Economics, Investment, Panic and Opportunity | Invest at home

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Today on Monday Morning Coffee, Granger Whitelaw addresses the current market decline, the Impact stemming from the Corona Virus, and general fear In the Markets. Granger discusses ETF’s and Emerging Market Investments – with a quick overview of Energy In Vietnam. Grab your coffee, sit back – and Let’s go!

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Below is a transcript of the episode, edited for readability.

Listen to the full episode at the link below:


Granger Whitelaw: Good morning. This is Granger Whitelaw with The Lotus Notes Monday morning, Monday morning coffee is our weekly start, talking about things that we can think about for business here in Southeast Asia and Vietnam. It is March 2nd, the month of February has come and gone, and it has been a crazy month and incredibly active month as you all know. And it went out in a bear market, 4.3 trillion in value as lost in the U S stock exchange over the past seven sessions. The markets worldwide are getting hammered. we’ll see how Asia opens this morning. But I am hoping that it’s going to turn around as we all are. There may be another 1 or 2% here, and the correction that was already really needed, in the U S markets for sure. so we’ll see. COVID 19 Corona Virus obviously is affecting everybody. I do not want to get into a large conversation about this today. I will just say that I think the, the late news reporting and the overall sensational-ization of it, in the U S and other places, is just horrible. I am disappointed when I see, when I read and the way it’s characterized. Certainly, this is a massive flu. It’s affecting a lot of people and there’s a lot of unanswered questions about it, but there’s a lot of clarity as well from what I’m seeing. And, I think that the overreaction and panic is just, not necessary.

Granger Whitelaw: So with the markets, being down in the U S in a major way, I think that this really brings to mind for me just how lucky we are to be in Asia. Southeast Asia is a phenomenal market. I think the emerging markets are a great investment. Vietnam, certainly is in its golden age. And, as, as I say all the time and I do not think that what’s happening now, dampers that I think the market here in Vietnam is strong. And I think we have to take a different look and a different approach now to how we’re doing business. Certainly, supply chains are going to be massively disrupted, but certainly there’s more diversification opportunity, for people to get out of other countries in Southeast Asia or Asia that may be having difficulties, and come to Vietnam. Look at Cambodia, look at, some of the other areas around Southeast Asia to expand your manufacturing and distribution.

Granger Whitelaw: Emerging markets are a great investment ETFs. I don’t know if you invest in ETFs or not, but exchange traded funds are investment funds that are traded on major stock exchanges and hold multiple assets, stocks, commodities, bonds, et cetera. And it can be a good way to invest in emerging markets. And I would offer the opportunity for you now to really study the emerging markets and look more deeply into the MSCI emerging market index and see, the returns that have been over 10% annualized for the last 18, 19 years, for the emerging markets, it’s about double or a little more than double the world index for the MSCI – it’s a great a way to look at diversifying. But now I think even more so to lead your investments, allocate more funds to the emerging markets. so that’s a great way to invest.

Granger Whitelaw: If you are not in the market today in an ownership way with the business in Southeast Asia. – there are some risks. You know, traditionally the markets will have a sell off, correction if you will, around 20% every two years or so. If you, I think it’s Ben Carlson who does  a chart and he charts out, Oh, probably the last 20 years or so, and he’ll show the corrections and the, the sell offs bought every two years. But that gives you an opportunity, Then if you buy in that, that downturn to make a lot of money, I think he, his, his one you return average is about 23% on the median and where five years, it’s around 45%. That’s a phenomenal, peak purchase, right – So I’m buying him the downside and letting it  come back up  on the peak.

Granger Whitelaw: you can make a lot of money just, charting that and following that type of a, a, re-balance if you will. So look at that. Look at the fundamentals. Obviously company fundamentals are always key. right now there’s a lot of different opportunities that you’ll see in eCommerce. different types of supply chain. The Lazada’s,  tiki’s,  shopee’s in Vietnam are certainly going to be doing well, I would imagine. as people feel more comfortable having things delivered at home and, and, and those organizations are growing anyway, and looking at “like” companies in different areas is a great place to look at an investment. definitely you want to look at earnings per share as you get into more mature, stocks and investments always exchange rates. are fundamental, risks and market valuation risks. certainly there’s pros and cons to that, but looking at the exchange rate is going to, affect your investment.

Granger Whitelaw: And you know, as you start looking at these things, it gets more complicated. But you know, if the Japanese, when weekend Japanese Yen weakens considerably compared to the U S dollar, your investment may lose some value in dollar. So, the investment may have been good, but depending on what kind of currency you keep it in, can wipe that out. So be careful. talk to an investment advisor if this is a little more beyond your scope of education or learning and give some advice on how to purchase it, the right currency, where to hold those assets.

Granger Whitelaw: And, and certainly somebody else will look at is capital flow. in emerging markets for small countries, certainly in the smaller middle stage of development, a large portion of the market capitalization of the stock is held by foreign investors. So, and obviously those are usually very wealthy nations, institutions and investors from those foreign countries.

Granger Whitelaw: Wealthy countries may re-balance their portfolios and can affect these emerging markets. But as these emerging markets become more important as they are today, there is more leverage on this side of the equation. So, quantify this, for yourself and study it closely. But there are phenomenal areas to invest in emerging markets.

Granger Whitelaw: One of them I would, offer now, or, an entire area is in infrastructure, right These private public partnerships with Vietnam I was talking about starting and it has started and the need for a more investment in infrastructure and certainly in Energy is key. I just read an article that came out two days ago, and they were talking about Vietnam backing off from coal and coal plants, as they get harder to build,  and the role of coal and power generation, may decrease – the national steering committee for power and development has recommended eliminating about 15 gigawatts of planned new coal plants by 2025.

Granger Whitelaw:  just in the next couple of years, obviously asked you to help our pollution out significantly as well. Certainly, looking at renewable energy in Vietnam, –  Vietnam’s power generation capacity by source you look at it is pretty spread out. Coal is about 18 and a half, 19%. hydro and small hydro is about four and a half gigawatts. gas is about 7.2 gigawatts. and large hydro is about 16. If we can move away from coal and get into other renewable energy, solar, hydro, and any other type of energy that reduces the pollution, it would help out significantly.

Granger Whitelaw: And this is a great place to invest, right People now are really looking at solar panels for, their manufacturing businesses. It’s a, it can be a primary source of energy. It can also be a backup source of energy, right

Granger Whitelaw: For, storage We’ll need better battery power, battery storage, for the, solar and other, power that we create. And that’s a big issue, right You can kind of generate this power, but you need to be, need to be able to store it. You need to be able to access it. and it’s certainly participate in the financial part of it as well. I would really, offer to anyone listening here today, look at renewable energy, look at how your company can benefit long-term from getting into a renewable energy plan. Certainly if you want to learn more about that, I’m happy to discuss it with you. And there are a number of organizations around who are doing a lot in this area, infrastructure in general, look at that.

Granger Whitelaw: And I always say look at partnerships now in a down markets where you’re going to feel economic stress looking –  at partnerships or rolling up and acquiring other companies or partnering and joint venturing with companies to help your cash flow, to help with revenue, to help expand your market. And really just to give you some more protection. And the down market is a really smart play. I know speaking of e-commerce earlier, LaFlair went out of business recently. I think they’re looking for a buyer or a partner, certainly they have a different business model than Tiki and some of the other companies, but there’s a play there. There’s another company last year, I don’t remember. It’s not it’s Zavros or something that, that, that is certainly a player, was a player in delivery. and they, they did not seek out a partner in time.

Granger Whitelaw: So if you are in the manufacturer industry or if you’re in eCommerce or if you’re in digital or if you’re in technology, and you are feeling the stress of the market, or if you start to see it and feel it –  you don’t want to lay your people off, You want to continue growing your business, look at partnering. Partnerships are key and they can really be incredibly beneficial if you can kinda just forget about the ego part of it and figure out who’s going to run it, who’s going to be in charge. you know, get through those conversations. Look at the bottom line, look at how it benefits your employees and look at how it benefits you long-term. Because as we all say, 50% of something is better than 100% of nothing. Right.

Granger Whitelaw: I’m rambling a little bit today, but you know, there’s so much going on and so many things to think about right now in this economy, in this market. My message really is – invest at home. Invest right here. This is the best place that you can invest your money, right here in Vietnam, right here in Southeast Asia. Get smart about it, thoughtful about it. Partner up, find guys that you can do stuff with here in, guys and gals you can do stuff with here in Southeast Asia and, and you’ll be much better off than I think you can imagine – when this thing turns around. And I do expect it to turn around soon.

Granger Whitelaw: That’s it for today, for your Monday morning coffee. I hope that I sparked something in your mind to think about for the week on Friday. I will profile a company that I think is a great investment for you at this time, and an example of how to partner

Granger Whitelaw: until then, have a great week. Keep washing your hands. Hopefully the kids will be back at school and, they’ll have some, good times and the parents will have a little more focus at work — and hopefully the stock market will level off here and get some common sense back into the trading. That’d be a good thing for everybody. Sometimes common sense is hard to come by

Granger Whitelaw: until we speak Friday It’s Granger Whitelaw, for The Lotus  – have a wonderful week.

The Lotus Talks is produced by The Vietnam Group and Hosted by Granger Whitelaw.
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