Growing Rich - Arabictrader.com

GROWING RICH WITH GROWTH STOCKS
Las Vegas. The world markets are getting more and more coupled
each day. The reality is if our market heads down, the whole world
follows us. We’re the leader. When America gets a cold, everybody
else gets pneumonia. Look at what happened during the 1998 global
stock market correction. Excluding the small underdeveloped countries,
there was a high correlation between the U.S. and foreign markets.
In my mind, it makes less sense than ever to lose SEC protection and
buy overseas stocks. I truly cannot understand the wisdom of taking
your money into uncertain parts of the world.” By investing in multinationals,
you also enjoy some degree of protection in the event the
domestic economy fares worse than some of our trading partners.
Papp points to the Asian debacle of 1997, which drove stocks in
some overseas markets down more than 30 percent in just a few
weeks. During this same period, the Dow Jones Industrial Average
fell by only 10 percent. Despite the recent turmoil, Papp remains exceedingly
optimistic about Asia’s future. “In the year 2000, this world
will have three great economic powers, and the United States will be
the only one outside of Asia,” he predicts. “Japan already has a stock
market equal to almost twice the value of, not the largest European
country, but all of Europe combined. Migration in the United States
and Canada to the west is likely to accelerate as the world increasingly
discovers Asia and the United States discovers the West Coast.”
Still, Papp emphasizes you’re better off tapping into this potential
with American multinationals. Yet another reason Papp prefers to
stay at home with his investments is because there’s no reason for
him to leave. “Fortune magazine does a study every August on the
500 largest companies in the world,” he points out. “In 1997, 24 of
the biggest were U.S. companies, yet they accounted for half of the
earnings of the top 100 companies. In other words, 24 percent of the
companies made 50 percent of the earnings, and they’re all American.
Thus, American companies earn three times as much as their foreign
competitors. They are also much better run and more efficient. We
have so many advantages in the United States, it’s unbelievable. Why
would I want to leave the best, strongest growth stocks in the universe
to go buy a bunch of junk around the world and take all those risks?
I feel you should buy the best companies in the world rather than
second-rate companies just because they are foreign. The origin of a
multinational company is less important than its quality and ability
to grow.”
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