Hardcover: 240 pages
Publisher: Wiley (June 3, 2005)
Language: English
ISBN-10: 0471719838
ISBN-13: 978-0471719830
Product Dimensions: 9.1 x 6.2 x 1 inches
Denning's book focuses on getting returns not only from an uptrending market but also from a downtrending one. His definition of a bull hunter is basically an opportunist. It is a plethora of opportunities in today's world because of the introduction more sophisticated market instruments like options, ETFs etc. Denning also highlights the trend of the global economy and the gradual shift of wealth growing from the West to the East.
Fundamentally, wealth can only be generated by means of an increase of capital intensive investments like manufacturing and infrastructure. This forms the basis in powering the economy. Services, financials and IT all follows the growth of capital intensive development. When the latter exceeds the former i.e. financial activity far exceeds real economic activity, a bubble might be in development. This can be seen when capital(financial) markets capitalization exceeds GDP.
The decline of England to US and currently, US to China is due to several factors. The latter's factors currently being
1) Increase of consumption leading to increase of trade deficit
2) An aging population
3) Lesser tangible assets
The 4 threats US is facing is
1) depreciating dollar
2) housing issues
3) increasing debt and
4) obligations to aging population
Denning advises focus on infrastructure development in the emerging markets like China and India. This translates to an increase in demand for oil and gas and other resources like food commodities.
His case on China:
1) China is smart enough to let foreigners build the capital/infrastructure in the country
2) There is a demographic danger in a sense that migration from the rural to urban poses a huge challenge for the politicians.
3) He advocates buying Western companies doing business in China instead of US-listed china companies due to regulations and risks involved.
4) strong political risk with Taiwan
His case on India: (1 billion populations)
1) The economy is domestically driven; self-sustaining
2) Huge political risk with Pakistan
3) Needs foreign investment to grow like China
4) Movement from rural to urban can only be achieved by intensive investments in infrastructure and transport.
Thoughts for equity focus investors:
1) Commodity markets esp food
2) money migration from the West to the East
3) Global economy alignment due to a debt-burdened US dollar.
Strategies for tomorrow's market
1) Look towards emerging markets and using ETFs
2) Looking at the rule of 3 - telco, financial, energy resources
3) Dollar and foreign trade - look at companies where the sector is exporting and contributing to surplus' of the country. For US, this includes chemicals, aerospace, scientific instruments as they are difficult to replicate.
Benefits of ETFs
1) Diversification (in sector)
2) Focus (on growing markets)
3) Eliminate fund manager risk
4) All-day and strategic trading
5) Low cost - tax efficiency, low fees, no minimum investment
6) Transparent holdings
A pretty good book outlining the trends in the future.
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2 comments:
Hi pau :)
Hoho, great summary you had there :P These days I don't do such an indepth summary anymore. In fact, I returned the book (I borrowed from library) first before coming back and blog about it.
This will force me to review and recap what I had read, so that it will be internalised, rather than using the book review to write down a lot of info so that I can review it in a later time. This means that whatever I reviewed is already in me.
Maybe you can try out this method too? :P
good idea. I usually take notes when i read esp if it is a good book.
The summaries i write here are for others who don't have time to read these books but want to get a general overview. but yea, you are right, i have to internalize it somehow.
Trying to do that when i do my analysis and blogging in another place i have just set up. :)
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