You might find today's Money Morning a little unfocused.
Instead of the usual disciplined analysis of a single subject, we flit from here to there like a ditzy butterfly. The result is a bit of a pot pourri.
And there's good reason for that
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All roads lead to Asia
Each attendee is invited to speak for two minutes on an investment-related subject of their choice. It might be an idea for a trade, a theme they are noticing, a market call whatever.
Charlie Morris started the event during the financial crisis of 2008-2009, when he and like-minded brains in the business were struggling to understand whatwas going on. It was thought that a rigorous exchange of ideas over dinner might help clarify things.
Last night was the 24th 2MC. What follows is a little dance through some of the ideas that were spoken about. Chatham House rules apply, so there's only so much I can say, of course. I can't even tell you who was there. But I will say John Paulson, George Soros and Anthony Bolton didn't make it this time around.
Each attendee tends to talk about something related to their specialist subject, so the topics are wide and varied. But sometimes, over the course of the night, broader themes tend to emerge. And one such theme that emerged for me last night was a bullishness about Asia.
One Asia-specialist fund manager declared that for five years or more he had been coming to these dinners, forced by the circumstances of the markets in which he works, to sit there quietly without anything terribly positive to say. But now he feels the structure is right and we are at the beginning of a secular bull market in the region from India to Vietnam to China.
We in the West slashed rates and printed money to bail out the system post-2008. As a result, businesses which should have died were kept on life support. In much of Asia (Japan excepted), on the other hand, no such zombies were created. What is emerging now is a lean, fit, fighting machine. He spoke with particular enthusiasm about South Korea.
Another fund manager presented us with a South Korean tech company, which is about to exploit a coming opportunity in storage, cloud computing and hard drives. The chart had gone nowhere for seven or eight years and, as a technician, what I saw was the mother of all bases.
We were also lucky enough to hear from a political strategist over from the US who gave us some great insights into behind the scenes stuff in Washington. His main argument was that tensions between Washington and North Korea were mostly a red herring. Nothing too untoward is going to happen between the two.
Again, the takeaway from his talk was another positive for the Asian region. With a couple of glasses of wine inside him, he even hinted that it would not surprise him to see North Korea be part of South Korea within a few years.
The coming technological and monetary game of leapfrog
MoneyWeek
Half the table shook their heads in baffled incomprehension, while a sort of longing greed crept into the eyes of the other half. This is the Wild West. It's experimental. It's unregulated. Nobody quite knows what it is all for. But something huge is going on.
Another speaker (me) spoke about the impact of the smartphone. Something like half the world's population remains unbanked 3.5 billion people and thus excluded from ecommerce. Yet over six billion now have a mobile phone. By 2021, however, that mobile phone will be a smartphone.
A smartphone will be the way that many experience the internet for the first time. Suddenly the unbanked and unconnected are going to have instant, free access to almost unlimited information. How are they going to use all that new-found knowledge?
A world of new contacts will suddenly open up to them. And, perhaps most significantly, developing fintech will mean that they are no longer financially excluded. Be it mobile-phone money service M-Pesa, bitcoin, or simple banking apps, suddenly they will find themselves in a position they've never been in before: that of being able to trade, exchange and generally improve their lot.
The first world is going to find itself with 3.5 billion more people to buy products and services from; to sell products and services to; and to outsource jobs too. It all points to an enormous global economic boom. And one of the regions that is going to enjoy the biggest upside from all of this is Asia.
And rather as much of China skipped lines and went straight to wireless when it built its new telecoms infrastructure, might the same thing happen as smartphone telephony proliferates? The new world will bypass traditional money and banking and go straight to crypto.
It's an exciting thought, even if a little excessive.
In other, non-Asian areas, one FX trader warned that the rally we're seeing in the euro might be false, and that the dollar is getting set to soar. Another technician called for higher highs in the stockmarket over the summer, before a nasty sell-off in the autumn, by which time the structure would be complete and the time would be right for the bull market which began in 2009 to end.
I don't really know about that. I do know, however, that I went into the dinner with Asia a long way from my thoughts. I woke up this morning feeling extremely excited about the region. Now I've got to go and do some reading.
