Find out what you need to be aware of and how to do it:

Looking for higher return on investments; the next big individual run-up; willing to take on higher risks; there is no magic you need to buy low and sell high. Now we all know it’s not that easy, so to maximize your chances

you must be able to understand basic accountancy principles, a company’s annual report, stock market history and financial news.

Then, you need to define your goal and plan on how achieving it (your goal towards financial satisfaction).

The biggest question for the “amateur” investor would certainly be “How much money do I have to invest?” Although, you should always try to figure out first – “How much money you can afford to lose?”,

So, be sure you:

1. Only trade/invest money you can afford to lose!
2. Do not jeopardize the future of yourself, your family, by investing all your assets in unstable stocks; DIVERSIFY (in the nature of your investment, so not just stocks), look into real-estate, other businesses…
3. If you have a stable monthly/annual income, keep at least 6-9 months living expenses for you and your family in your savings account before you start investing with the “extra cash”.
4. Don’t look at it like a source of revenue that would take care your basic living expenses; Look at it like a source of funds that would allow you to buy “the extra stuff “ you don’t really need.
5. Never invest in stocks or any kind of funds if you already have a bad debt, credit card debt or any other high debt.
6. Finally, be ready to make mistakes and learn; Do not go against a “trend” and cut your losses short; Furthermore, you don’t have to let your emotions interfere with your daily trading (sell if you were wrong and don’t keep it hoping it’s going up again)

Now, once you figured out you have enough savings to start trading, go ahead and:
“Open an account with a broker”

There are two kinds of broker with which you can start with: Discount Brokers and Full-service brokers.

Discount brokers cater well if you are willing to do your own research and make your own investment decisions.

Start by finding one that fits your needs at best, i.e.: maybe with the lowest commissions per trade, or located in your home country or who deals specifically with Asian markets.
Some famous examples include: Interactive Brokers, Charles Schwab and TD Waterhouse. If you decide to go for less famous ones out of your home country, be sure they are certified, Google the company name and check records. For instance, “BOOM Securities” in Hong-Kong: gives access to almost all Asian markets and is a fully licensed broker.

Register, send the required documents, get your private access and buy your first stock!

Go for a “full-service broker” such as “J.P. Morgan”, “Barclays”, “Deutsche Bank” if you wish to have access to more markets, be given “expertise and advices” and don’t have the time to do your homework. If you choose the “service” then you will also pay higher commissions and fees than you would with a discount broker.

Finally, you should be aware that most Asian markets are open to foreign investors except India (closed to non-indians). Some exceptions exist in China or Thailand but you shouldn’t be too concerned if you just started “trading”…

So to begin with, stick with the larger markets

where you will have plenty of choice and don’t bother looking into complicated deals. If you’d ask me which one to choose between a “full-service” or a “discount” broker, I’d say go for the discount broker if you know what the basics are (P/E Ratio, P/E Growth Ratio, ROE, ROI, EPS, Dividend Payout Ratio, Net Asset value, Turnover & Leverage Ratio, Current Ratio) or go for a full service broker if you have no idea of what you just read.


A.S.- partner @ dragongate.asia

Bellow list of advices for the “amateur” investor who wishes to start trading with Asian corporations.

1. Look after all Asian Economies; pick the right sectors and industries

First, select and focus on one or two industries. Regularly, browse the websites of national English newspapers to have a better idea:

China: Shanghai News - China Daily
HongKong: South China Morning Post - The Standard
India: Business Standard - The Economic Times
Indonesia: Jakarta Post - Tempo interactive
Japan: The Japan Times - Japan Marketing News
Malaysia: The Edge - Business Times
Taiwan: Taipei Times - China Post
Thailand: Bangkok Post - The Nation
Vietnam: Saigon Times - Vietnam News

Overall: The Wall Street Journal - Asia Edition & The economist

2. Be aware of laws and regulations

Some Asian market regulations have weaker rules than you might have in your home country (i.e: accounting standards, corporate governance). Additionally, corruption and fraud is still actual and less “looked after” in emerging markets.

3. Now, the first choice should be for Asia’s larger markets

HongKong, Shanghai, Singapore, Tokyo - NewYork, London for GDR’s.

4. Second choice is for secondary listings in London and New York

American Depositary Receipts (ADR’s are traded in US dollars, pay dividends in US dollars) and similarly, GDR’s stands for Global Depository Receipt (used in all countries outside the USA). Secondary listings are a wise choice to investors willing to buy Asian stocks since you can invest in Asian companies without going through local rules. Their price levels fluctuate according to demand and supply, as well as the “actions” taken by the underlying company; behaving like regular stocks.

BNY Mellon has an exhaustive list: Go

5. Consider Smaller Corporations

Good investment opportunities can come from company’s you would not know or think of in the first place.
A good strategy is to look for the next “hit” consumer product to be launched by a big multinational; then, find out which company (usually outsourced) manufactures the product or key components. Do your background analysis and if you invest, it is very likely that you will get more “bang for the buck” investing in this “smaller company”. In fact, the return on investment (of the new product) will have a more significant impact on the “bottom line” of the smaller company than the bigger one, thus giving your investment a higher return.

6. Think about exchange traded funds (ETF’s) and mutual funds focused on Asia.

ETF’s offer greater flexibility than mutual funds when it comes to trading (i.e.: can be bought and sold throughout the day like stocks). Additionally, ETF’s have lower sales and annual charges; thus being the better option if you want to invest in a market quickly and cheaply.

Mutual funds however (which transactions occur at the close of the market), employ full teams of analysts and strive to outperform a certain benchmark. Often, mutual funds would require a minimum investment to “buy in”, which can make them less attractive to the “amateur investor”.

There are funds that focus on one or include several Asian nations (you can find some on “http://www.fundsupermart.com” - select your market and click on “funds info” and “funds selector”).

7. Watch out for “odd lot” rules.

In some Asian markets (like Hong Kong), you might be required to pay higher fees if you sell or buy “odd lots”. An odd lot occurs when you sell or buy less than the “board lot”, for instance, you buy 478 shares when a company trades in lots of 500 (the” board lot”).

Finally, you should always asses all sides and final decisions of an investment yourself. No matter what you hear on “CNBC, Bloomberg”, read in newspapers/books, when it comes to place your hard earned money, trust no one but yourself. Do your homework and if you think it’s worth it, go for it!

Next week I'll be going into more details on how to actually start buying !

by A.S. Partner DragonGate.Asia

How do you know what the top brands are? Do you want to know retail, global, or regional? Looking at trends in reports for top brands is very interesting. Your own thinking of what they are is likely colored by where you live and/or travel. If you see Starbucks everywhere you go and travel extensively, you may think Starbucks is one of the top global brands.

Interbrand is a consultant company that publishes a yearly ranking of brands based on a brand value they calculate with their own criteria. The Global 100 is published each year in Business Week.

Coca-Cola, the ubiquitous soft drink company has been the top brand for many years.

The aforementioned and also seemingly ubiquitous Starbucks ranked 97 in the 2010 listing. Is that surprising to you? It was to me, I passed at least 7 Starbucks yesterday in my travels. It all made sense though after looking at how the data is calculated. Part of the criteria is based on a profit calculation. So, a company will be higher on the list if its profits are higher. Brand value for Coca-Cola was listed at 70,452 (m) and for Starbucks it was 3,339 (m). Quite a spread in valuations!!

Not surprisingly, 9 of the top 10 global brands are from the United States where dollar profits are higher.

Interbrand also creates retail brand rankings by important retail areas such as the United States, Canada, UK, France, Germany, Spain, and Asia-Pacific. Retail companies are not part of the global brand rankings so the companies are all different between the listings. If they were, US based Wal-Mart with a brand value of 142,030 (m) would be the top dog by a wide margin. Also, Asia-Pacific number 1 Woolworth’s with 4,015 (m) would be the only Asia-Pacific entry at 78.



Again, all of these values are based on the dollar to normalize the data. The value of Woolworths from Australia would rank 23 on the United States Top 50 Retail list. Are you surprised that there is no representation from India or South Korea in the top 10? Australia is holding strong with 3 of the top 4, but will China’s continued emergence threaten that?

Of course, competition is important. Another ranking list compiled annually is the BrandZ rankings by MillwardBrown. I liked this list for one glaring difference between it and Interbrand’s…. Apple!! The personal device juggernaut was not in the Top 100 Global Brands or Top 50 US Retail Brands from Interbrand. Apple ranks number one in the Brand Z ranking with a value of 153,285 (m).



Google, IBM, McDonalds, Coca-Cola, and GE are in the Top 10 for both Interbrand and BrandZ, it would be hard to argue their global brand strength. Interestingly, China Mobile, the largest mobile phone operator in China is the only non United States based company for BrandZ. Each listing has its own criteria and they are different. I encourage you to read the full reports if you have time. The links are posted below.


By: Matt Flax - Senior Business Advisor at DragonGate.Asia


Interbrand Top 100 Global Brands 2010

Interbrand Top Retail Brands 2011

BrandZ Top 100 Global Brands

How important is consumer confidence to your business? It is very important of course if you produce consumer goods that are luxury or non-essential. Consumers in the countries you sell in need to be confident in their jobs, the economy, and their life if they are going to purchase something they do not have to buy. Even every day staples can also be affected by consumer confidence. Negative consumer confidence may lead some consumers to consolidate daily needed items or to buy them less frequently.

Consumer confidence in each country can have different meanings for your business.

Spending by consumers makes up 70% of the United States economy, but it is only estimated to be 34% in China. Consumer confidence readings matter more in the United States then in China because a drop in consumer confidence in the United States can undo the economy if consumers cut their spending severely. The United States steep fall and slow recovery from the Global Financial Crisis can be traced to consumer spending and consumer confidence. In China, infrastructure investment like the massive build out of high speed train service accounts for a much larger slice of GDP. Still, 34% does matter.

There may not be too many surprises in looking at recent global consumer confidence readings. The Global average for Q1 2011 is a slightly pessimistic 92, a reading above 100 is optimistic while a reading under 100 indicates pessimism. The Asian/Pacific and Middle East regions are optimistic. Not surprising the United States (slow economic recovery) and Europe (Debt Crisis) are pessimistic with Europe dropping as the Debt Crisis has intensified. The one surprise may be the Latin America region dropping from 100 to 90 placing it under the United States. Another interesting point is that the United States trend line matches the Global trend line almost perfectly, although with lower readings. Does United States consumer confidence need to move above or close to 100 for the Global average to? Possibly, with 70% of a $14 trillion economy driven by consumers.

Asian and Middle Eastern countries dominate the most optimistic list while European countries dominate the most pessimistic list.

Switzerland is the only top optimistic country from Europe while South Korea is the only non European country in the most pessimistic list. Why? Switzerland has its own currency and does not use the Euro, which is under pressure from the Debt Crisis. The South Korean Won is trading near three year highs making South Korean exports more expensive in the export driven country.



Will consumer confidence in Europe, the United States, and Latin America improve?

Europe needs to likely get past the Debt Crisis that threatens the Euro currency in order for optimism to rise. The United States government is fighting over raising its debt limit and will default on its massive debt if not raised by the end of July. Consumer confidence in the United States is likely to follow which way that decision goes. Latin America was riding the 100 base line recently so, this bit of pessimism may be temporary. The Asia Pacific region in yet another set of data again looks like the place to sell your products, along with the Middle East this time.



By: Matt Flax - Senior Business Advisor at DragonGate.Asia