Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Capitalizing on Global Growth from Emerging Markets

Companies / Emerging Markets May 02, 2007 - 12:51 PM GMT

By: Michael_K_Dawson

Companies The latest revelation on CNBC is that overseas growth can offset a slowing U.S. economy enabling the big U.S. multi-national companies to continue generating outstanding earnings. Talking head after talking head have parroted this theme for the last week and a half. Well, it is nice to be ahead of a trend for a change. Over the past three years, this has been the predominant theme of stocks in my portfolios. However, I haven't limited myself to U.S. companies.


If you have read any of my previous articles, you will know that some of my favorites companies are BHP Billiton (BHP), Companhia Vale do Rio Doce (RIO) and Southern Copper (PCU). These companies provide key commodities essential to the industrialization of countries that are growing at incredible rates like China and India. Chip Goodyear, CEO of BHP Billiton, has made it quite clear that a slow down in the U.S. would be offset by growth in the emerging markets with the statements such as the following:

“The incremental copper required as that person upgrades from a Chevrolet to Mercedes is not significant.  However, when a consumer moves from a bicycle to a motor cycle to a car, as the Chinese are now doing, the incremental demand is quite substantial.”

It's great that CNBC is finally getting religion, but why limit it to U.S. based companies.

The second part of their eye-opening news is that U.S. based companies also receive a currency benefit from the declining dollar. Although the dollar has been in free-fall since 2001, it is very seldom discussed. Now, there is finally a politically correct benefit for a declining dollar. Portfolios favorites such as heavy equipment manufactures Caterpillar (CAT) and Terex Corp. (TEX) completely capture CNBC's latest money making idea. View the remaining stocks in my industrialization leveraging portfolio here .

The social and economic benefits of industrialization are desired by many undeveloped countries. Interestingly, the developed countries benefit nearly as much from their industrialization as new markets and labor pools become available. Try to envision the size of China's middle class in 10 years. Now visualize the potential consumption boom. Are you seeing dollar signs yet? Maybe these statistics from the McKinsey Quarterly will help:

  • By 2025 China's urban households will make up one of the largest consumer markets in the world, spending about 20 trillion renminbi annually - almost as much as all Japanese households spend today 
  • By 2011 the lower middle class will number some 290mn people, representing the largest segment in urban China. By 2025 this segment will comprise a staggering 520mn people

CNBC's discovery was far from earth shattering, but it did prompt me to shift my thinking to the second order effect of industrialization – consumption.

Two companies that recently reported earnings, the ipod phenom Apple (AAPL) and KFC, Pizza Hut and Taco Bell operator Yum! Brands (YUM) are ideal candidates to capitalize on the consumption theme. Yum highlighted its powerful growth in China and International divisions in its earning's press release.

  • Worldwide operating profit increased 12%. 
  • Strong double-digit operating-profit growth from our international divisions: China, +31%, and Yum Restaurants International (YRI), +25%. 
  • Mainland China restaurant unit growth of 19%.

Finally, how can one truly be a consumer without a credit card or two or three? Hello, MasterCard.

I am in the process of extending my industrialization portfolio to include companies positioned to capitalize on the upcoming consumption boom in the emerging countries. My current thinking is that Apple's slick gadgets will make it a fine center piece. 

I would love to hear your thoughts on other companies that fit this profile.

By Michael K Dawson
http://www.thetimeandmoneygroup.com/

Copyright © 2007 Michael K Dawson
Michael K Dawson founded the Time and Money Group with the aim of educating and sharing 20 years of experience on how to reach financial freedom. "Financial Freedom is freedom to focus on what is truly important to you and your family without having to trade time for a wage. It is enabled by a portfolio of income producing assets, managed by you, which generates sufficient income to cover your yearly expenses on an ongoing basis. It provides both time and money". The intent of his website is to become a repository of information to put you on the fast track to becoming financially free. For further infromation visit http://www.thetimeandmoneygroup.com/


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules