December 3, 2017
December 3, 2017


There’s a lot of material here today, so buckle up…


This is more of a comment than a question.

In regards to Vietnam, I highly recommend you visit there on your next trip. I was there this past march, and the entrepreneurial spirit of the people truly amazed me. I have traveled to many countries, and I would have to say I believe the vietamese people are harder working than any other country I have been to. (I have traveled to over 50 countries, and lived in four different ones – canada, venezuela, gibraltar/spain and costa rica).

My view of vietnam can be best summed up by these words that a man I met told me. “Us Vietnamese, when you think of us, you may just think of the vietnam war, and possibly our fight against the french before that, but we’ve been fighting for the last 1000 years or so. Now, we’re tired of fighting, all we want to do is work, make money, provide for our families and have a better life.”

This was told to me by a tour guide to the chu-chi tunnels. He was a former interpretor for the americans and soldier for the south vietnamese army. At one time he intrepreted for the american secretary of defense, robert mcnamara (sp). I feel i was incredibly lucky to meet someone like him, and the stories he told of his time in jail, fighting and then his life afterword.

I would note also that Vietnam has had a huge population explosion after the Vietnam war. As my tour guide said, “Vietnamese woman, number one!” eg: the demographics of vietnam are without par really when it comes to potential economic growth.

The issue with vietnam, like many of the less developed asian countries is corruption. China/thailand/vietnam/cambodia are all rife with it.

Vietnam also has huge infrastructure issues, with the roads being simply atrocious compared to other places in SE asia. Crossing the street was an interesting experience in itself i must say.

I do not know what investment possibilities exist in Vietnam (it still being a communist country officially), but on your next trip, I would recommend you not pass it by. Based on the spirit of the people there, and their work ethic, i would expect much faster growth there than in a place like cambodia (where i have also been to).

I found these comments interesting, so decided to republish them.

Hey, Mr. Kupperman I am a junior in college. I wanted to know if you can give me some advice on where I should begin towards becoming a good investor? I really enjoy the field of investing and have been interested since 17. Are there any books you recommend me read that you read when you first started out or anything that you are currently reading that would help me out? I would also like know what is your thought process as you read and develop investment ideas. I would really appreciate it if you would help me out with these questions. Thanks a lot and I enjoy your blog!!!!

This is a difficult question to answer in a blog. Subscribe to my friends newsletters in the ‘friends of kuppy’ section. Those guys are all very successful investors. (I’ve been meaning to add a few more friends there). I rarely read anything on investing itself. After you’ve read a few good accounting books, go read financial history. This stuff all repeats. You just have to figure out which cycle you think we’re in. I recommend Marc Faber’s ‘Tomorrow’s Gold’ as the best book ever written on investing. Besides that, find some smart guys you trust and follow what they’re doing. There are some guys like Jim Rogers, Bill Fleckenstein, Marc Faber, etc who have consistently been right about what’s going on. Watch them on youtube if you don’t want to pay for their services.

When it comes to actually investing, unless it’s completely obvious, don’t bother. Save your ammo and wait for the layups. That’s the best possible advice. Find a trend you believe in, find the best companies in that trend and then make sure you’re right about the trend. You get a few layups every year. Just be patient and wait for them. Too many people invest in mediocre situations when they should be waiting.

First let me say that I really enjoy reading your insights on this blog. I wanted to ask your opinion on whether the strict criteria of Cambodia banks may actually hurt growth in the country due to limited access to capital. If there is a financial culture in Cambodia to avoid ANY financial risk, then it seems there would only be a few companies with the ability to have access to any kind of capital at all.

I’m not so sure that all banks in Cambodia are run with this much risk discipline….

If there isn’t much debt financing, it means that businesses are much more reliant on equity funding. This is a much safer and saner way to build a company and an economy. Equity funding will reduce economic volatility. It may slow the growth of the economy in some regards, but it also ensures that only the best ideas get access to capital and then that those ideas have less competition and higher returns on capital. If our country were more like that model, I think we would have less problems in the long run–especially as we are now learning that much of the “growth” of the last decade was ephemeral and not actual wealth creation.

First, I would like to thank you for all that you have written on your blog. It is great learning from you.
I have been convinced that playing in the small-cap space is an ideal place for a small investor.

My question is:
Because the universe is much wider in that space, does it make sense to be a master (more insight) of a few growing and sustainable industries than being a generalist(less insight)in many industries? As you know that space is more volatile and less predictable.

Tweedy Browne/Ben Graham investors are seen as generalists and have superior quantitative skills and Buffett/Munger type investors are specialists and have superior qualitative skills. Tweedy Browne/Ben Graham types hit more singles and doubles, while the Buffett/Munger types hit more grand-slams.

I was just thinking of covering four broad industries and building a solid reputation as an expert in it and then start a fund based on areas of coverage. Please tell me what you think.

There’s no possible way that you can be an expert in everything. There will always be a special situation where it may make sense to learn a specific business, but in general, I have chosen to find sectors that are undergoing massive growth and then focus on those sectors. That means that I’m always learning something new, but I’m usually specializing in only a few industries at any time. Over the past decade, I’ve gotten to ‘know’ dozens of industries, but that’s only because I’m searching for what the next big thing is. If you have a good ability to analyze cash flow and returns on capital, you can ‘learn’ about any industry in a weekend. The key is to make sure that you are buying the best operator and you get your secular trends right.

Think of it this way: If you decided that you wanted to be an expert in the banking sector, even if you owned the best companies, you would have been nuked. Smart investing wouldn’t have mattered. It’s all about getting your trends right. There will be a time to invest in banks, but we’re years away from even thinking about that yet. By being stuck in a few sectors, you may just have the wrong sectors and miss the bigger picture–which is what happened to so many investors in 2008.

Focus on growth, investors always pay up for growth. I spend most of my time looking for the growth. Once I find my sector, choosing the individual companies just isn’t that difficult. If you have a sector growing at double digit rates, even if you get part of your company specific analysis wrong, you will still probably make money–or at least you won’t lose much. If you chose the right companies, you’ll have huge gains. When it comes to finding the right companies, always buy the best ones, even if they cost more. It’s ALWAYS worth it to pay up for the best.

A friend of mine interviewed me right before I left for Asia in October. The interview was posted over the weekend and it may be of interest to readers.

Part 1

Part 2