One Crucial Mistake I Made in Asia in My 20s
Many Western investors have completely misunderstood Asia.
Even those here on the ground have trouble grasping the regional differences, in addition to its cultural, political, and economic nuances.
'Western' ways of investing, based on micro-analysis, free market capitalism, democracy, and corporate transparency can make billions on Wall Street... but often don't work here. Asia simply developed differently than Western economies.
Today's China, for example, has literally been a 'command' economy from Day 1, post-declaration of the People's Republic of China.
Today's Vietnam has been a 'command' economy from Day 1, post-U.S. withdrawal.
Today's South Korea has been a 'government-run' economy from Day 1, post-Korean War.
Today's Japan has been a 'government-steered' economy from Day 1, post-WWII.
Today's Taiwan has been a 'state-drawn' economy from Day 1, post-1949 when Chiang Kai-shek declared martial law.
The 'free market system' we are so familiar with - to some of us even an ideology - does not apply here, nor is it the only way to 'grow' an economy.
That is a lesson I learned the hard way.
In my early 20s, I started my financial career at Royal Bank of Canada, later became a prop trader on Wall Street, and eventually moved to my 'homeland' of Vietnam to try my hand in the capital markets.
And little did I know when I arrived pre-global financial crisis, I was in for a rude awakening. Whatever 'grand' plan I had - just come here, invest, and give it a go... went to shambles within 3-4 years.
To cut a long story short, my positions took too long to turn a profit. Maybe if I waited they would have come to fruition, but in the grand scheme of things...
Time plays a crucial role in the cost of capital.
Hence I want to communicate to you the message that Asia is so, so different than what we are familiar with in the Developed West. Investing in Asia requires local insight into what governments are doing (and quietly planning), and I hope to provide you a clear way of understanding the region so you don't have to go through the pains.
That's why I've spent the last 10 years developing proprietary investment models to properly analyze growth in Asia's sectors and regions. The most comprehensive of these models is now known as One Road Research's Asian Capital Development Model.
The Asian Capital Development Model deconstructs the 'engine' of Asia's spectacular growth, while generating successful stock highlights for members of Asia Insider, which is our premium publication.
Asia Insider's May issue highlighted an under-the-radar Malaysian stock uniquely-positioned to benefit from a surge in government-backed debt.
This month's issue highlighted a Chinese stock that's gained access to credit 'shortcuts' under China's 'Made in 2025' initiative.