Investor Agenda

On Assignment: Europe & Asia

In the past week, I have met with executives and investors from all over the world including London and Singapore. I am currently reporting on the ground from the Asia region, after spending last week in Europe. I am also hosting the CNBC Asia Business Leadership Awardsshow this Thursday, which will be broadcast live around the world. You’ll get a glimpse of what drives innovation, growth and successful management from the top execs in Asia.

I recently met with several high-level managers of sovereign wealth funds and key among their worries: the Fed’s exit strategy and protectionism. On the issue of protectionism, there are concerns of a clamp down on immigration and imports because of the propensity to look inward as jobs move offshore. And the exit strategy by Treasury and Fed officials has many questioning: What happens to the economy when the stimulus goes away? Inflation and in some cases deflation as record low interest rates compete with stubborn slowdowns in some nations, the dollar as the debt of the us acts as a stranglehold on the currency.

As one major sovereign wealth fund manager put it – don't forget what the great Winston Churchill said – at the end of the day, you can always count on Americans to do the right thing - after they've tried everything else. He expects the next few years to be tough on the United States, however, he still has 45 percent of his assets in the U.S. because he is looking out 20-25 years from now and believes America will be fine.

Investment ideas remain focused on leadership – the quality names in growth areas, such as financial services, technology and metals.

He also said he expects at some point down the line, again maybe in 20 years, the dollar may not be the only game in town - but for now it is. He said the currencies that come close the US dollar are the Euro and the Canadian Dollar. He also fully expects the Chinese Renminbi to appreciate over the long-term.

Hewlett Packard once again pointed to Asia for its growth story, as did many retail investors. That is where the money is but remember you don't have to invest strictly in China to benefit from the growth story of China. You can buy companies and invest in the countries that benefit from the growth coming out of the region; countries like Brazil and sectors like mining and resources as well as infrastructure plays. China’s growth story has many implications – the steel story is one to watch. Although steel is an important component to the growth story, some of the steel companies have expanded too fast too far so the valuations may have gone up too much.

More from my Europe-Asia trip later.



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