Trend Followers in Singapore, Malaysia and Indonesia

I would argue that it is a combination of hard work, smarts and wealth that brings them here, but it is amazing how many readers and clients of mine come from Singapore, Malaysia and Indonesia. Have not been to that area of the world for a few years, but ready to go back.

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You might like my 2017 epic release: Trend Following: How to Make a Fortune in Bull, Bear and Black Swan Markets (Fifth Edition). Revised and extended with twice as much content.

18 thoughts on “Trend Followers in Singapore, Malaysia and Indonesia

  1. I spend a lot of time there and I think I know EXACTLY why they’re there. First, as Jim Rogers says, being there puts you next to the next big superpower: china, and the other Asian monsters that will be running the planet in 10 years.

    Second, the governments there do ONLY what governments should. They look after infrastructure, defence, education, health, poverty, and public safety. NOTHING ELSE!!! Over here the government has become a tool for every group of whiners with an axe to grind. Don’t like noisy TV commercials? No problem…the government will pass a law outlawing noisy commercials. Don’t like cheap imports because they expose the fact that your organization has become fat and inefficient? No problem…the government will impose import duties so every American can subsidize your fat ass.

    Quick story: We keep hearing about low pollution standards in China. I was in Tianjin (a major Chinese city) a year ago and the sky was grey. Went back last August and the sky was bright blue. The Chinese don’t TALK about cleaning the environment, they DO IT, and they are doing it faster than any other country on the planet, spending $280 billion this year on solar energy alone. Meanwhile over here we set up ridiculaous carbon trade platforms and Congressional committees to investigate whether to invest $10 billion. Huh?

    Believe it or not, as a business person you will find more clarity and freedom in China than you will in North America. That’s why by far the majority of the world’s new billionaires are coming out of Asia. They now are where the US was in the early 20th century and where Britain was 200 years ago. Love ’em or hate ’em, they will be the next supreme power.

    You better learn Mandarin.

  2. People said the same thing about Japan 20 years ago (they were going to take over the world!). Im not buying it, never have. I think China is where Japan was 20yrs ago. This is their heyday, and it’s probably sideways to down from here. Why? Because you can only milk the low-cost labor arbitrage trade for so long!

  3. @Trader Ken,

    I see your point, but it’s apples and oranges.

    First, Japan has the world’s fastest aging population. China and the rest of rocket-Asia are young. In fact, the Japanese are using Chinese workers and companies to do their manufacturing because they don’t have enough workers.

    Second, Japan did 20 years ago what the US is doing now…massive government intervention to give the appearance that all is well (if anything, the US is where Japan was 20 years ago). China has no reason to do that. They are flush with cash and their economy is solid.

    Third, GO TO CHINA!!! It’s real! In stark contrast to the slow pace of Japan or the boarded-up factories and houses in the US, China is booming on a scale that has to be seen to be believed. When I first went to Beijing I counted the cranes putting up skyscrapers…I quit counting at 2000.

    And as for the low labor cost card…it isn’t that China’s labor rates are low, it’s that the US’s are obscenely high. The average factory worker in China makes US$150/month, which is up from $100/month 4 years ago. The US as we know it won’t exist by the time the average Chinese worker is making $US$4000/month like their US counterparts. In other words, they can play that “low labor cost” card for a lot longer than the US can remain solvent.

    Our only hope is that the Chinese are fanatics for western food and culture. At some point they might become overweight slobs with iPods in their ears and a 35-hourt work week. But until that happens, they work 6 – 7 days/week and 16 hours/day to make the fastest growing economy in history hum…and there’s 1.5 billion of them…plus another 1.5 billion young, highly-educated people in India. (Don’t believe the 1.3 billion figures…not everyone gets counted).

    Trust me…the world is changing under our feet and those who by necessity rely on reality, not fantasy, to survive — for example, successful traders! — will adjust. Hence, they’re moving to Asia.

    Meanwhile, Joe and Mary Citizen sit in their Chinese-made easy chairs, wearing their Asian-made clothes, watching their Asian-made plasma, surrounded by Asian-made appliances wondering why the government isn’t doing more to keep their US jobs secure…

  4. Problem is the new skyscapers, malls, and entire cities are empty. They built it but nobody came. The billionaires are for the most part hand picked by the communist govt. A couple years ago they enacted a huge stimulus in the midst of a long-term boom. If they stimulate during a boom, imagine what happens when they are down for the count. It will make Japans stimulus look like pocket change. Jim Rogers cracks me up, he says we should shut down the Fed but then he moves to a country that has perhaps the mother of all Feds and more or less proclaims that to be the greatest country on earth. Makes no sense to me.

    And then there’s innovation, or lack of it. I can’t think of a single innovative product to come out of China recently or ever for that matter. How many people walk into Wal-Mart and say, wow, look at all the innovation coming from China! Historically the leading countries have been the innovative ones. I can’t think of any country that became a world leader by being a low-cost copycat. Isn’t the big lesson of history innovate or die?

  5. Ken,

    The long run evolution seems that the U.S. is moving more and more toward what you’re describing. China is moving more and more away from that. Either way, mistakes are going to be made in the short-term (ineffective policies, overbuilding, etc.). The Chinese are highly pragmatic, they’re good at figuring things out as they go along.

    History also says, over the long run, whoever gains reserve currency status wins. That may be a big clue. Then, perhaps your doubts may be put to rest.

    Just chiming in my $.02.

  6. The American….
    1] The US priced themselves out of competition.
    2] The US suffers “Success and Superior Disease Syndrome” laziness, arrogance etc.
    3] China and Asia bashing syndrome. Everything others do are wrong, only the US value is right, while others are are **** eater…
    4] Accusing Asian and China of currency manipulation will not make USA going on the right track.
    The fed keep making more fiat dollar and while the US keeps criticizes others.
    Well, keep on….to the sunset of an empire..May your military might and money printing help your destiny.

  7. Ngchuanling, hope that is not directed at me! My post was very complimentary. Also, let’s keep the profanity at bay.

  8. @Trader Ken

    You are talking about the OLD China. The new one is FULL of innovation. There are more children in high level technical private schools in China than ALL the children in the US!! Who do you think will be the more innovative in 10 years? The US has dropped the ball on education and it will come back to bite hard.

    Do the Chinese do a lot of “reverse engineering?”

    Absolutely.

    For example, to make the world’s most advanced steel mills in Shanghai, they took out their check books and hired the expertise of the world’s best steel makers from Austria, Germany, America and Japan. Now they make the best steel in the world at the lowest cost. I’ve been to the plant. It’s massive and you can eat off the floor!

    The scariest thing they’ve done recently is purchase an old aircraft carrier. No doubt they are tearing it apart piece by piece to see how it works, and as they produce almost 60% of the world’s raw and finsished steel products, they will no doubt have a state-of-the-art war machine in the next five years.

    This is not Mao’s China anymore. These guys are motivated, innovative, populated and flush with more cash than any country in history.

  9. Reverse engineering is not innovation, its copying. Leading companies don’t reverse engineer, they innovate. The future is not in steel. So what if they become the low cost provider in an old industry. Japan led the world in cars, which is even more useful than steel and even that got them nowhere. Let them tear apart our old aircraft carriers, that will guarantee that they are always 5yrs behind us. Those things are obsolete the moment they are built. We’ll be focusing on the new technologies while they try to figure out the old. Btw, none of this is bashing. It’s just my opinion and I could be wrong, but Im calling like I see it.

  10. It’s hard to talk about innovation without addressing the extent to which high-skilled immigration and emigration affects innovation and growth. What may not be so innovative here in the U.S. is massively innovative in other countries. Innovation is in the eye of the beholder. There are few countries either in the Middle East, Asia or Africa where the Chinese do not have a major presence. They’ve positioned themselves as the infrastructure builders of the world. They’re building dams, roads, hospitals, schools, airports and on and on … They’re not there to spread “freedom”, or do police work, they’re there exporting much needed skilled-workers and at the same time securing ever increasingly scarce resources for themselves. This is what I saw on the ground with my own eyes. The world is changing rapidly and seeing things with our own definitions only obscures the change.

    As for the impact of immigration on American innovation and growth, the following quote gives perspective:

    In Silicon Valley, America’s epicenter of technological innovation, the percentage of immigrant-founded startups reached 52 percent of total new companies over the same period[1995-2005]. Read the rest of the article here: http://www.businessweek.com/investor/content/jul2010/pi2010079_863838.htm

    Whether it’s Albert Einstein, Alexander Graham Bell, Google or yahoo, attracting talent from other countries is what fuels our innovations. The Chinese way is different.

    Just my opinion.

  11. I use steel as an example of how an old technology once dominated by the US is now dominated and operated in a high-tech way by the Chinese. Their plants are automated, their costs are lower and they have taken over the industry. Meanwhile, the old US steel mills chug along full of dirt and soot like they have for 100 years. And most US mills can’t make a go of it without duties and subsidies. They are the dinosaurs…the Chinese are the innovators.

    Get used to it…what the Chinese did to the US steel industry they are about to do to all US industries.

    And as I said above, with more Chinese students in private high-tech schools than ALL of the children in the US, my money’s on the Chinese to lead innovation over the next 20 years.

    Of course, there are also more Chinese writers of the CFA exam now than the rest of the world combined…so maybe we have some hope if they use their CFA knowledge (efficient markets, portfolio theory, portfolio balancing, other crap, etc.) to run their investments.

  12. Oops! Sorry…Dear Mr Michael Covel,
    Just have to let out the pent up steams at the “Holier/superior than thou” attitude of some American, that think the world twists around the USA…Every great empire perished because of the “Superiority Complex Disease” that spread like cancer in their society.
    1. China Slave workers?.. Surviving with $3 dollar/day wages?
    China with 1.1billion population, how could she sustains the population if she’s not the world greatest producer/exporter of food…poultry, vege, grain,fishery…low cost of living produce low wages.
    2.Long China history of brutal and Machiavellian society…
    China has 5000years written history of whatever human tragedy, USA has 300+ of brutality.
    For the past 100years , China have suffer tragic backwardness till the 80’s, while The US advance tremendously in science and tech….and now China trying to catch up by hook and by crook…
    3.The US try to halt China advancement, China is not a nerd and USA have become so used as a military bullier, so what can the US do now?..Simple!
    Just create trouble in the Asia region and presto!
    It will create markets for the US goods and military complex.
    Ever wonder why the US military young boys are so EAGER to see action in war??? Something must be wrong here in the USA mass psychology and mentality. The eagerness to go to foreign land and to kill the people, to defend the….USA? Ideology? I think it is more about defending the fiat money and the petrodollar and US market and oilfield.

  13. @ngchunling,

    Good points. China will do well because of its massive, young, highly educated population. Which isn’t to say it’s all up and away. After all, we’re trendfollowers, and we know the corrections will be there. A typical correction in the Chinese market is 50%…quite a hit. But the trend is definitely UP!

    The Persians, the Romans, and the British all thought their supremacy would never end. They simply couldn’t conceive it. Ironically, the tell-tale signs were the substantial devaluation of their currencies, increases in commodity prices, and regional conflicts followed by large-scale war. Sound familiar?

    If not, check your newspaper headlines and short the US dollar index!

  14. India has been force feeding people into technical schools for 30yrs. What innovation came out of that? What is the must-have product from India? What product from India are people clamoring to get their hands on? All it got them was a bunch of low-wage backoffice IT work.

    Innovation comes from passion and vision, not from force feeding people into technical school.

  15. TraderKen,

    Your absolutely right.

    India now performs all of our outsourced engineering for our high tech, our buildings, planes, software, manufacturing, customer service, roads, pipelines, industrial plants, etc, etc, etc.

    They have the high tech jobs, they have our technology, and they are registering more patents than all the western world combined, meaning they are now creating their own technologies.

    Have you seen who’s leading the world in research into artificial intelligence, robotics, medical procedures, and manufacturing? Asia!

    Meanwhile, Joe and Mary US Citizen are working at MacDonald’s while our inner cities educate our kids on rap, running shoes, and iPods (all made overseas, by the way). Heck, even most of our animation is done in Asia.

    How do you think this story will end??

    And you’re right…it all started in India with education 30 years ago. Look up where all the patents are coming from now. NOT AMERICA!

    From India’s example and your numbers, it appears they have a 30-year head start on us. We better get moving!

    We can start by NOT getting our information on Asia from 20-year-old National Geographic magazines. Things have changed big time.

  16. I think a better start is to stop reading chamber of commerce brochures and look at what’s really happening.
    Stop looking at what sounds good (patents) and look at reality (no innovative products). If patents were the key to wealth, then places like Bell Labs, science and research institutes, etc. would be the richest entities on earth and clearly that’s not the case.

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