Posted on May 13, 2009 - by La Papillion

Top-down approach in investing

The Little Book

I usually adopt a bottom up approach towards investing, so it’s good to do a top down approach too, just to see the broader picture. I read this little book series (yes, finally completed everyone of them!) called Bull Moves in Bear Markets by Peter Schiff and in it, there are a very investment themes to take note of. Basically the author is very bias towards the near term future of US, notably because of the high amount of debts that it is mired in and the unwillingness of FED to raise the interest rate to curb inflation, thus running the risk of hyperinflation.

Here’s a few countries that might do very well in the future:

1. Australia – This is a country rich in natural resources, with lots of supplies of natural gas and metals. Being very close to China, who is very likely to consume huge amounts of metals and energy in the future to fuel its economic growth, Australia is thus likely to participate greatly in the commodities bull run mentioned by Jim Rogers and other such ‘visionaries’. I think its close proximity to China makes it a good exporter of commodities to China at a cheaper price.

2. Canada – Stupid also mentioned about the loonies. It is the largest foreign supplier of energy, including oil, gas and uranium to US. Canada is resource rich with a lot of metals, agricultural commodities and energy. Again, another commodities play, with likely appreciation on its currency, like Australia.

3. Singapore – Yes, this little tiny dot is mentioned in the book as well, which I’m pleasantly surprised. Read more…

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