Economic growth 20 years out

[reader]

Fidelity Investments, one of the US's leading brokerage houses that specializes in retirement planning, has published an interesting chart of growth projections for some developed and developing economies. Surprisingly, three southeast Asian nations rank just behind India that tops the list.

[Latbear4blk]

It looks like it should not be so surprising. Those three countries will grow less than they did in the last 20 years. 

I think it is more interesting to see how projections for Spain, South Korea, Australia, Turkey, and China have plummeted compared to the last two decades and how Mexico and South Africa are expected to grow much more than they did in the previous 20 years.

Oh. For a minute, I forgot most friends here live in SE Asia.

[PeterRS]

How can any company, whatever its previous track record, make predictions 20 years ahead? It's all pure fanciful guesswork! In 1983 with Thailand's economy taking off, I guess the country would have been pretty high on a 20 year forecast list. Would Fidelity have factored in the 1997 Asian Economic Recession which left Thailand struggling to rebuild its economy in 2003? Of course not.

When Japan was starting its boom years in 1980, would it have predicted the decade of disastrous recession and deflation of the 1990s which left the country in a desperate economic state in 2000? I'll bet not.

When the USA was enjoying good years under Reagan in 1988 after 6 years of continuous economic expansion, would it have forecast the 2008 recession which hit the USA very hard? Again, I'll bet not.

Savvy investors, of which I am definitely not one, like Warren Buffet certainly look for long-term trends but equally adapt as he feels necessary. Take the Chinese electric car maker BYD. In 2008 Buffet purchased 20% of the company's shares on the Hong Kong stock market for US$235 million and a seat of the Board. He made the investment largely because of the company's battery technology. Had he kept that full stake, it would be worth about US$7 billion today. But because he did not want to compete with Elon Musk, this year he reduced his stake to just under 10%. But his profit is still huge! Just one company, one investor and not 20 years, but getting closer.

[reader]

According to Wikipedia, Fidelity has $10.4 trillion under administration. You don't acquire that investor confidence being wrong very often.

I'm a long-time Berkshire Hathaway enthusiast. Buffett's annual reports are one of the most anticipated events in the industry because he eschews incomprehensible an mind-numbing boilerplate language and tells his investors just what happened to their holdings in plain talk. There's nothing he recommends more than taking the long-term view (20-plus years). When his class A share first opened 43 years ago, they did so at under under $300. Yesterday they closed at over $551,000.

Btw, the largest chunk of his portfolio today is in Apple. But when you have a Dairy Queen blizzard, or pull on your Fruit of the Looms, you're partaking in a company fully owned by Berkshire.  And he still has about $147 billion cash on hand, looking for value investment opportunities.

Let's hope we're around in 20 years to find out who was right. 🙂

[vinapu]

1 hour ago, reader said:

 

Let's hope we're around in 20 years to find out who was right. 🙂

even if we are , and in good form,  we will not remember that growth projection , which , when one looks at it with cold eye looks quite sensible