Every time that I am wrong the world makes a little less sense.

I recently read a full-page advertisement from a respected Fund Manager.  They were advocating that as a private investor your money should be placed in the hands of global businesses for the long term. That currently it was far too difficult to anticipate stock market movements with Mr. Trump being President of the U.S.A. Also, as a U.K. citizen with the uncertainty of Brexit, a passive approach with the bedclothes pulled over our heads was probably the best approach for the next few years. In other words, let the finance industry take the strain and “your money”.

Now that is strange, because after the declaration of the Brexit referendum as sterling fell in value it was straightforward to move your money into dollar based funds and reap the gain. Then as the months passed it became obvious that the U.K. economy was not going to hell in a handcart, in fact the reverse was taking place. The economy was strengthening and real inward foreign investment was taking place as exports rose and unemployment continued to fall. So moving your money back into U.K. funds as sterling started to strengthen was not a difficult decision, and those who did have enjoyed further substantial gains. This is not alchemy, but just common-sense if you have the knowledge from up-to-date Saltydog performance numbers, and the desire and ability to trade cheaply on fund supermarket platforms.

Another area of the market that continues to show the opportunity to make gains is of course the technology sector. This is being borne out by the numbers and by logic. Four out of five of the largest companies on the US stock market are technology companies. There are three main things that over millenniums have restricted the progress of human life and these are Energy, Life-span and Intelligence. All three are now under attack as science moves forward at an exponential rate.

At this point it is worth demonstrating what exponential growth means.

sdiblogOne common textbook example is that of folding a piece of paper that is 0.1mm thick.  Fold it five times and it is 3.2mm thick, ten times and it is 10cm thick and at 25 times you are at several kilometres. At 42 times you are past the moon, and at 50 it’s toast time as you approach the sun! As you can see growth starts slowly and then it goes crazy, and that is what is happening with science at the moment.

We all know about gene editing technology and its potential for re-writing the rules of life, the removal of disease and the possibility of redesigning the human body to prolong life. Again, we have also read about the supercomputer named “Watson” which played and beat two human champions at the game of Jeopardy. What we may not know is that afterwards Watson was uploaded onto the cloud, and its knowledge and logic became available for other computers to use. Artificial Intelligence made yet another step forward; it is not of the future, it is already here.

The arrival of virtually free solar energy is only decades away and the modern lithium battery is going to transform solar into a genuine power option. The battery is to solar what the tanker and pipeline are to oil and gas. The world economies have invested more than £350billion into acquiring renewable energy. Companies like Amazon, Google, Apple and Microsoft are also leading investors. This spells the eventual death of carbon fossils as an energy source. No wonder that the Saudis are starting to dispose of Aracom, their oil company, and are also investing into solar technology. Imagine a world with free electricity, cheap fertilisers and abundant potable water. This is all on the near horizon.

A statistic that I read recently is that we humans consume around 400×10 to the power of 18 joules per annum. The earth however receives this amount of energy every HOUR. We just currently cannot capture it, but in the future who knows?

Three months ago, I discussed the progress of six technology funds all of which had made twelve month gains of between 40% and 50%. They have continued to make good progress in the last three months, although in sterling terms they have been battling with the dollar exchange rate as sterling has strengthened. This is due to the fact that so many technology companies are dollar earners.

 

AXA Framlington Global Technology fund   …12%

L&G Global Technology fund                        …9%

Pictet Robotic fund                                       …12%

Scottish Mortgage Trust fund                      …18%

Polar Capital Technology Trust fund           …16%

Ishares IV plc Automation                           …13%

These funds are of course normally described as high risk and volatile. A question today however might be how true is this description in tomorrow’s world? You must come to your own conclusion, but remember that a conclusion is a place where you get tired of thinking!

 

Investing isn`t about waiting for the storm to pass. It`s about moving to a place with fewer storms.

A Saltydog subscriber has recently asked whether there is potential for investment into Myanmar. I have done some investigation and my conclusion is that it is not there at the present.

Myanmar (formerly Burma) along with Thailand, Vietnam, Cambodia and Laos form the Greater Mekong region and they are all members of the ASEAN Free Trade Area. It has a population of around 50 million. In 2011, the Military Junta relinquished power and President Htin Kyaw was democratically elected – although the Nobel prize winning Aung San Suu Kyi (recently released from house arrest), is said to be the person that rules the country from behind the scenes.

Inward investment has taken place since democracy was re-established, and Singapore and China account for approximately 70% of this inflow. The country is also aided by the Asian Development Bank. Nevertheless, two corporations would seem to influence and dominate most investments and they are the Myanmar Economic Corporation (MEC) and Myanmar Economic Holdings Limited (MEHL). Both of these corporations are linked to the military and would appear to be steeped in corruption. This said, it would appear that health, education and the country`s superstructure are actually improving, as the new government drags the country into the 21st century. In 2016 the USA lifted sanctions, despite there being little evidence of any reduction in the inheritant corruption linking business to the military. In my book, this is not yet a place to risk my money and anyway I could not find a fund representing Myanmar. However, that is not a problem as I feel that there are less stormy places in the Greater Mekong region – Vietnam is one such place.

The population of Vietnam is around 93 million with an average age of thirty-two. Half now live in the cities and have aspirations to live a western life-style including the use of phones and the internet. The country is self-sufficient in oil and rice and supplies their surplice to the rest of the Asian community. China, America and Japan have off-shored manufacturing here for a number of years due to the low wages and the “can do” attitude of a young well-educated people. So when the Chinese and American economies are doing well, then so is the Vietnamese. You can see this from the five year graph of the VinaCapital Vietnam opportunities Investment Trust fund.

sdi2

It is evident that although it’s done well, it hasn’t gone up in a straight line. If you invested in 2012 then there are a couple of periods when the performance levelled off and even dropped back. If you had been watching the numbers and enjoying the rise, then this would have been the time to move out, whilst the storm passed over, and put your money to better use. Since the end of 2015 it’s been back on track, and in the last 12 months has gone up by over 40%.

Hopefully in the future, the ASEAN Free trade area will become self-sufficient in its own right.  Should this happen, then Vietnam could be a really good place to be invested on a more permanent basis.