Thursday, February 6, 2014

Marc Faber likes Vietnam

I like Vietnam. The economy has had its troubles, and the market has seen a big decline. I want you to visualize Vietnam. 

South of Da Nang is China Beach, and north are other beaches. This was the largest American base during the Vietnam War. Coming back to tourism, there is a new airport in Da Nang with international flights. The place will be like Benidorm, the Spanish resort area, in a few years. Benidorm used to be nice, and then it became overbuilt and cheap tourism arrived. Pockets of Asia, including Indochina and India and Bangladesh, are underdeveloped. Eventually there will be road and rail links, and the area will become a giant free-trade zone. There are many investment opportunities here.

I am not keen to own Singapore Airlines or Cathay Pacific Airways because they have a lot of competition from budget airlines. But I like some airline-servicing companies based in Singapore, including SATS [SATS.Singapore], in the catering business, and SIA Engineering [SIE.Singapore], which overhauls aircraft. They have subsidiaries in many Asian countries. The stocks yield around 4%. They aren't supercheap, and the Asian markets generally aren't cheap enough for me. But longer term, if you want to park money in Asia, both companies will do well.