Globe’s largest asset management firm, Black Rock, finding Emerging Markets micro opportunities in a macro obsessed world

English: BlackRock Group Licensing: Category:I...

English: BlackRock Group Licensing: Category:Images of Manhattan (Photo credit: Wikipedia)

The world’s largest asset management firm, Black Rock, head of emerging markets Jeffrey Shen says he is “finding micro opportunities in a macro obsessed world.” BlackRock, Inc. is a U.S. based multinational investment management corporation based in New York City. As the world’s largest asset manager,[4] BlackRock is a leading provider of investment, advisory and risk management solutions. The company acquired Barclays Global Investors in December 2009, solidifying its position as the largest investment manager in the world. As of September 30, 2012, BlackRock had $3.67 trillion in assets under management.[5] Founded in 1988, initially as a risk management and fixed income institutional asset manager, BlackRock has evolved into the world’s most respected and prudent fiduciary. According to Ralph Schlosstein, CEO of Evercore Partners, a New York-based investment bank: “BlackRock today is one of, if not the, most influential financial institutions in the world”.[6]

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There are basically two ways an investor can research into which stocks to buy. One is looking at the macro picture (macro economy) and zooming into a particular industry and stock. The other is looking at the stocks itself and then panning out to the industry and the economy as a whole.The former is called macro-investing and the latter is called micro-investing.

An example of macro investing would be this. With the advent of the IRs, I believe that tourism and the industries related to it is set to do well. So, I look at the industries and stocks related to this. Hotel occupancy rate will boom and especially the hotels situated near the IRs will do better. Then, I look at which are the hotels near the IRs and if they are listed, I may choose to invest in them. Another industry that is set to do well with the influx of tourists and the mega-rich will be the property market. After determining a particular company that is set to grow, the investor can look into the financials and decide whether to invest in it. This is also called the top-down approach.

On the other hand, micro investing involves looking at a particular company first. Let’s use the company SIAEC for this example. I look into SIAEC and if I like the financials, I decide whether there is growth for the company in the macro perspective.  Air travel is picking up and people have started to have confidence in the economy. Thus, SIAEC might be a good company to go into. Another name for this type of analysis is the bottom-up approach.

There’s no right or wrong way, just individual preferences. As for me, I use both the top-down and bottom-up approaches. I used to use the bottom-up approach more. I look at the company’s financials first and determine if there is growth for the company with the economy as a whole. Now, I have incorporated the top-down approach to my investing arsenal as well. I use this approach when looking at which industries and companies are set to do well for the future. These companies should be able to ride the Singapore growth story well. This habit was cultivated after talking to and learning from my uncle, who is more of a top-down investor.


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