Hi, I thought your blog was a good opportunity for me to know how the experts think about South Korea’s economy. First, what is your opinion of the Korean shipbuilding industry – will it continue its downfall due to low demand or will it recover in 2010? Second, do you think South Korea’s exit strategy for their expansionary fiscal policy, if implemented, will greatly impact the economy?
– Joshua, South Korea
1. We think that the shipbuilding industry in South Korea has a high level of expertise and technology and they thus will be able to compete in the global market for the time being. However, the Chinese are rapidly catching up in the technology race; by combining their larger market, cheaper and more plentiful labor and improved technology, they may be able to take market share from Korean shipbuilders. I believe the future for Korean shipbuilders will be in very specialized, high-tech ships and by establishing shipbuilding plants in China.
“The world belongs to optimists; the pessimists are only spectators.” – François Guizot
One of my blog readers is a young university graduate from Hong Kong, who wants to pursue finance and investment as a career. He asked me: “What should I do if I really really want to work in the financial industry? What are the most essential qualities for a young man to succeed in the financial world? Do you have any advice?”
In emerging markets investment, I believe it is necessary to be optimistic. While one can certainly learn numerous technical skills that help in making investments or managing a portfolio, a large percentage of investing is still psychological. Both buyers and sellers act on a combination of instinct, information and logic. The development of certain personal characteristics could play a key role in contributing to your investment success.
By Tom Wu, Senior Managing Director, Templeton Asset Management, in Cebu, Philippines
Following my colleague’s post on the BRIC economies a couple of weeks ago, it’s worth noting that our global emerging markets strategy includes investments in over 20 emerging economies. As bottom-up investors who look at companies on a stock-by-stock basis, there are opportunities and bargains in many of these markets which might not appear on most investors’ radars.
During the Templeton emerging market team’s conference in Cebu last month, we discussed a number of these opportunities. Today, I’ll focus on two countries – Turkey and Hungary, which we believe are trading at attractive price-to-earnings and price-to-book ratios.
I recently returned from Athens, where we met with executives of companies in which we first invested many years ago. We started buying stocks on the Athens Stock Exchange when Greece was still considered an emerging market. Since then, it has joined the European Union in 1981, adopted the Euro in 2001, and hosted the Summer Olympic Games in August 2004.
Athens was the only Olympic Games that I ever attended. It was quite thrilling to visit the home of the original Olympics and see records being broken in the swimming events that year. You may remember that this was the first time since 1896 that the Olympics were held in Greece. I remembered that there were doubts as to whether Greece could actually pull off this big expensive event because Athens and the other cities lacked good infrastructure, suffered from air pollution and had many other problems. There were also doubts that the budget of $11 billion could be raised in a country with a population of only 11 million. However, they did it and the Olympic Flame was lit again in Olympia.