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The US Was An Emerging Market In This 209-Year-Old Chart

WILL ORTELINSIDE INVESTING
FEB. 7, 2014, 6:42 PM 2,728 4

It’s easy to forget that business and commerce have been around for a long time, in fact almost as long as civilization itself.

William Playfair—who among other things, invented the bar chart—published a book in 1805 which investigated the causes of decline and fall of wealthy nations.

The chart below was in the very front of the book. It’s particularly provocative when read alongside modern attempts to look at the way that the economic productivity of countries changes over time, like this excellent Yearbook of Investment Returns from Credit Suisse.

Both excellent works serve as reminders that investors are well served by periodically remembering how dramatically things can change over time. In the graph below, the United States of America is newly ascendant in the international scene: a true emerging market. Russia, England, France, and Germany are the world’s economic powerhouses. China and India are not mentioned.

image001-13The US Was An Emerging Market In This 209-Year-Old Chart

It’s amazing what can change in a few hundred years, or even in a few decades.

To choose an example of a drastic change closer to living memory, did you know there was a time when serious businesspeople doubted that a South Korean company could produce a microwave? In “The Silent War“, a 1990 book about the future of competition in business, the author details what Samsung had to overcome in order to compete.

A glance at their market share in products that require highly advanced manufacturing processes, like hard drives and flash memory, makes it almost funny that there exists in living memory a time when serious businesspeople were skeptical they could pull something like that off. In the 45 years since Samsung’s founding, the competitive landscape in business has altered so much it is barely recognizable.

The investment ramification of this walk through history is straightforward: what’s changing under your feet? Hit play on the chart below, and watch as the circles (which correspond to a local GDP Growth rate in a given year) and consider how you’d go about making sense of this seemingly random flickering of expansion and contraction.

If you had to try and fit it into a chart as simple as Playfair’s, could you? What would you emphasize?

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About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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