Small is beautiful is a myth. Small is Dying is the reality.
The Index S&P crossed the 1700 points in the beginning of August for the first time ever. The Dow Jones which comprises the oldest Blue chips of America (Apple is not yet in the DOW) crossed 15,600 points for the first time ever on the first of August. Who else is at the all time high? The Dax Index from Germany.Since these are the main indexes that are at the all time highs (Mexico is also doing ok but not at all time high) one could ask who are the main beneficiaries from Globalization/Regulation/Complication that we are experiencing in the last 20 years.
I guess we could say the main beneficiaries are the biggest companies. The Bigger get bigger is the strongest trend of the last 20 years.
The Small is beautifull is a myth. Small is dying is the reality.
To benefit from Globalization a company must be huge, because to do business all over the world companies need to pay regulators, local autorities, to pay huge fines (JPMorgan, Barclays, BPetroleum, etc….), to have an army of lawers, auditors and complience officers, to be able to be sued and clients believe that they will survive. To be big is a great position to be.
On top of all this to have a Global brand and to be able to advertise worldwilde is a huge advantage. The Internet is also a trend that is benefing the american companies, like facebook, Gooogle, Amazon, Booking.com, etc….
If this is true how can we benefit from this trend?
1.We don't need to buy emerging market funds to benefit from what is happening in EM. The Global players can capture part of what is happening there.
2.Buy the Leader's of each market segment.
3.Buy Global sell local
4.Buy big & sell middle & small players
5.Buy brands & sell commodities.
We live in a world with excess supply in almost everything and the only players that have a bit of pricing power are the leaders, the brands and the nº1 in each industry. The Globalization is benefiting the L'Oreal, the BMW, the IBM, The Boeing Company, etc….
Globalization is a death sentence for the local player.
Share story
0 comentários: