Long-term Lock-up Investments
My neighbor in Chiangmai, the well-known investment adviser Marc Faber, recently asked a panel in Moscow: “If tomorrow you were supposed to go to jail for ten years and were allowed to make only one investment, which you would not be able to touch for this period, what would you choose?”
High-profile American commentator Nouriel Roubini opted for a basket of stocks of Western multinationals geared to benefit from emerging markets. Nassim Taleb (he of “black swan” fame) suggested land in his native Lebanon, a country he said where every political party respects property rights. Scott Minerd of Guggenheim Partners chose works of art. Maria Gordon of the giant fund manager PIMCO preferred some large, high-return emerging-market stocks. Russel Napier, the well-known CLSA strategist, went for a basket of Asian currencies. Another UK figure, Hugh Hendry of Eclectica Asset Management, opted for tobacco stocks. Faber himself stuck with his favourite investment – gold.
My choice for a ten-year lock-up? Gold is tempting, but my choice would be Industrial & Commercial Bank of China , which is accessible to international investors through a listing in Hong Kong (the ticker is 1398).
It’s the world’s biggest bank by market capitalization, and is still largely owned by the Chinese government – so there’s no default risk. It currently offers a dividend yield of around 3.4 per cent, nearly three times covered, in the Chinese currency, which seems destined to be one of the strongest over the next ten years.
Unlike just about any of the world’s other major banks, it has had a strong and consistent record of earnings growth.
CopyRight – OnTarget February 2011 by Martin Spring