Passport to Profits : Why the Next Investment Windfalls Will Be Found Abroad - and How to Grab Your Share

Rating:
Summary: A window into the mind of a unique personality...
Review: I don't know how many people there are on earth with Mark Mobius's lifestyle, but there can't be many who both have his background and are also willing to share his insights like he does in this book. With no traditional family life to speak of, Mobius presents a picture of himself continually jetting from continent to continent, with no place to lay his head but the cot on his private jet or whatever business hotel he happens to be staying in.

Let me mention a couple of things that this book is not. It is not a guide to every emerging market in existence describing the pros and cons of each. Mobius selects several countries as examples (Brazil, Thailand, Russia, Estonia, South Africa, Nigeria) and then drills down to specific companies for flavor. This book is also not an economic theory-type text, where the author might present empirical reasons why emerging markets can make good investments by marshalling statistics. Obviously, if Mobius did not believe that emerging markets can make good investments, he would not have spent his career in this area, but a lot of the theoretical aspects of emerging markets remain unspoken.

The format of the book feels something like an all-day seminar by Mobius on the promises and pitfalls of his kind of investing, sprinkled with quirky humor here and there, along the lines of "denial is not just a river in Egypt..." (har, har har). It is as if you have been given the role of a junior analyst to tag along with him to company meetings all over the world, with him giving you his "lessons learned" in the rides back to the airport.

In terms of specific investment ideas, Mobius appears to love low (normalized) PEs, especially in the 4x to 7x range, particularly when competitors sell at multiples from 11x to over 20x. He also likes companies selling at a discount to book value. Then there is all of the "softer" stuff, such as quality of management, which is of paramount importance. In particular, his comments in this area spur me to greater due diligence in straining to learn more about the backgrounds of company managements in faraway places. If I can't learn anything positive about them, it might be better to stay away.

Particularly due to his long tenure in Hong Kong, I was surprised that Mobius did not spill more ink in his book focusing on China. One takeaway I have from his review of the world is how under whelmed he is by the idea of investing in China. His outlook is completely global, and any potential investment in China must be weighted and sifted against anywhere else. China might have a great future, but at what multiple to earnings?

If you want some musings and anecdotes from a person with a real track record in international investing (as opposed to an ivory-tower viewpoint on how things ought to be) this book is for you.

Rating:
Summary: More chitchat than substance
Review: I respect Dr. Mobius who has a tremendous reputation as a pioneering global fund manager working for Templeton Group of mutual funds. However I found the book a little superficial and at some places wacky. Also while there is no doubt about his economic acumen, I found his political thinking questionable.

To start with the fact that he really likes Estonia. In fact he dedicated to this small Baltic country as much space as to Russia or Brazil (while zero to such important market as Poland and zilch to Ukraine). His idea was that investing to Estonia is like investing to Russia (because Estonian main trade partner is Russia) but without Russian risks.

I have nothing against Estonia per se and I even agree with his concept of "gateway" country. He brings an example of such successful "gateway" country - the Netherlands. But while the sizes of Netherlands and Estonia are similar, the population numbers are not. The Netherlands has 15 million people, while Estonia only 1.5 million. 1.5 million is also one-sixth of population of Russian capital city of Moscow.

Also many Estonians of Russian ethnic origin (a substantial minority) are unhappy since Estonian government made their lives difficult by enacting a discriminating legislation, leaving them to face a choice to either leave the country or go through the painful process of naturalization. It doesn't make Estonia automatically a "cleft country" but the potential is there. This potential danger should "boost" Estonian country risk as high as Russian country risk (but to my view without the advantage of Russian "economy of scale").

Another his passage, which to my opinion is simply strange, is where he talks about the Baltic enclave of Kaliningrad. He writes, "until World War II it was part of Prussia, and now the Russians refuse to give it up" (page 60). Mark Mobius (who is German citizen) should be more careful in saying things like that, because it's silly and not true. He should be aware that Germany has renounced her claim to the former province of East Prussia (60% of which now is in Poland and 40% is in Russia).

I think if one day the present European border system is challenged, that very day Mr. Mobius could say good-buy to all his Templeton investment holdings in Europe. For sure it would be naive to expect a fund manager to be familiar with European geopolitics, but an international investor as prominent as he shouldn't repeat these kinds of beer cellar-type fallacies.

Dr. Mobius is much more convincing when he writes about Hong Kong and Thailand. He used to be a resident of Hong Kong for many years. I was impressed by the author's grasp of Asian economies and cultural context. To my humble opinion Dr. Mobius should have limited himself to this region, which he obviously understands well. His coverage of Eastern Europe and Latin America I didn't find convincing and I didn't buy his notion of South Africa as an emerging market.

All in all it is not a heavyweight book, although it's not totally devoid of refreshing ideas. I've enjoyed his shots at Gorge Soros. I've learned about Dr. Mobius more than I learned about investing in emerging markets. For one thing there is no doubt about his political sympathies - he let it slip a number of times. On one page he criticizes "labor unions and leftist lawyers" with theirs "typical obstructionist tactics". A redeeming feature is the fact the author doesn't seem to take himself too seriously - in fact I think he has a good sense of humor. Buy it if you'd like to read about common sense investing rather than sophisticated investment strategies and have time for a light, but engaging summer read.

Rating:
Summary: Insightful!
Review: Mark Mobius wrote this emerging markets investment bible for major players in the financial industry. Fortunately, he used language that a novice investor can understand. While some of his more than 80 "Mobius rules" for investing may seem simplistic and clichéd, Mobius backs up his snappy, one-sentence rules with coherent instructions. The book has a friendly, conversational tone. His adventures visiting less-developed countries where he wants to invest are richly detailed. They offer a real glimpse into how business is conducted in markets such as Russia, Brazil, and Hong Kong. While the book's focus is toward investors with the means to travel, it shows how even small investors can capitalize on emerging markets. We [...] recommend this book to anyone in the stock market - particularly those who want to invest in emerging markets, but have no idea where to begin.


Rating:
Summary: Earning your information
Review: Mark Mobius' Passport to Profit is a good read, it gives us a remarkably frank opinion and views on the emerging (stock) markets in the world, rarely seen clearly as it is. Mark also gave us a glimpse of different way of thinking of the Chinese / Asians, in his snippets of autobiography about his struggles in Hongkong business. And his reviews of other markets are interesting, and .. lightweight. It is like a tourist guide for the investment-minded.

While it is good as it stands, I do not really see that his writing could be a passport to profits, it is more like as an entree to a new dish, EmergingLand flavored. For the maincourse, you still have to go somewhere else. Since finding a comprehensive investing book on EmergingLand is still rare now, this book is a good start to whet the appetite of many. With the burst of bubble in Nasdaq and Dow (April 2000), we might see that bubbles are common phenomenon, and therefore another look at EmergingLand may be due. If you think so, this book is a good start.

Rating:
Summary: Let Mark Mobius tell you himself.
Review: Really some good stuff here. Investing has long periods of boredom punctuated by brief periods of shear terror. The purpose a book like this fills for investors is that it enables us to sit tight and hold on for the ride. Mark gives us incite into what the navigator is actually doing. Long term planning pays.

You can hear an excerpt and an interview with Mark Mobius right now by searching on Author "Mobius" at his publishers web site

If you are not familiar with books on tape, having your books read by the author is the preferred way to go. These are absolutely the greatest when you are driving and your eyes are in constant motion, the world around you is dynamically flowing. Your mind is free to feast & absorb. It is so easy to leave Mark in your machine on auto repeat.

Hardcover is companion to Global Bargain Hunting by Burton Gordon Malkiel