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Investing in Foreign Countries

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January 19, 2011 – Comments (9)

Obviously, if you are going to invest in foregin countries you should know a basic overview of the country.  However there are a multitude of good companies to choose from many different countries.  Unless you are just very knowledgable of geography in general, how much research do you do into a country before buying a good company in that country?  For instance, my only direct Chinese holding is CCME.  I have been reading for a decent amount of time that China may be a bubble.  I have read arguments for and against.  I also know about the RTO frauds, RMB re-evaluation, how much of our debt they hold, the overview of how their politicla system is, and some demographics.  Is that enough?  Also for Brazil, I hold BRF...I know they have the Olympics in 2012 and World Cup in 2014.  I know their GDP growth is ridiculous, and it hasn't been for too long that it becomes suspicious.  I also know plenty of people that would want to travel there if it was safer, and it is becoming safer.  Their politicians are becoming more stable, their new car market is 4th largest in the world, and they are becoming consumers.  That clearly is not a ton...how much research do you put into 1) buying foreign etf's 2) buying foreign adr's?

9 Comments – Post Your Own

#1) On January 19, 2011 at 10:45 AM, srkenne264 (99.54) wrote:

I agree, the DD in working in other countries stock markets is necessary.  I have had the privilige of getting to work 3 expat assignments with my company and I learned a lot each time (Canada, Norway, Singapore).  Mostly, what your read isn't the reality in the Country.

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#2) On January 19, 2011 at 10:48 AM, russiangambit (29.42) wrote:

The best way is to travel there and live there for a couple of weeks at least,preferably among the local population. The next best way is to talk to people who are originally from that country. No amount of reading alone can teach you about  a country because you filter all the information through your own expectation of what it should be.

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#3) On January 19, 2011 at 11:17 AM, JaysRage (89.76) wrote:

You better know a fair amount about the country your company operates in for a number of reasons.   You need to know why your company will (or will not grow), obstacles, competitors, risks......etc   It's one of the reasons why I continue to invest in China.    It takes time and effort (and experience) to learn to invest successfully (especially in small caps) in individual stock in another country. 

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#4) On January 19, 2011 at 12:11 PM, lemoneater (78.23) wrote:

There are some countries I automatically avoid investing in. Russia is one. I read an article about how the government will sometimes swoop in and take over companies so that adds more uncertainty than I feel comfortable with. This is no reflection on russiangambit and zloj whom I respect highly.

I've heard very mixed things about India, but TTM has done very well for me.  

I've also invested in TSM. I'm not entirely clear on how Taiwan relates to China, but I assume it is much more democratic and possibly more stable. I thought investing in a semi-conductor foundry made sense based on how insatiable our appetite for electronics appears to be.

I have a fondness for Britain and a shared cultural heritage. Since I've visited there and have a relative living there, I feel some ownership. I have PSO, UL, and TSCDY.Pk.

I also have CEL and BSI from Israel. For their size, they certainly have a wealth of investment opportunities which pay very high dividends. (I'm not sure why the highest dividend payouts I've found are from this country.)

 

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#5) On January 19, 2011 at 3:13 PM, Valyooo (99.45) wrote:

I avoid Russia entirely as well.

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#6) On January 19, 2011 at 3:41 PM, lemoneater (78.23) wrote:

Almost 30% of my portifolio is foreign stocks. If I counted multi-national companies like HNZ, the percentage would be even higher. I had no idea all the products HNZ sold internationally. It's more than just a ketchup company!

I think there are some wonderful international opportunities, but sometimes investing in a certain country like China almost seems like a fad. I do like reading the articles Motley Fool posts after visiting foreign companies. All the best with CCME. I've heard good things about it!

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#7) On January 20, 2011 at 3:17 AM, valunvesthere (< 20) wrote:

Many mentioned Brazil, Russia, China and left out India.

QUESTION #1 Does anybody know B.R.I.C?

BRAZIL

RUSSIA

INDIA

CHINA

SOUTH AFRICA (B.R.I.C. formerly invited SOUTH AFRICA in 2010 and is now known as B.R.I.C.S.).

QUESTION #2 How come nobody have insights in India?

QUESTION #3 Will B.R.I.C.S become super economics power in the next few decades?

Valunvesthere

 

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#8) On January 20, 2011 at 3:31 AM, valunvesthere (< 20) wrote:

All apologies to Lemoneater who stated: I've heard very mixed things about India

Valunvesthere

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#9) On January 20, 2011 at 9:48 AM, russiangambit (29.42) wrote:

#7 - with the number of indians in the US I don't think ti is hard  to get insight into India. I invested in the past in some of their IT companies. As for the rest of the country - it is corrupt no less than Russia, just less violent in how it is done.

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