,000 battery packs because it had to recall 4.1 million Sony batteries on August 14.
Because of the increased orders, Simplo’s profit for the first nine months of the year jumped 35% to $27.5 million. And the stock has soared more than 40% in the last 12 months!
In other words, anyone who connected the dots is sitting on a very nice open gain right now. At this point, it might be too late to hop on Simplo, so let me show you another hot investment area that’s just starting to emerge …
Connecting the Dots #2: It’s no secret that India’s economy is growing rapidly. But to find the country’s best investment opportunities, we have to dig a little deeper.
Let’s start with the premise that India’s growth means rising incomes for its citizens. Then, we can connect that to how people will use their bigger paychecks. I figure they’ll probably seek out better housing … spend more time shopping … and stay in nicer hotels when they travel.
In my mind, all of that points to Indian real estate companies. After all, someone will have to build those new homes, shopping centers, and hotels.
And for investors, the timing couldn’t be better. You may not have heard, but Parsvnath Developers will become the first Indian real estate company to ever have an initial public offering open to foreign investors. I suspect it will skyrocket on its first day of trading.
Plus, there should be a string of other Indian real estate development companies following in Parsvnath’s footsteps over the next few months. I’m talking about companies like DLF Universal, Sobha Developers, and Akruti Nirman.
Now that you’ve heard this news, you might want to call your broker and ask if they have a foreign trading desk. After all, that’s all it takes to start buying stocks that trade on foreign exchanges.
And that brings me to the biggest dot I’d like to connect …
Asian Economies Are
Still Expanding Rapidly
It’s not just Indian real estate investments that should be getting your attention.
China remains the fastest growing economy as well as the manufacturing center of the world. In October, the country’s trade surplus jumped to a record $23.8 billion, substantially higher than the $15.3 billion reported in September, and 29.6% more than the same period last year.
Through the first ten months of the year, China sold $133.6 billion more than it imported, crushing the $102 billion trade surplus it had for all of 2005.
But it’s not just China! For example, Vietnam is another roaring Asian tiger. The country’s gross domestic product increased 8.2% so far this year. That kind of growth puts it right behind China.
Heck, countries like Taiwan, Singapore, Malaysia, and South Korea are all growing like mad. Especially once you compare them to the U.S. economy, which showed a snoozable 1.6% growth rate recently.
This is why I suggest connecting your portfolio to some of these fast-growing economies. And it’s also why I was so quick to reschedule my trip to Asia.
That’s right … in just seven days I’ll be boarding a Cathay Pacific flight to snoop around Hong Kong, Macau, Shenzhen, Guangzhou, Shanghai, Singapore, Zhuhai, and Tokyo. My goal is simple – uncovering the fastest-growing companies in the world to recommend to my Asia Stock Alert subscribers.
I expect to return to the U.S. with a severe case of jet lag and a fistful of extremely profitable investment ideas. All I’ll have to do is connect a few dots while I’m over there.
Best wishes,
Tony Sagami
About MONEY AND MARKETS
MONEY AND MARKETS (MaM) is published by Weiss Research, Inc. and written by Martin D. Weiss along with Sean Brodrick, Larry Edelson, Michael Larson, Nilus Mattive, and Tony Sagami. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MaM. Nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MaM are based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical inasmuch as we do not track the actual prices investors pay or receive. Regular contributors and staff include John Burke, Amber Dakar, Monica Lewman-Garcia, Wendy Montes de Oca, Kristen Adams, Jennifer Moran, Red Morgan, and Julie Trudeau.
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