FEEDFrequent readers of this site know that I am essentially a theme investor. The industrialization of emerging markets is one of my current themes. Each week I track the performance of two portfolios BRIC and Big Build Out (BBO) based on this theme. Both portfolios returned over 40% last year.
BRIC is simply an equal weighted basket of Exchange Traded Funds (ETFs) representing Brazil, Russia, India and China. BBO is a basket of world-wide producers of raw materials like iron ore, copper and nickel necessary for industrialization. Stocks include BHP Billiton, Rio Tinto and Southern Copper. The portfolio also includes their suppliers such as Caterpillar. Refer to Building Wealth One BRIC at a Time for the complete list of stocks.
I have been considering adding a couple of transportation stocks into the mix. Supplies have to get there some kind of way. Initially I was thinking of shipping or air freight companies. However, after reading headlines such as “China will invest 1.5 trillion (US$190 billion) to increase the nation’s rail network to over 90,000 kilometres by 2010″ from the China Daily. Or quotes such as the following from the China Railway Development Report,
Because of system limitation, China’s railway industry still lags behind in investing-financing areas. This results in railway construction unable to meet the demand of economy development.
There is high demand in our railway transportation industry, and sometimes the demand exceeds supply. It is estimated that the supply capacity will increase a lot in future and relieve transportation pressure effectively.
This has me thinking railways.
Apparently, road and railway contractor China Railways Construction Corp has announced plans for an initial public offering (IPO) in early 2008. Others will surely follow. Instead of investing directly in a Chinese company, I am more interested in world-wide companies listed on the US Stock Exchanges that are positioned to assist or joint venture with companies like China Railways.
I am just starting my search for such companies. If anyone knows of any - please share by leaving comment.
Wow, China Railroads! that will be a very good investment. I do not know any companies. But I cannot wait to invest in some.
Good info miked!