Decoded: A New Book from One Road Research

 
 
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Today, in partnership with one of our associated companies RBooks, we published a new book on trading and the necessary mindset behind it.

Giai Ma: Kinh Te – Dau Tu – Gia Dinh, or Decoded: Economics – Investing – Family Values was originally conceived for the Vietnamese market, for Vietnamese, as it focuses strongly on the unique values and how to best capture financial success.

Much of the book centers around utilizing models to best understand the context, or rather the world, that we reside in.

As I’ve touched on a few times before, Vietnam (and other developing nations) typically follow the ACD model, which stresses the step-by-step development of a nation’s economy. 

Vietnam is currently going full-steam-ahead in the manufacturing stage, utilizing a top-down economy where the central government holds a steady control of many large corporations and SOEs. 

The result?

Think of it in these terms — Vietnam is currently existing somewhere between the pull of traditional against modern, of the old and the young. In the same vein, this contrast can also be expressed in the transition from chaos to order. 

The more built-up and organized an economy is, the more order is present. Conversely, the less developed the economy, the more chaos.

Let’s look at this in terms of the produce market in Ho Chi Minh City.

At the top of the chain, you have the corporation owned grocery markets — large facilities that combines the fresh produce from the central highlands and ingredients for domestic foods with imported meats, cheeses, and other items for the globalized customer. The isles are clean, with a focus on high-end service, fresh food, and quality.

This tier is relatively new, propped up by the increasing wealth and widening tastes of a growing consumer culture.

At the same time, there exists the small privately-owned shops and stores, which have been selling the same products as supermarket chains do for years and at a much smaller scale. These are the friendly neighborhood mom-and-pop shops, serving the close community.

Think of the hardware and small grocery stores that were everywhere in the United States prior to the rise of giants like Walmart and Home Depot.

 
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And like these stores of the past, the small grocery shops in Vietnam are soon-to-be history as well.

Another type is the wet market — open-air vendors run by street hawkers, the loud bustling centers of trade where you can purchase all sorts of items and not just agricultural products. Almost everything that is locally produced can be found in at least one of the markets in the city.

In these wet markets, prices, and possibly quality, are quite low. Shoppers arrive early in the morning to purchase the needed goods for the day and return almost daily.

The logistics are built off personal relationships that have been maintained for years, and many often come to these markets because that is what they know.

This analogy serves as a good microcosm to how emerging economies like Vietnam’s develop, including the stratified organization (and related chaos) that results from these changes.

 
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One such trait is that the development of these economies relies on regulation, control, and organization to be successful. However, resources (be it money, influence, or natural) are finite, and therefore must be deployed correctly to make the most impact. 

Conversely, deregulation (or rather, a lack of regulation) is the non-existence of control…
In other words, the chaos of the local open-aired wet market.

But this reflection raises a new question — coming from the understanding that deregulation allows liberty, and vise-versa, does chaos therefore equate to liberty? If so, what are societies relinquishing as they continue to develop, all in the name of economic development and financial success? 

Where does freedom lie?

As always, if you’d like to continue the conversation, please send me an email (or reply directly to this message).

 
Peter Pham