Setting Sail for Pacific Wealth

Hello, my name is Martin Hutchinson, and I am the chief investment strategist for Pacific Wealth, a new publication that expands the scope of Australian Edge to include countries in the Pacific Basin. I’m delighted to be bringing you an investment portfolio that will focus on this region, which remains the world’s most economically vibrant.

We are changing to Pacific Wealth for two strong reasons. First, although there are still many great Australian companies (and eight from Australian Edge are in my new portfolios), the slowing Australian economy and changing nature of the Chinese economy make investing in Australia less attractive than before.

Second, through surveys we know there’s a strong desire from Investing Daily readers to tap the boom area of the Pacific Basin. In fact, by investing in countries such as Japan, China, Philippines and even countries in South America, we can profit from the same kind of dynamics that have boosted Australia in the past. Only now, we have many different companies from which to choose.

My investing philosophy appears in the accompanying story, but first a little about my background and why I believe I’m a good guide to help you prosper from Pacific Wealth.

I was educated at Cambridge and Harvard Business School and spent 27 years as an investment banker. I also served as the U.S. Treasury adviser in Croatia, where I later worked for the country’s largest bank, Privredna Bank Zagreb, setting up their corporate finance division as well as handling many mergers and acquisitions, and private-equity deals.

PW 1505 Page 2 Best CountriesIn 2000, when the fun jobs in Eastern European banking dried up, I switched to financial journalism. At UPI I worked as business editor and wrote a weekly column, “The Bear’s Lair,” which still survives. Then I spent eight years as a correspondent for Reuters Breakingviews before applying my knowledge of investment banking and markets to two investment newsletter services that I ran for Money Map Press.

My Ties to East Asia

During my banking career, the Pacific Basin always fascinated me. Along the west were the world’s fastest-growing economies: Japan and Southeast Asia, with China later joining the parade.

To the east, western Canada and the western United States were the fastest-growing regions of those countries.

From personal observation, I found that the Pacific countries of South America—Chile, Colombia and Peru—were much better governed and likely to succeed than better-known Brazil, Venezuela and Argentina.

My interest in the Pacific Rim began in my childhood, when the British government posted my family in Singapore for three years. We set sail in the typical British Empire manner—port out, starboard home (the origin of posh) on the S.S. Chusan—as the ship’s orientation shielded us from the hot sun in the Red Sea.

But we were not the typical British colonial family. Both my parents were fascinated with the local culture, my father learning Mandarin Chinese and Malay while my mother learned Tamil.

My understanding of the region is something I inherited. When Singapore’s Lee Kuan-yew came to power in 1959, most local Brits feared his alliance with anti-colonial Communists, but my father approved of him.

He believed Lee was a good manager with the right ideas and would help Singapore prosper. Father was right. Singapore was perhaps the greatest economic success story of the late 20th century, rising from impoverishment to a GDP per capita almost 50% greater than the United States, based on 2013 IMF data.

That early experience taught me that when selecting foreign investments, geography is just as important as the balance sheet. A company may be wonderfully run, but if it’s headquartered in a troubled country, its shareholders probably won’t make money. The country’s economic problems will bedevil the company and sticky-fingered government administrators will ensure any wealth is siphoned off to them.

The Pacific Proposition

I am excited to bring you Pacific Wealth. The Pacific Basin region has by far the best concentration of well-run economies with fast growth rates, which make the best long-term investment destinations.

And the region’s best companies need extra research to uncover, both in terms of their country’s governance and the reliability of their own data. I am happy to use my decades of experience in the region and worldwide to bring you these investment opportunities.

I hope you agree with me that this is an exciting prospect. Let’s begin!

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